After Allan Leighton turned around the fortunes of ASDA and Lastminute.com, he could have opted for the easy life, but instead became chairman of the Royal Mail. He tells GB why he doesn’t do easy.
After Allan Leighton turned around the fortunes of ASDA and Lastminute.com, he could have opted for the easy life, but instead became chairman of the Royal Mail. He tells GrowthBusiness why he doesn’t do easy.
Since Tony Blair appointed Allan Leighton as chairman of the Royal Mail in 2002, around 50,000 employees have left. During that period, it’s gone from losing £1 million a day to posting profits across each of its divisions. When Leighton steps down in March 2009, he will have been the longest-serving chairman in the organisation’s history. ‘I’m proud of that,’ he says. ‘I could have taken an easier job but I wanted to take it on because it was tough.’
That said, he accepts that he may not be the most popular figure in the eyes of the workforce. ‘They know what they get from me and half of them like it and half of them don’t,’ he states. ‘They know I’ll always be straight with them and I’ve done that from the very beginning. I’ve told them things that may not have been too palatable but they’ve turned out to be right.’
Leighton likes to get to the point. No digressions. No nonsense. At ASDA, his management style and sales nous saw the company grow from a £500 million concern to one that Wal-Mart bought in 1999 for £6.2 billion.
‘ASDA was as tough as the Royal Mail,’ he says. ‘You know when you go in that probably a third of the people are not going to survive.’ He is a firm believer in making swift changes in the initial three months of joining an organisation. ‘The first 100 days in any business are critical. I make sure that whatever organisation I go into, we produce a 100-day plan. After that time, things slow down a bit.’
At ASDA, Leighton assembled a future who’s who of British retail, including Justin King (chief exec at Sainbury’s), Richard Baker (CEO of Alliance Boots) and Angela Spindler (MD of Debenhams until earlier this month).
‘You know when you go in that a third of the people won’t survive’
‘I brought together individuals I knew – largely because we couldn’t get [then-established] people from retail as everybody thought we were basket cases. I wanted people who knew two things: firstly, the “customer is king”; secondly, “people are important”.’
These are glib phrases, as Leighton admits. In the day-to-day running of ASDA, they meant creating a collective, so there were no boardrooms or special offices and everybody was given shares in the company. Employees referred to one another as “colleagues” and the “huddle” was introduced.
‘The “huddle” was just two or three minutes when staff got together and the managers said what they needed to say and then would ask what they could do for the staff. That happened at ASDA every day, in every store between every shift.’
Leighton would visit each store manager every 12 weeks. ‘Underneath what people thought was all warm and cuddly, was a lot of rigour and structure,’ he notes, adding that the best key performance indicator is talking to people.
When he started at Royal Mail, his approach was the same. ‘I went out and talked to as many people as I could to identify the main issues. I visited the delivery offices. I went with postmen on their rounds. It allows you to get a ground-up view of an organisation, then you go and sort it out.’
Back to basics
Leighton currently sits on nine boards – including BSkyB and Selfridges – and has been involved with numerous organisations during his career (including Breast Cancer Care, in whose aid he is hosting a gala dinner this month). All that distracts from the fact he spent almost two decades at food company Mars, which he affectionately describes as ‘one of the best management schools in the world’.
‘There was none of this leadership training type of stuff where you’re made to climb Everest,’ he says. ‘You were taught the basics and this was built into the system and they’re massive building blocks that you never forget. One of my criticisms is that everything today has got too fancy.’
‘One of my criticisms is that everything today has got too fancy’
The bulk of Leighton’s experience has come from working with corporates, but he was part of the turnaround team that made a success of Lastminute.com. He believes the principles of running a good and successful company are the same whatever the size of the business.
‘Whether it’s big or small, you have exactly the same problem. You have to protect your cash and you must have a real sense of purpose about what it is you are trying to do.’
He says it’s harder to run a smaller company than a corporate due to the lack of scale and resources. ‘You’re very dependent on what you do on a daily basis as your reputation can go up or down very quickly. Small businesses have to be more nimble on their feet and creative.’
Pretty much everything Leighton stands for can be summed up in two words: common sense. He has the work ethic of someone who started work at 18 and didn’t go down the university route (although he did study an MBA at Harvard in his thirties). You get the idea that when he joins a company, he sees it as a personal mission to root out people who are going through the motions.
‘Leading a company is not a popularity contest; there’s a job to be done. Your job is to do the right thing for the organisation and the people in it. So long as you are doing that, it doesn’t matter if you’re unpopular. But in the long run, you will be liked as people will see you did the right thing and they will thrive on the back of that.’
The role of a CEO is to ensure people are doing what’s in the best interests of the business. For Leighton, that means focusing on the job in hand by minimising distractions. In a tone of disgust, he talks about unnecessary ‘paperwork, emails, bulletins, phone calls and meetings’.
More often than not, this stops you from concentrating on what matters. ‘You need
to minimise all of that and let people do their job.’