The Lowdown: The unsinkable John Harvey-Jones

He's defied German U-boats and Margaret Thatcher in his time, and at 79 not out his corporate critiques are still hitting their targets. John Lawless finds him blasting fat cats and accountants
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The Independent Online

There is only one company that Sir John Harvey-Jones, British television's first-ever Troubleshooter, refuses to dissect: ICI, for which he produced Britain's first-ever billion-pound annual profit.

ICI reveals its half-year results next Thursday, hopefully showing a recovery in its recent fortunes. But Sir John won't be at the company's central London headquarters to analyse the performance of the men who succeeded him. When asked to comment on how they've done, since he departed after 31 years at ICI in 1987, he simply says: "No, I won't."

This from the man who was so outspoken in the boom years of the 1980s, he earned himself the title of Margaret Thatcher's least-favourite businessman. And who, as BBC2's corporate doctor, made pronouncements about those bosses who dared to let him through their factory gates that scared the hell out of their puffed-up PRs but made absolute sense to millions of viewers who had never been near a boardroom.

But the small- to medium-sized businesses he once very publicly took apart keep on coming back for more. Three years after his 10-year TV stint ended, his no-nonsense advice remains a sought-after commodity. "I still get about four letters a day from companies asking for help," he says. Last month's batch included one addressed simply to "Sir John Harvey-Jones, Wales". As many as possible are answered, for free. Large corporations, too, still invite him to talk to them about their management mistakes.

Sir John has always pulled 'em in. On 3 March 1987, the day he quit the chair of what was then Britain's biggest industrial company, he flew to New York for a dinner with several hundred fund managers. They loved his salty talk almost as much as the profits he brought them. They rose to their feet, draped him with an outrageously wide kipper tie, his trademark neckwear, and cheered him.

A decade and a half later, aged 79 and despite having suffered two strokes, he still isn't pussy-footing around. Take his views on the subject of fat cat executive pay. "It's obscene," he declares. "And unnecessary. I don't believe it makes people work harder." Sir John knows exactly the impact £20m-plus severance deals have had on millions of small investors and on workers. "They irritate the hell out of the troops," he says.

But who in their right mind, and with a watertight contract, would dream of refusing a golden handshake, no matter how badly the company had performed? Let alone give up an annual pay rise.

Well, under Sir John at ICI, that was what happened. Twice. "In my first two years, the salaries committee thought we should have a modest increase," he recalls. "The workforce had already had one. I and the other directors said, for two years, that we would not take it. The company was not performing. I said if we didn't do better next time around, I wouldn't wait to be pushed. I'd resign."

Luckily, the following year's profits exceeded a billion pounds, an unbelievable turnaround. And one that surely guaranteed him the sort of financial farewell others have since enjoyed? Not so. Sir John retired on just £150,000 a year. "I got three-quarters of my final salary," he says. "I thought it was generous."

Who better, then, to run his eye over today's corporate culture - for example, Enron-style accounting to boost share prices. "Unbelievable," declares Sir John. "Not only do you attempt to deceive your shareholders, you deceive yourself as well. If you can't do anything about things in a company when they're going well, you sure as hell can't when they ain't."

But pinning down the faults of accountants and auditors has become the devil's own work, he adds. "Accountants go to the far end of a fart to make the accounting system measurable. They go to extreme lengths on what is easily measurable, but make no efforts on things that are absolutely crucial to the future of the company - for example, valuing the opinion your customers have of you.

"Why not?" he continues. "Because, accountants would say, there is no easy way of doing it. But if I had to rate a business one to five - good, bad or bloody awful - I could do it. Accountants never measure the downside. They go to immense trouble to measure what you could earn, but they never make one-hundredth of the effort to measure what happens if things go horribly wrong. The accountant really has to give a full and fair view of every position. Otherwise, he's failing in his duty."

Sir John has been there, done that. Past non-executive directorships have included The Economist magazine and the food and drinks giant Grand Metropolitan (now Diageo). "When I was a non-exec, on two occasions I played a major role in getting rid of the chairman. Nobody knew, publicly, and they still don't."

Under Sir John, did management at ICI actually discuss things like honesty and integrity? "It had extremely strong values," he says. "When I was on the purchasing side, I knew that, if I drove such a hard bargain that I drove a supplier out of business, that was a sacking offence. The job of the buyer was as much to preserve competition, for if you ran one person out of business, then another, you'd end up with a monopoly supplier.

"ICI was a decent company," he maintains. "It believed in doing the right thing, in telling the truth. That may be what many people now believe to be boring. But it's still essential for survival."

Sir John has long argued that the standards by which the City judges companies are often "absolutely barmy". "Movement in your stock is not caused by your effectiveness or non-effectiveness," he says. "I used to drive myself mad explaining to my troops how, even when a company performs well, its shares went down. That it has to do with sentiment, politics. Even the fashionability of your sector, or not, far exceeds any efforts you make to run the company. The irony, of course, is that if the whole market goes down, you might go up. It's a fact: running a company and pleasing the Stock Exchange are two different things."

Even as he approaches 80, Sir John can't stop working. Vice-presidencies range from Monmouth Town FC, the Book Trust and the Royal Society of Arts to the Wildfowl and Wetlands Trust and the Great Ormond Street Redevelopment Fund. He's chaired everything from the Police Foundation to the Policy Studies Institute, has been Pipesmoker of the Year in 1991 and an honorary friend of Greyhound Rescue. And in 1985 the West German government awarded him the Commander's Cross of the Order of Merit of the Federal Republic, having forgiven him for his post-war role in supervising the dismantling of one of its shipyards, to go to Russia as war reparation.

Forty-seven years ago this month, Sir John left the Royal Navy - having seen action in the Second World War, surviving the sinking of two destroyers in the Mediterranean and then serving on submarines - and joined ICI. His daughter had contracted polio, then a much-feared disease, and he suddenly found himself needing a nine-to-five job.

Things got off to a shaky start. "I was earning £1,400 a year in the Navy," he recalls. "My wife and I discussed it. I asked for £800. And they snapped my arm off."

He felt in no position to argue. "I was not a university graduate," says the man who now has 12 honorary degrees. "I was not a chemist or an engineer. I did not have any attribute that would make them want me."

Except that he was, unwittingly, applying for the least desirable job in the company, as works study manager, regarded as a spy by the unions and as a means of blackmail by management. He probably could have got a rise on his naval pay. Instead, he says, "in every single position I then worked in over 31 years, I was the lowest-paid person. Even when I became chairman, I never caught up."

The Troubleshooter was never a fat cat.

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