The boss: What does it take to be a great captain of industry? In our survey, the heads of top British companies were asked to name the company chiefs they most admired - and say why. They opted for solid, dependable virtues, Nicholas Faith reports

Click to follow
SIR Richard Greenbury of Marks & Spencer is 'the businessman's businessman', the most respected head of a leading British company, in the opinion of his peers. He is the winner of our poll - the first of its kind - in which the chairmen and chief executives of the FT-SE 100 were asked to say which of their fellows they most admire.

Among numerous tributes, Sir Alick Rankin of Scottish & Newcastle was typical in praising Sir Richard for managing 'to maintain profit growth through an extreme recession when other retailers have been less successful . . . he refocused the business when it appeared that certain important sections appeared to flounder a bit . . . maintained and, indeed, enhanced customer service, their reputation for quality and their training programme throughout this difficult time.'

The confidential poll of Britain's top executives was conducted by the Independent on Sunday to find out how senior executives rated each other, and what qualities they most admired in top managers. They were asked to nominate a fellow chairman or chief executive who has 'made an outstanding contribution in business- building'. We received replies from executives of 88 of the 100 companies polled.

Sir Christopher Hogg, who replied in his own handwriting, neatly pinpointed the key problem in nominating the most successful executive: 'It is of course very difficult to separate a man's so- called achievements from what might have happened in any event. And difficult also to know which high-profile sowers are simply leaving whirlwinds for their successors to reap. Personally I have a predilection for the long-term builders who really over time shape fundamentally the way in which their companies do business, as well as get the strategy sufficiently 'right' to keep growing through thin as well as thick.'

Although Sir Richard Greenbury was the clear winner, gaining nine nominations, with seven for the runner-up, Sir Christopher Hogg, formerly of Courtaulds and now chairman of Reuters, it is clear that the top echelons of Britain's biggest companies are not star-struck. There was a distinct absence of the publicity- conscious entrepreneurs, the Gerald Ratners and Ralph Halperns who flashed through the business firmament during the 1980s. The leaders are not the sort who feature in the gossip columns or have regular tables at the Savoy Grill.

THIRTEEN received three or more votes - constituting the 'top team' (overleaf) - and in all, 44 names (see panel) received one or two votes. Only one vote was cast for someone who had built a business from scratch - but this was inevitable, given the size of the companies involved. Few of the others had big stakes in their company, showing that they were professional managers rather than entrepreneurs, working by consensus and appreciating collegiality in others. One of the main qualities executives admire in one another is teamwork, an ability to work effectively with colleagues.

Brian McGowan of Williams Holdings, a business builder who will shortly retire early to go fishing, nominated Sir Colin Marshall, praising him for taking 'the right strategic direction'. He went on to list his problems: 'Having to face indigenous protectionist groups with political clout . . . surrounded by kamikaze competitors . . . being so directly connected with the public it would be easy for British Airways to fall into the same music hall joke as, say, British Rail.'

Given the size of top companies, most of our executives have either reinforced an existing base, revitalised a laggard, or masterminded a reorganisation. The contenders, after all, are at the top of Britain's largest corporations, each worth at least pounds 1.2 billion.

To a great extent, they have to be organisation men, skilled at fine-tuning their corporate leviathans. For many, the chief task is to maintain the company's market position, to fight off competitors, or to sort out the confusion that big organisations periodically fall prey to. These are not the skills of an entrepreneur. It is the more prosaic housekeeping skills that our respondents admired in one another.

There was one exception. Sir Christopher Tugendhat of Abbey National, who admits to being a director of Eurotunnel, said of Sir Alastair Morton: 'It can very rarely be said of any chairman or chief executive that but for him something would not exist . . . just as George Washington was 'the indispensable man' in the American revolution, so Alastair is in Eurotunnel.'

Morton, like Tugendhat, has duly received his knighthood, and indeed the majority of the nominees are considered safe enough members of the great and the good for knighthoods - or, in two cases, (Weinstock and Sainsbury) peerages.

The omissions are telling. There are no representatives of many important sectors. For instance, no one from any privatised company except BA was mentioned. Although the top team has a due weight of manufacturers and retailers, the respondents do not admire the management of the financial sector.

Two clearing bankers - Sir Jeremy Morse and Brian Pitman, both of Lloyds - were mentioned, and a single merchant banker, Sir David Scholey of S G Warburg. But the ringing endorsement he was given - 'David had the luck to get control at a time when it was possible to do things that could not be done before' - could have applied to any other executive who had taken a rather ill-organised company and managed to combine growth and a proper structure. The respondents' view of the property sector was also dim, the solitary exception being Peter Hunt of Land Securities, who received two votes and was praised as someone who had 'managed shareholder value in a sector that has been ravaged by loss through the recession'. But no insurer was mentioned, nor anyone from any other financial organisation. Equally significant was the virtual absence of anyone from another 1980s favourite - the conglomerates.

Lord Hanson, such a favourite of certain sections of the financial press, received not a single nomination from his peers. 'I don't admire the sort of thing that Hanson does,' said one highly regarded respondent. 'It will inevitably result in a business that has to be broken up because it is cobbled together rather than built.'

The notable exception among the conglomerate chiefs is Sir Owen Green of BTR (though there were two other partial exceptions to the lack of respect for conglomerators, Sir Christopher Lewinton of TI and Allan Gormly, the new chief executive of Trafalgar House, who 'put together the best engineering conglomerate in the UK . . . with total charm and modesty').

Sir Owen was praised by Sir Denys Henderson of ICI for his 'modest lifestyle, which is especially commendable at a time when the cult of ego/personality often appears the end point of those who successfully build businesses'.

Sir Denys Henderson's encomium on Sir Owen Green stressed that he had grown his group 'over a very long period, starting from a distinctly unpromising base'. Sir Desmond Pitcher, chairman of North West Water, and formerly with Littlewoods, nominated Sir Richard Greenbury for his 'fundamental understanding of retail management gained over many years - he is certainly not what one might describe as a 'fly-by-night' '.

'Thick and thin' and 'the long term', were phrases that recurred, not only in the responses, but in the record of virtually all the top team. Six of these (Sir Richard Greenbury, Lord Weinstock, Sir Owen Green, Sir Denys Henderson, Sir Ian MacLaurin and Sir Michael Angus) have not only been with the same employers all their lives, but joined their companies before 1960. All the others who took their present positions within the past decade had served long apprenticeships in other big businesses: Sir Colin Marshall at Avis, Sir Allen Sheppard at Ford and Peter Davis at J Sainsbury.

Only one executive, Chris Haskins of Northern Foods, was singled out for modesty in the rewards he accorded himself. 'His own salary and those of his colleagues are modest and would stand up to the closest scrutiny and the requirement that pay and performance be directly linked.'

These personal qualities clearly had to be backed by a certain steeliness. Sir Denys Henderson 'has an engaging personality, but beneath all that, there is a tough centre'; Bob Bauman of SmithKline Beecham 'mixes charm with boundless energy and leads by example'. Dominic Cadbury is a 'warm friendly person who is valued highly by the directors and, I am satisfied, by the employees. He is informal and considerate but a demanding boss'.

Peter Jansen of MB-Caradon 'is very good with people and runs his company effectively and tightly', while Sir Allen Sheppard of Grand Metropolitan is noted for 'boldness and good human relations development' (this of a man of whom it was once said that 'he manages through a light grip on the balls').

Sir Allen, like two others in the top team (including the winner) combines the roles of chairman and chief executive, in defiance of the Cadbury recommendations.

IT was sustained success, rather than any particular organisational formula, which was clearly of crucial importance. Sir Derek Birkin of RTZ was singled out because of his success in 'identifying and promoting a very young colleague to become chief executive, and has adapted his own role and style to enable his chief executive to have space and to develop the company'. This reply showed clearly that one of the important qualities to our respondents was the ability to choose the right people.

Sir Christopher Hogg, with his 'exceptionallyclear strategic mind', had proven his flexibility. He had overseen 'the transformation of Courtaulds and was 'providing excellent non-executive leadership of Reuters'.

From a strictly business point of view, the emphasis was on fundamental if unexciting virtues. Lord Weinstock said his fellow-peer Lord Sterling of P & O had 'consistency of performance . . . in a turbulent world he remains a man of uncluttered commercial vision'.

Sir William Purves of the Hongkong &Shanghai Bank 'displays a combination of forcefulness, entrepreneurial spirit and straightforwardness in business'. Clive Thompson of Rentokil had the 'ability to see what were the essential strengths of Rentokil and how they could apply to other service operations'.

Greenbury was typical of a prominent strand in the replies, in that he was perceived as having given a new impetus, a new sense of direction, to an organisation which had lost its way. Similarly Charles McKay of the Inchcape Group was praised for 'doing a splendid job of repositioning the company'.

Focus was a key element in the equation. Typically, Peter Davis was praised as the 'architect and the driving force behind the repositioning of Reed from a packaging and publishing business to becoming one of the major world publishing companies. Most recently the merger of Reed and Elsevier was again inspired and very much negotiated by him.' In similar vein, Sir John Egan rewarded Sir Anthony Tennant of Guinness for his 'absolutely professional clean-up of a strategically correct but chaotically managed takeover'.

It was for his skill in carrying through a particularly tricky merger that Bob Bauman was singled out. Sir Peter Walters, Midland Bank chairman and a non-executive director of SmithKline Beecham, recognised the 'enormous drive and attention to detail that the merger of two significant and complicated companies involved'.

In all the replies there was a strong strain of clubbiness. Clearly these businessmen are not prepared to rely on hearsay, let alone what they read in the press, but prefer to judge their peers through personal contact, above all by working together on the same boards.

Fellow directors clearly think a great deal of Sir Allan Sheppard, Dominic Cadbury, Peter Davis and a number of other contenders. There were, however, limits to this mutual support. Only in one case did a chairman nominate his own managing director.

In a few cases the praise seemed overdone, in that the undoubted success of the companies involved was not due entirely to the executive involved. One admirer watched 'from close quarters how Sir Allen Sheppard has built Grand Metropolitan from a relatively obscure position to one of Britain's leading conglomerates' - which is rather unfair to the Group's founder, the late Sir Maxwell Joseph, and to his successor, Sir Stanley Grinstead.

Similarly, Lord Younger praised Dick Evans of BAe, who took over 'when the whole management of his company was in disarray . . . he has not only kept British Aerospace afloat but has restructured the whole of its activities in a most impressive manner.' John Cahill, the chairman, also deserves some credit for BAe's recovery.

The respondents' generosity was sometimes real enough, when suppliers singled out one of their big customers or heads of big companies spoke respectfully of their competitors. One of Sir Christopher Hogg's main competitors recognised 'his contribution to the textile industry'. One leading retailer nominated Lord Sainsbury, while another praised Sir Alistair Grant of Argyll for his success in the 'fundamental reconstruction and development of the Presto and Safeway businesses.'

And it was Tesco's suppliers that best recognised Sir Ian MacLaurin's contribution to the chain's growth. 'He totally changed the nature of this business from a cowboy outfit to a very professional, progressive company,' said one. When he took over, said another, 'Tesco as a retailer was downmarket, intermittently successful and without a strategy - other than 'pile it high, sell it cheap'. In under a decade Ian has lifted the business into a serious competitor to Sainsbury . . . the achievement is in comparative terms greater than Sainsbury or Argyll - both of whom had a head start when Ian MacLaurin took on Tesco.'

A handful of respondents singled out broader achievements, although sometimes these were business-oriented. Sir Christopher Lewinton of TI was nominated for his role 'in restoring morale and pride in the British engineering business' and 'establishing a significant specialist engineering group based in the UK'.

More generally, Sir Michael Angus was praised for increasing the influence of the CBI where, said another respondent, he has been 'unafraid to set out in a pragmatic commonsense way policies important for industry, however unpopular they might be in political circles'. But it was Chris Haskins of Northern Foods who went furthest: 'He has spoken up in public on a number of issues, including constructive criticism of the Government's economic policy.'

The social leader was undoubtedly Sir Allen Sheppard. His chairmanship of the Government's London Forum showed his recognition 'of the need to create an effective business environment for British commerce and industry'. Robert Evans, chairman of British Gas, said: 'I have a great admiration for Sir Allen's 'hands- on' approach to leadership of the corporate citizenship crusade.'

One salient factor was the the classlessness of the names. No Etonians, indeed only a couple of public schoolboys (and a sprinkling of Oxbridge graduates) were mentioned. But it is evident that one quality is admired above all others by Britain's top businessmen. It is described in many different ways, and the quality itself is more often implied than named outright. It can mean different things in different circumstances and when applied to different men. In most contexts it is really a mixture of several different qualities, but the combination is essential in a successful manager. It is 'leadership'.-

TWO VOTES: Dominic Cadbury, chief executive of Cadbury Schweppes since 1984; Peter Hunt, chairman and managing director of Land Securities since 1987; David Lyon, chief executive of Bowater since 1987; David Simon, group chief executive of BP since 1992; Clive Thompson, chief executive Rentokil since 1982.

ONE VOTE: Malcolm Bates, deputy managing director of GEC since 1983; Sir Derek Birkin, chief executive of RTZ since 1985, chairman since 1991; Sir Colin Corness, chairman of Redland since 1977; Dick Evans, chief executive of British Aerospace since 1990; Sir Paul Girolami, chairman of Glaxo since 1985; Allan Gormly, chief executive of Trafalgar House since 1992; Michael Green, chairman of Carlton Communications since 1983; Sir Ernie Harrison, chairman Racal 1966-92, of Vodafone Group since 1988; Chris Haskins, chairman of Northern Foods since 1986; Alan Jackson, managing director of BTR since 1991; Peter Jansen, chief executive of MB-Caradon since 1991; Sir Christopher Lewinton, chief executive of TI since 1986, chairman since 1989; Charles Mckay, chief executive of Inchcape since 1991; Sir Jeremy Morse, chairman Lloyds Bank 1977-1993; Sir Alastair Morton, chairman of Eurotunnel since 1987; Bruce Pattullo, chief executive of Bank of Scotland since 1988; Mike Perry, chairman of Unilever since 1992; Brian Pitman, chief executive of Lloyds Bank since 1983; Sir William Purves, chairman and chief executive Hongkong & Shanghai Bank since 1988; Patrick Rich, chief executive of BOC since 1991, chairman since 1992; Gerry Robinson, chief executive of Granada since 1991; Lord Sainsbury, chairman of Sainsbury's 1969-92; Sir David Scholey, chairman S G Warburg since 1984; Sir Patrick Sheehy, chairman of BAT since 1982; Sir Colin Southgate, chairman and chief executive Thorn EMI; Bernard Taylor, chairman of Medeva since 1990; Andrew Teare, chief executive of English China Clays since 1990; Sir Anthony Tennant, chairman of Guinness 1989-92.

(Photograph omitted)