Britain's highest-paid bank CEO came out of near-retirement to pull Barclays from the mire. His Irish-Canadian charm obscures a perfectionist determination to promote talent in his own meritocratic image and to jack up profits by opportunist expansion. It's working
The lights have gone out at Barclays. Matt Barrett, the bank's Irish-Canadian boss, seems to be taking this remarkably calmly. He's shifted our interview to the coffee room, more an off-corridor hallway, where some sunshine seeps in. An electrical fault elsewhere on the fifth floor of Barclays' London head office has wiped out much of the circuitry, pitching other top brass into darkness. Maybe they're being robbed? If so, Barrett, lounging on a sofa with a filter-tip freshly lit, appears more amused than troubled by the predicament.
But then he would, you suspect, remain pretty calm even if the ceiling fell in. Leisurely insouciance is one of his cloaks. At 57, tall, trim, oozing charm, he looks like the ageing matinee idol your mother might fall for: clipped moustache, lived-in face, thick greying hair pulled back, dark eyes twinkling - Omar Shariff meets Harold Macmillan via Liffey Street. On meeting him, you wouldn't for a moment think he is running one of the best-known banks in the world. But then part of him, he admits, can't believe it either.
He was, so the story goes, working out his retirement year at the Bank of Montreal when the call from Barclays chairman Sir Peter Middleton came. Barclays had lost both its previous chairman and its chief executive following a very public feud over strategy, then the first choice as CEO replacement had quit after one day in the job on health grounds (he's now running the Bank of Hawaii - more congenial, you imagine). Barclays seemed in a bit of a mess. Middleton, with the deftness of a conjurer pulling a pigeon from his coat, suddenly emerged with Barrett as the bank's new boss.
Matt who? Many in Canada, where he was well-known as one of their most charismatic business leaders, were just as surprised. He was supposed to be retiring to his condo in Florida. What on earth, money aside - yes, he has two lots of alimony to pay - would persuade him to move to gloomy old London?
The reason, says Barrett, taking another languid puff, was not money, it was just that he couldn't resist the offer. 'I am in the trade, Barclays is a magical name, a wonderful brand. That was the big attraction. Also, I wondered if what had worked for me in the North American context would work in the UK. So, curiosity and intellectual challenge, I guess.' And Middleton wanted an experienced banker with a bit of mileage left on the clock. The match was made.
That was two and a bit years ago. And since then, Barrett's Irish-Canadian lilt and folksy eloquence have become music to the ears of Barclays' shareholders. The share price has risen (pounds 16 to pounds 21), the profits have come in on target (up 9% to pounds 3.3 billion last year), the retail businesses are performing solidly, the Woolwich - the building society that he bought for pounds 5.4 billion in year one - has been efficiently subsumed. Middleton says he hired Barrett to push on four key issues: to articulate strategy, to build a strong centre that would add value for the group, to push through a pay policy everyone understood, linked to business performance, and establish a system of internal succession, so that when he left, Barclays would not be scouring the world again for a new boss. All are on track.
So is everyone happy? No, of course not, because this is a bank and we all have difficult 'issues' with banks these days, not least how much they charge their customers, how much profits they say they need to make - more than one politician would like to take a chunk of those - and how much they reward their bosses. Barrett is now Britain's highest-paid bank CEO, earning pounds 1.8 million last year before pension contributions of pounds 425,000. He is sitting on a share option scheme that could net him many, many millions more. You have to ask: what is he going to do with all that money - buy more of Florida?
Well, no, pounds 35,000 a week is just what it costs to employ a North American banker these days, but so long as Barclays performs, investors, doubtless, are happy. And as Barrett points out, that covers pretty much all of us, via pension funds, unit trusts, whatever.
'Banks are not owned by half a dozen plutocrats,' he says, crouching forward on the sofa. 'In the age of pension fund capitalism, our profits are securing the retirements of millions of ordinary men and women - that's what makes me get up in the morning. Our biggest contribution to the public good is not what we do in terms of philanthropy but what we do creating wealth for the ordinary men and women who own Barclays, through mutual funds and unit trusts and pension funds invested in us. Politicians sometimes forget that.'
So has he pointed this out to Gordon Brown?
Barrett smiles smoothly. 'Yes, but I don't think he gets up in the morning waiting to hear what I said last.' And then he chuckles, raising his eyebrows wryly, as if the idea of him, an uncomplicated lad from County Kerry, influencing the chancellor of the exchequer is quite the silliest notion in the world.
There is a quality about Barrett, a low-key magnetism, a charismatic calmness that is unusual among bosses, and virtually unseen among bankers. Maybe that's because he is in pretty much a no-lose situation here. Like those Hollywood stars now cramming London theatres, if he wins, he adds bottom to a glittering career. If he fails, he can put it down to Brit idiosyncrasies and get back on the plane to Miami, somewhat richer than when he was booking the same flight from Montreal.
Yet the key, perhaps, is that he doesn't believe he is going to fail. He has, according to those who worked with him in Canada, changed his style considerably from the young man in a hurry who would do any job, however unpromising, to impress his bosses as he worked his way up the Bank of Montreal. Now he has the confidence of an executive who has done it all before - much of the UK banking market is developing after the North American pattern - and the assurance of a leader who is playing to his strengths.
'This really is the perfect job for Matt,' says Gary Dibb, the organisational psychologist who Barrett brought with him from Canada to head up Barclays human resources. 'It requires the two great attributes he has: a head for strategy and the ability to communicate.' No wonder he oozes insouciant charm.
That calm confidence under pressure is being fed down the line too, as Barrett has spent much of his first two years talking to the troops, getting his message over to the employees, who have traditionally been among the bank's less receptive listeners, continually downsized, threatened by technology and the consolidating market. And here Barrett has another great advantage over many of banking's fast-tracked senior cadre: he never went to university. He worked his way up from the bottom, and appears to have an affinity with his workforce that is pretty unusual even in this day and age of CEO canteen get-togethers, shopfloor flesh-pressing and the rest.
Barrett even makes jokes about what his recruitment at Barclays has done to top management's intelligence quotient. 'I've brought down their average IQ level by about 10 points,' he chortles. In fact, like many of his generation who have worked their way from bottom to top in banks, he has been running in front of the waves of graduate entry all his career, and likes nothing better than working harder, making himself more available, than his higher-educated rivals. It is a point he makes repeatedly to any juniors foolish enough to tell him that a prospective job move doesn't fit their intended career direction. 'Career path planning? Absurd idea!'
Why? Because that wasn't how Barrett progressed his own career: he was the jack-of-all-trades who offered himself for anything, especially those jobs that others didn't want. 'It's the immigrant mentality,' he smiles.
Born the only son of a successful Kerry bandleader, he left Ireland aged 18 to find work in London. He had wanted to be a writer. 'I didn't have a disposition towards business at all, I was very unambitious as a youngster, an unmitigated disaster at school.' But his Dad had had a wartime job at the Bank of Montreal in London while studying music, and fixed him up with the same as somewhere to start. He never left.
Barrett says he was both repelled and fascinated by what he found in banking. He hated the hierarchicalism of the profession, the don't-think and do-what-you're-told. It was too similar to the doctrinaire religion with which he had been brought up, sent to a Catholic school where you got belted by the teachers if you misbehaved, and belted just in case you were thinking of it. 'Nowadays,' he adds as an aside, 'you would sue them.'
Yet he also found that banking was about people. 'And when you are dealing with people and money you see all aspects of the human condition.' He was hooked. 'It's like a narcotic, you miss it when you are away from it. That's why I love branches, and why my sympathies are more with front-line staff than with anyone else, because I remember working there and how emotionally laden the work is.'
But aren't branches disappearing? 'No,' he laughs, 'they're like cheques. They've been talking about the disappearance of the cheque for the last 30 years, and you know what? They're still here!'
He was lucky, he thinks, that he wasn't at a British bank, where promotion - in those days - would have been barred because he hadn't been to the right school or had the wrong accent. When the Bank of Montreal (two branches in London, set up initially just to pay troops in the war) suggested he transfer to Canada and build a career, he jumped at the chance. Once in Canada, he says, he was 'blown away' by the opportunities available. 'It was a total shock how young people were in managerial positions. It was a country of immigrants. I felt at home there.'
More pertinently, he felt he could make real progress. 'I was struck by the fact that ability and achievement were all that mattered. It was about what you do, what you produce. All those excuses I had used about being poor and Irish, I couldn't make them any more. I accepted that I could make my own life, I could overcome anything through effort.'
And those writing ambitions? Out the window. His father had died when he was just 19 and he was left as the only breadwinner for his mother and elder sister back in Ireland. That event, more than anything, changed his life and, he thinks, his personality. He grew up fast, became more serious, more intent on success.
And he found he was a good manager. Why? Maybe genes played a part. He liked organising, just as his father had loved running his two bands, one a jazz dance group, another the quartet where he played piano accordian for ceilidhs. More importantly, he picked up his father's communication skills. This, he feels, has played a real part in his business success.
'One of the things you commonly see is that CEOs are terrified of public speaking, and I never was. I attribute that to seeing my father on stage and on TV, and I just thought, that's what people do, get up and talk. For some reason I had no fear of it.'
Others have noted just how well Barrett can manipulate an audience - Barclays non-exec Sir Nigel Rudd, who heads the board's remuneration committee, describes him, intriguingly, as like 'a conductor with an orchestra'.
It's the same application he showed on his way up through the Bank of Montreal, taking on the jobs others didn't want. He came to senior management's notice for turning round one branch where the systems had collapsed. Dibb, who worked with Barrett at the bank, says that marked the young tyro's card. 'They were asking: who is this Irish kid who has turned round this spectacular mess with so much panache?'
By the age of 45 he was CEO, and he went on to become one of Canada's most conspicuous business leaders. 'You get to mouth off on political issues as they affect economics and I guess that gets you noticed,' he laughs softly. But he also garnered headlines when he divorced his wife, by whom he has four kids, and remarried a former glamour model. That second marriage hit the rocks too, leaving Barrett with something of a reputation as one of those bosses who totes his complicated, high-profile private life around with him.
Certainly, two ex-wives and some emotional fall-out made it easier for him to sell everything and cut many of his ties with Canada when he came here, hoping to dive into anonymity. 'London is so full of fabulous, interesting personalities, I thought no-one will notice me, but it didn't last. I'm doing my best to be boring now, but I can't seem to escape the reputation.' Then he laughs again in such a way that you can suspect he really quite enjoys it.
Maybe there were other reasons for leaving Canada too. Middleton says he knew Barrett was available because the Bank of Montreal's proposed merger with the Royal Bank of Canada had been knocked back by regulators, he'd been 10 years in the top slot and he wanted a change. Barrett had always had good relations with Barclays, had often dropped in for a drink when he was passing through London, picking up new suits - he's always worn British, he tells me.
So, had he met Martin Taylor, who headed Barclays from 1994 to 1999? Barrett looks wary. 'I paid a courtesy visit, I remember him as very pleasant, by all accounts a fine man.'
He shifts a bit uneasily. Taylor, on these pages, recently criticised Barclays' non-executives for being 'not of high enough quality' and 'not competent' to make choices about such a complex business. Did that surpise Barrett?
'Well,' he says, 'non-execs are rarely subject-experts in the business. I was on the Seagram board and not an expert, bar being a consumer!' he laughs.
But isn't it worrying that a bank like Barclays has a 13-person board and only five understand the complexities of what's going on?
He shrugs. 'In most boards worldwide you would find a majority are not subject-experts.' To compensate, he says, they must have the business experience to monitor what the executives are doing. But, he adds, there is no protection for any board of directors from a rogue management. Fact of life.
Barrett, you can tell, is on the defensive. But like any auto-didact, he also has that whiff of suspicion for those who tout intellectual calibre. He is a bit blunter about the weaknesses he found in Barclays' top management style, as established by Taylor.
'The cerebral horsepower here is very high. What we are working on is moving from intellectual elegance to putting the puck in the net, if I can use a Canadian metaphor.'
Too many thinkers and not enough doers? He takes a contemplative puff. 'I think there is some truth in that.' Consequently, he is moving senior people around, putting them in unfamiliar fields, promoting younger executives, trying to break down the baronial fiefdoms that have traditionally run Barclays - to build, in essence, a more collaborative team.
So what does he want to do strategically? Grow the bank, of course. He's set targets that look ambitious: double the value of the group every four years, reduce business costs by pounds 1 billion, push Barclays into the world financial top 10. By organic growth or acquisition? 'You have to look at merging or buying,' he says, 'but I think it is prudent to build a strategy on an organic growth basis, then you are in good shape to benefit from the continuing consolidation and transformation of the industry worldwide.'
Opportunistic, in other words. He, like every other bank boss, also wants to be an 'employer of choice' too, so he's pushing hard to make Barclays a better place to work; setting up a 'virtual university' internally where staff can retrain or learn new subjects, coaxing more women out of 'pink-collared' ghettoes into senior roles. 'In my last company,' he says, 'we went from 4% of senior executives being women to 35% in 10 years. Here we are about 11%, so we've a long way to go, but the good news is we have all this talent we can tap into ...'
And certainly, on the limited evidence an outsider can glean, staff seem to have bought into it. If reports are correct, many appear shiny-eyed from meetings with him. His style with senior executives is equally sure-handed. He delegates well, keeps above the detail - 'on the chairmany-side of CEO,' sums up Middleton. 'He doesn't try and have a detailed knowledge of every business.'
Barrett's only weakness, say those who know him, is that beneath the attractively laid-back persona that he cultivates, he is actually driven by a perfectionist zeal that makes him push himself and others too hard. He works long hours, sleeps little, consumes the business.
But in a sense that's what you expect from a FTSE-100 boss. That - dare I say it? - is what you pay them for. So his shift to Florida is on hold. He won't retire to Ireland, he says; though his sister is still there, his mother is now dead. He has an Irish passport and a Canadian one, but he's not sure where his roots are. 'You'll never take the Paddy out of me entirely, I guess, but I am a man of a lot of countries now.'
Most of all, he wants to prove first that he can make it in Britain as well as Canada. 'No-one's headed a major bank on both sides of the Atlantic, because you're normally too old before you get there!'
It's also, maybe, a bit of unfinished business from the days when he left Britain, when boys from Dublin would encounter dreadful discrimination and landladies would advertise rooms: 'No Irish, dogs or blacks'.
To come back as one of the Kings of the City, that must be deeply satisfying. Barrett looks slightly unnerved when I put that to him, and sidesteps it. Instead, he breaks into oratory about 'the exciting journey' they are all on at Barclays.
He finishes: 'The best you can hope to do as a CEO is ask yourself: did I leave the place better than I found it? Did I build capacities and capabilities in the organisation that will equip it to survive and grow in the future? If you can answer both of those in the affirmative, then the labourer is worthy of his hire.'
The eyes twinkle, the smile broadens, the audience sighs. Some labourer.
< BARRETT IN A MINUTE 1944 Born 20 September in County Kerry, Ireland. Educated at the Christian Brothers School, Kells 1962 Joined Bank of Montreal, London, as trainee 1967 Transferred to bank's HQ in Montreal 1978 Vice-president of Bank of Montreal's British Columbia division 1981 Deputy general manager, international banking 1984 Deputy, group executive treasury 1985 Executive vice-president and group executive, retail banking 1987 President and chief operating officer, joins board of directors 1989 Chief executive, Bank of Montreal 1990 Chairman and CEO 1999 Joins Barclays plc as chief executive