The chief executive with a taste for the unpredictable

Banks have fallen from favour, and building societies are being gobbled up by predators. But no one wants Bradford & Bingley, the unloved minnow. So its boss must ignore stock market nerves and float.

Your mission, Chris, if you choose to accept it, is to bring to the stock market a company in one of the City's least-loved sectors at a time of crippling competition. The company is too small to ever have a hope of making it into the FTSE 100 index, despite the fact that virtually all of its competitors are. You should also know that every potential trade buyer has had a long, hard look over the business and decided they are not interested. It has to be done before December even though the markets are very nervous and a stock-market crash cannot be ruled out. Good luck. This tape will self-destruct in five minutes."

Your mission, Chris, if you choose to accept it, is to bring to the stock market a company in one of the City's least-loved sectors at a time of crippling competition. The company is too small to ever have a hope of making it into the FTSE 100 index, despite the fact that virtually all of its competitors are. You should also know that every potential trade buyer has had a long, hard look over the business and decided they are not interested. It has to be done before December even though the markets are very nervous and a stock-market crash cannot be ruled out. Good luck. This tape will self-destruct in five minutes."

Chris Rodrigues is no Tom Cruise. More overgrown schoolboy than clean-cut hunk. But the Bradford & Bingley chief executive possesses an unshakeable self-belief that makes him just perfect for the mission impossible he was given last year when the North Country building society's members defied their board and voted for a stock-market float.

In the City, where he has been touting the company around to brokers and fund managers ahead of the December listing, his fluent patter has gone down a storm. Having twigged that in this market, no one wants to buy shares in a small, uninspiring ex-building society, his response: buy John Charcol, the country's leading mortgage intermediary and flog the City the idea that what they were buying was a go-ahead, internet-savvy, financial-services intermediary instead.

Analysts can see the flaws in the argument but they are grateful for his efforts to give them what they need, a half- plausible story with which to shift an otherwise unsellable stock. "At least he is doing something different," comes the frequent refrain. It may actually work.

Critics are less convinced. "He is a madman. He is a complete nutter," said one Bradford & Bingley insider, who, not surprisingly, declined to be named.

Mr Rodrigues was an unlikely choice for the job. His predecessor, Geoff Lister, was a Bradford grammar-school boy who qualified as a chartered accountant with a local firm straight from school. He had been with the society for 30 years.

By contrast, the opera-loving Mr Rodrigues 's CV oozed brilliance and achievement. The son of two talented dancers from the Royal Ballet, he progressed effortlessly from the north-west London hot-house of University College School to Jesus Cambridge and then to Harvard Business School, where he sat at the feet of the legendary management guru, Michael Porter.

He was a contemporary of Archie Norman, the former Asda chairman, now the shadow environment spokesman, at McKinsey, the management consultancy whose alumni include Don Cruickshank, the London Stock Exchange chairman, and Sir Howard Davies, chairman of the Financial Services Authority, the City watchdog. He left McKinsey just before becoming a partner to join American Express.

Mr Norman, who later at Asda was to come across Mr Rodrigues again at West Yorkshire business functions, is a great fan: "He is a great guy, a big guy in every way, larger than life, tremendously enthusiastic. Everyone at McKinsey wanted to work for him. He is extremely bright, analytically sharp and tremendously energising. He is a surprising person to be running a northern building society rather than a big plc."

Mr Rodrigues is also keen on sport, but here again he leads from the front, not the armchair. He boasts of having rowed in the annual Oxford and Cambridge boat race, in 1970 and 1971. Cambridge won both times. He has kept the passion. Even today he has been known to take a scull out on the Thames at the weekend.

He is immensely proud, too, of his role as chairman for the past seven years of the prestigious Leander Rowing Club where he presided over the revival of its fortunes. He has rowed with the Olympic medallists Steve Redgrave and Matthew Pinsent and was in Sydney in September to cheer them on.

Inevitably, in the wake of his appointment, there was an element of culture shock on both sides. One Bradford & Bingley insider recalls the consternation when Mr Rodrigues took the top management off to the Henley Regatta for the day. Their usual stomping grounds were the directors' box at Bradford & Bingley Rugby Union Club or the local golf course.

Keen to please, he bought a flat in Ikley. But old-timers noted that his wife, Priscilla, and their two children stayed in London, and that he was rarely to be seen in Yorkshire over the weekends.

Mr Norman says: "Typical of Chris, trying to do the impossible."

Some, inevitably, resented the fact that they had been passed over for Mr Lister's job. Negative stories began to circulate about his departure from his previous job as chief executive of Thomas Cook, the travel agency, now owned by WestDeutsche Landesbank, the German bank.

Said one insider: "The story was that he was sacked for creating complete chaos. He was told to put all his things in a plastic bin liner. He was so shocked that he was sick down the toilet. After that he spent two years in the wilderness. We all wondered whether the board had really done all their [homework]. Certainly, it was common knowledge among the City head-hunting fraternity."

Mr Rodrigues' version of events is, not surprisingly, slightly different: "Yes, I was fired. What actually happened was my chairman said: 'We are extremely pleased with the performance. I have some good news and some bad news. The good news is that we have increased your bonus by 20 per cent. The bad news is that the chairman [Herr Neuber] wants a German running the business.' I said: 'I am not German. I can't do anything about that.' He said: 'I know, that is why you have to go.' There was no discussion about strategy."

After leaving Thomas Cook he did some consultancy work for RCI, an American time-share operator, before the call came about the Bradford & Bingley job.

Mr Rodrigues admits his management-school methods grated with some of the plain-speaking Yorkshiremen at Bradford & Bingley headquarters. He recalls how one senior employee once said to him that he believed in what Mr Rodrigues was doing but was leaving anyway. The trouble was that he had joined the company precisely because he liked the way it was and did not want to have to work in a company in the midst of upheaval. So he took redundancy and was off.

Mr Rodrigues' decision to call in Barbara Chilakos, an American psychologist whom he knew from Thomas Cook, also caused tongues to wag. To those who dismissed Mr Rodrigues as a bit of a fruitcake, the need for a psychologist on the payroll was entirely self-explanatory. Among her innovations was widespread, and some would say excessive, use of psychometric testing. She was also asked to help sort out the tensions existing between management and staff.

Colleagues say Ms Chilakos' involvement made matters worse rather than better. Eventually the resentment at her position had grown to such a pitch that the board was forced to intervene and insist Mr Rodrigues dispensed with her services.

John Wriglesworth, a well-respected City stockbroking analyst with UBS who had joined Bradford & Bingley to advise on strategy, was one of the first to depart.

John Smith, the former finance director, took early retirement following a bust-up at the start of the year. Neither would agree to be interviewed for this article.

Others who spoke to The Independent describe Bradford & Bingley under Mr Rodrigues' stewardship as being in permanent management upheaval. "It is not a happy ship," said one. Mr Smith is now working with Ken Murray, the Edinburgh financier, who failed last year to win control of the Leek United Building Society.

Mr Smith was replaced by Rosemary Thorne, the well-connected former finance director of Sainsbury's, the supermarkets group. Her previous employers include GrandMet, the spirits group and Harrods, the department store.

In total, five directors have joined the board since Mr Rodrigues took over, four of them since last year. Mr Rodrigues' critics say the high turnover proves thathe is impossible to work with. His supporters counter that such change is an inevitable feature of a company preparing for stock-market flotation. Driven people - and Mr Rodrigues is undoubtedly one - are also demanding and difficult to work with. "Senior jobs are about making tough decisions and some people are not going to like it," Mr Rodrigues said.

For someone who comes over as having such a big personality, he is amazingly reticent about himself and his family. "He hates the cult of personality," said one of his minders last week. Even his detractors are quick to defend Mr Rodrigues' integrity. "You won't find any corporate jets or housekeepers on the payroll." In the year to 31 December 1999, he made £650,000, nearly half of it performance-related.

His CV had aspiring plc chief executive written all over it. No one took it seriously when he said after joining the 148-year-old building society that he had no plans to float the business. His plans were aggressive: he bought Blackhorse estate agencies from Lloyds TSB, the high street bank, and then Mortgage Express, the specialist high street mortgage chain. When members voted last year for plc-dom, he was not exactly crying in his cups. So was his stance on mutuality genuine? "I did the job I joined to do," he said.

Since last year's vote to convert was technically an opinion poll of members rather than a legally binding resolution, the board could have stuck to the letter of the society rulebook, and ignored it. But Lindsay Mackinlay, the chairman, reluctantly accepted that there would have been such an uproar that the board had no choice but to accept the defeat, and embrace conversion. "Being indecisive was not in the interests of the society," he says.

Given its size, few in the industry rated its chances of making it to the stock market. Ian Harley, Abbey National chief executive, said at the time that he thought a trade sale was more likely. But the board which had already appointed Goldman Sachs, the investment bank, as its advisers, announced that the preferred route was flotation.

But despite the best efforts of Goldmans, and ABN-Amro, Bradford & Bingley's brokers, no one was willing to pay up for what they still regarded as a not very exciting mortgage business. As it is, some analysts are looking for a valuation of £1.3bn, less than half what some were talking about last year. That works out at less than £500 worth of shares each for the 2.7 million saving and borrowing members.

The speed with which Mr Rodrigues changed tack and threw himself into his new task of preparing the organisation to go public appeared to confirm sceptics' views about the instability of Mr Rodrigues' character. As one put it: "In real time he is one of the most impressive thinkers in the world. He is very good at thinking on his feet. At City presentations he will have them throwing away their crutches and singing hallelujah. The trouble is that there is no consistency. He has changed his mind on every major strategic issue at least once. He would make a great politician. But that is not how you run a business."

Critics accuse him of being deal-mad. As well as Charcol, he struck a joint venture deal this year with Alltel, an American mortgage processing company which now manufactures Bradford & Bingley's mortgages. They say he over-paid for John Charcol, pointing out that Bradford & Bingley paid £100m for a firm which had changed hands several years previously for £30m.

They also mock Mr Rodrigues for making the provision of independent financial advice the cornerstone of Bradford & Bingley's strategy when a few years back, they say, Mr Rodrigues wanted to ditch Bradford & Bingley's status as an independent financial adviser and tie the society to one insurance provider. Given his track record, some of his critics say they expect the first thing he will do once flotation is out of the way is sell off the mortgage book and shrink down to a £200m market-capitalisation broker.

Listening to his critics, Mr Rodrigues doubts whether people, even the brokers busily running off the buy-notes, really understand what he is trying to do, which is essentially hedge his bets.

Regulation, the internet, and the greater general availability of information are wearing down the consumer inertia on which the building societies and banks have traditionally relied.

The traditional model where banks and building societies have insisted on selling their own products exclusively through their branches, is outmoded. No one expects to go in to Tesco and be offered only own-label baked beans, so why go into Bradford & Bingley and be offered a standard Bradford & Bingley mortgage whether or not there is better value elsewhere.

Mr Rodrigues says: "If you are a small factory but are very efficient you can be a category killer." Neither describes Bradford & Bingley: "We were a middle-sized, retail, financial-services business. We didn't have retail scale, we didn't have manufacturing scale. We weren't even that mutual."

His answer was to find another way: to restructure the organisation so that it was where it could make money in the mortgage market - which, in small specialist niches, it did - and where it could not, it at least took a commission on selling a product which was more suited to the customer's needs.

Mr Rodrigues admits that there is an element of making a virtue out of a necessity. "As a plc you need to have a point of difference. You have to play with the cards you are dealt." But he believes that other mortgage banks or building societies whose only strategy is to hope that they are the great survivors of the current mortgage price war are simply fooling themselves.

Before it voted to go public, Bradford & Bingley, like other building societies, had sought to buy customer loyalty with so-called mutual-benefits packages. As a short-term strategy, giving away profits to members in the form of better interest rates for both savers and borrowers has worked for the likes of Nationwide. But giving away your reserves for short-term market share is slow-motion suicide whether you are a mutual or a plc.

Mr Rodrigues believes that if Bradford & Bingley reaches his goal of making 50 per cent of its turnover from sales commissions on other people's products in five years, he will have a structure under which Bradford & Bingley will be a winner either way. "If the market becomes ever more competitive and people give their shirts away, we are in a wonderful position as a cost-effective retailer. We still take our cut on every mortgage sold. At the same time we still believe there are parts of the mortgage market where you can make money."

Mr Rodrigues believes the critics have not grasped how important it is for the success of his strategy that he has now out-sourced mortgage provision to the joint venture with Alltel. Without that detachment from the manufacturing side of the mortgage business, the change of focus from volume to profits would have been still-born.

"Because we no longer own our factory, I don't have to keep on selling mortgages to keep the factory full," he says. "If you stop being fixated with manufacturing your own product, you can stop wasting your time on customers who don't make you any money. This is a very joined-up strategy."

Those who think he is going the right way are still concerned that even if he succeeds in growing Charcol as fast as he plans, the fact remains that 85 per cent of its current assets are mainstream mortgages where the competition is fiercest. They also question whether demand for non-traditional mortgages is big enough even for Bradford & Bingley, with its 3 per cent market share.

But Mr Rodrigues says he would rather be where Bradford & Bingley is than running the Halifax or Lloyds TSB, both of whom are too big to play the selective-lending game and are condemned by their size to slug it out head-to-head in the mass market where profits are non-existent. "People want this to be very predictable," he laments. And that, of course, is the last thing that Mr Rodrigues would claim to be.