THE HUMAN FACTOR

THE HUMAN FACTOR - Someone who brings new ideas and energy from outside the company can have an invigorating effect that an insider can find hard to achieve.

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

Someone who brings new ideas and energy from outside the company can have an invigorating effect that an insider can find hard to achieve.

When James Benfield became CEO of an unquoted furniture manufacturer in May 2001, the headlines were few. At the end of last year, however, the media suddenly took an interest in Christie-Tyler. For having spent time streamlining the company, the former marketing director of Marks & Spencer was ready for something more exciting: a partnership to create a new range of stylish furniture with Sir Terence Conran.

The idea has won the admiration of rivals in the furniture industry.

And it demonstrates why the private equity firm that now owns Christie-Tyler was probably right to recruit an outsider to lead the company. Benfield had spent 27 years with M&S before leaving as the boardroom revolution began. He brought a retailer's eye and a marketer's flair to an industry lacking both.

Despite fashionable talk of flatter structures now evolving in British business, companies still depend on getting talent at the top. Someone who brings new ideas and energy can have an invigorating effect that an insider can find hard to achieve. Those who have spent a long career with a company cannot easily take a new broom out of the boardroom cupboard.

They are too associated with the old strategies and, often, are imbued with the firm's way of thinking and pace of moving.

That was one reason why Steve Russell's reign as CEO at Boots looked likely to be short-lived. Although he is widely regarded as a likeable chap, Russell had spent most of his career with the company. When he eventually made it to the top job, the business was only just showing the signs of problems that had long been building.

Russell played around the edges, launching new health ventures, but these distracted from the task of restoring the health of the core business.

He'd probably been too close to the problem for too long to recognise it. Once it became inescapable, he seemed unable to move fast enough to address the customer disquiet.

Few recent top-level appointments have been as imaginative as that of Benfield. Royal & Sun Alliance, for instance, faced with replacing a discredited chief executive, has ventured outside the firm but not beyond the industry.

It seems few proven high fliers were prepared to take on the role, so the company settled on Andy Haste, chief executive of Axa Sun Life but a name that did not inspire enthusiasm in the stock market.

With financial services so unpopular with the public, a more imaginative route might have been for the RSA board to appoint someone who knew about selling to the public while others provided the insurance expertise. That sort of thinking inspired Hutchinson when it put Hans Snook in charge of its infant mobile phone business. The result was Orange, a testimony to the marketing skill of the former hotelier, who was happy to leave technology to others.

By contrast, the man who will succeed Sir Christopher Gent as chief executive of Vodafone in the summer is an engineer with ample experience of telecoms.

Yet Arun Sarin was not a name that had featured on most people's list of contenders. Although he has been on the board of Vodafone since it acquired AirTouch, the US group where he was chief operating officer, in 1999, Sarin is a relative outsider. It will be intriguing to watch the impact this Indian-born graduate of the University of Califonia has on the Newbury-based business.

Experience gained in other organisations can usefully transfer across sectors. Benfield was involved with the launch of the Autograph range at M&S. It was a drastic step, recruiting designers from outside the group to design capsule collections for the store and to put their own names on the clothes. Now that is what he is doing at Christie-Tyler with the Conran-designed range. This partnership offers an exciting possibility of expansion for the manufacturer.

Conran, now 71, is hugely enthusiastic about the project. The designer has long espoused the cause of taking good design to the mass market and gets depressed at the thought of what has happened to Habitat since he lost control of the business he founded. It now belongs to the Swedish owners of Ikea but does not seem to be flourishing under their care.

Vittorio Radice is another with fond memories of Habitat who is about to try and improve the furniture on offer on the high street. The appointment of the Italian chief executive of Selfridges to join M&S and oversee its new furnishings stores is a truly imaginative one.

He will bring style and flair to M&S and, since he'll be on the board, that will impact across the business and not just in that area where he will be in direct competition with that former M&S director, Benfield.

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