In the frame: the boss who went through a dot-com disaster and lived to do the deal

Martin Read's office is full of photographs celebrating a successful career. But after the creation of LogicaCMG, says Clayton Hirst, the picture could be even brighter
Click to follow

Doctor Martin Read slumps into his leather sofa and glances around the room. The chief executive of LogicaCMG begins each sentence with "Ahh, yes that was when ..." as he gives a verbal tour of an office that forms a stylish counterpoint to the IT services firm's unglamorous location by the Euston underpass in London. Every available inch of wall space is decorated with a framed picture - and it's not just an obligatory family photo or the children's school paintings. Each picture has a story attached to it, be they of old company luminaries or Read's own past.

To his left is a collection of specially commissioned cartoons presented to him when he left his old firm, GEC, where he worked for the legendary Lord Wein-stock. The cartoons are all in-jokes, and take some explaining, but they are beautifully penned.

Below them is a photograph of Read with two LogicaCMG colleagues sporting 10-gallon cowboy hats, taken when the company expanded its US office. And next to his desk is a mock-up of a Hello! front cover, with Read's face beaming out from under the headline "An Amazing Success Story". This was presented to him by the former Asda boss Allan Leighton when he retired as a non-executive director of the supermarket chain.

Read is a rarity in corporate Britain: not only has he survived the technology boom and bust, but he has been a chief executive at the same company for 10 years - more than twice the average "life expectancy" of a boss. The 53-year-old says he's not planning to stay on for another 10 years - "I'm certainly thinking of retiring before I get to 60" - but he insists: "I'm not thinking of retiring for a little while yet. LogicaCMG is in a very exciting phase."

Read has almost completed the integration of two of the country's largest IT firms - Logica and its Anglo-Dutch rival CMG - following a deal agreed almost a year ago. This has created a company that employs 21,000 people and is valued by the stock market at £1.8bn.

"The bulk of the merger is done. We have done most of the really painful stuff, which is about people," says Read, who made around 3,000 staff redundant. "When we were planning this, I went to talk to quite a lot of people who had done big mergers - John McGrath, for example, who was the chief executive of Diageo when Guinness and Grand Met merged. There was really consistent advice. They said: 'Look, it's bound to be traumatic, people are expecting change, so make it clear as soon as possible who the winners and losers are going to be. Deal with the losers as soon as possible.' That is what we set out to do."

Read himself emerged a winner, becoming boss of the enlarged group at the expense of CMG chief Alistair Crawford, who departed after 14 years at the helm.

At the time, critics said the merger would fail. Logica and CMG were too diverse culturally and the deal was little more than two troubled firms huddling together to keep warm, they warned. "The merger is being entered into for the wrong reasons. Bringing together two struggling companies will only result in one larger struggling company with a huge integration headache," said an analyst at investment bank Dresdner Kleinwort Wasserstein at the time of the deal. Last month, the same analyst recommended to his clients that they bought LogicaCMG shares.

Part of the reason for the City's change of heart is that Read has managed to eke out £85m of cost savings from the merger, £15m more than was originally estimated. The results from the enlarged LogicaCMG have also beaten City expectations, as the company has been better placed to compete against US giants like IBM and EDS for big IT contracts.

But Read isn't talking up the market - something for which he was criticised during the boom years of the late 1990s when Logica entered the FTSE 100 and at its peak had a market capitalisation of £8bn. "Looking back over the last six months, the share price has started to do that." Read raises his hand.

"I think people have started to get it in their heads that the recession is over. I am not sure I quite subscribe to that - I think it is a bit early to tell. In the space of six weeks, the forecasters have got a lot more positive about life. I really hope they are right, but I couldn't really sit here and say to you I can see all sorts of signs that the world is going to do that." Up goes his hand again.

"There are definitely signs of some pick-up in telecommunications. But it's not going to suddenly do that." He gesticulates upwards again.

"Energy and utilities are pretty flat. Banking - again, it's been really difficult. There have been some signs of improvement, but all pretty muted, but then ..."

Read has a habit of interrupting himself mid-flow. His brain often thinks of new ideas before his mouth has finished a sentence, sometimes leading to huge conversational tangents. A question about what he thinks of the recent government review of corporate governance ("the worry I have is that we are increasingly getting into a box-ticking mentality") suddenly leads to a conversation about Britain's railways ("it's far, far, far, far, far safer to travel by rail than it is to drive round the bloody M25").

But when asked if he can recall his biggest mistake at the helm of Logica-CMG, there is a long, uncharacteristic, pause. Eventually he comes out with the classic job interview response, turning a negative into a positive: "I think nobody really realised how big the fallout in telecoms was going to be. Now, was that such a big mistake? It probably wasn't, really, because I am not sure we would have done things much differently. That was a very hard period when the telco market collapsed. For us, the cutback was quite sudden."

Associates of Read say he's a naturally upbeat person. Asked what drives him to get out of bed in the morning and travel from his home in Winchester to London after 10 years in the same job, he says: "Because it has been so exciting and fulfilling." From anyone else this would be a cliché, but Read probably means it.

Now the Logica-CMG merger is largely done, what's going to keep this chief executive jumping out of bed? Where does the company go from here?

Read says his aim is to make it a top 10 IT services group worldwide; currently, it is ranked number 36 by turnover. To get there, Read says that LogicaCMG must expand in America.

"If you look at LogicaCMG globally, then we have got about 650 people in the US out of 21,000. Well, probably for the sort of company I am talking about, at least 15 per cent of our headcount should be in the US. So you can see that we need to be a much more substantial player in the US."

To achieve this, Read says that Logica- CMG will consider buying American companies. "It all depends on size and opportunity. But I am sure that bolt-on acquisitions are very much a part of that. We don't have a balance sheet issue, let's put it like that." He also hints that if the right opportunity came along, Logica-CMG might strike early next year.

Which will present a problem for Read. With every inch of space already taken up on his office walls, where will his next framed photo go?

Comments