LIFERS VS HOPPERS

LIFERS VS HOPPERS - The modern portfolio-style jobhopper is touted as the role-model executive for the future. So why is it that most of those at the top of the league are single-company careerists? Matthew Lynn reports.

by Matthew Lynn
Last Updated: 31 Aug 2010

The modern portfolio-style jobhopper is touted as the role-model executive for the future. So why is it that most of those at the top of the league are single-company careerists? Matthew Lynn reports.

What do the following companies have in common: the Royal Mail Group, EMI, J Sainsbury and Cable & Wireless? Apart from the fact that they are all British and employ lots of people, it is this: they are all run by people who, on arrival, didn't know much about the businesses - and never claimed to.

The Post Office is run by Adam Crozier, whose previous job was running the Football Association. EMI is chaired by Eric Nicoli, who spent most of his career making biscuits before he switched to making records. Sainsbury's is run by Sir Peter Davis, who started his career at the company he now heads but left in 1986, after which he made his name twice over, in publishing and in insurance, before returning to retailing. And C&W is chaired by Richard Lapthorne, who gained his reputation as British Aerospace's shrewd finance director, not selling telecoms equipment.

The generalist, the person who can make a swift, easy transition from one industry to another, is in the ascendant. Look at the people who are getting the plum jobs and those who are fast-tracking their careers, and in the past few years they have mostly turned out to be masters of the art of switching effortlessly from job to job and from industry to industry.

Take some of the big personalities to have emerged in British business in the past few years.

Allan Leighton, the former chief executive of Asda, has become the model of a modern portfolio executive. He chairs the Royal Mail Group, Bhs, the building firm Wilson Connolly and the internet travel business Lastminute.com.

Show him a pie and he pops a finger into it.

Or take Gerry Robinson, who earlier this year could be seen preaching to the country on management in the BBC2 series I'll Show Them Who's Boss. Since leaving Granada, where he pushed the notion that anyone could run any business so long as they were smart and knew what a profit margin was, he has split his time between chairing the drinks conglomerate Allied Domecq and running the Arts Council.

Then there's Richard Branson, still Britain's best-known entrepreneur.

Music, airlines, shops, telecoms, drinks, even bridal wear - it makes no difference to the bearded maestro. The philosophy of his company has always been that every industry is susceptible to a sprinkling of Virgin stardust.

The message from all those individuals? That business is just business - knowing about a particular industry or product is not nearly so important as knowing how to lead an organisation, how to inspire and motivate people, and how to squeeze profits out of any line of trade. 'Overall, companies need diversity if they are to achieve long-term success,' argues Julian Birkinshaw, an associate professor of strategy at London Business School.

'One of the reasons that companies get into trouble is that they keep on drawing from the same gene pool. They don't bring in new people with a fresh perspective.'

That's a popular view, and one that is pushed hard within business schools and by management theorists. But is it really true?

Are generalists better at running business than specialists? Or is it the other way round?

Here's another list of companies, again all British, and all very big: BP, Cadbury Schweppes, Tesco, Unilever and GlaxoSmithKline. What do they have in common? They are all run by people who have spent most of their careers in the same organisation. BP is run by Lord Browne, who has been with the oil giant since the very beginning of his career - he signed up with the company in 1966 as a university apprentice. Cadbury Schweppes is run by Todd Stitzer, who joined its North American drinks business in 1983 (and it is chaired by John Sunderland, who joined Cadbury's Indian business in 1968). Tesco is ruled by Sir Terry Leahy, who joined the supermarket chain in 1979 and has never worked anywhere else.

Unilever's chairman is Niall Fitzgerald. He started working for Unilever's Irish division in 1967, and worked his way steadily up the ranks of the consumer goods giant. And GlaxoSmithKline is run by Jean-Pierre Garnier, who in this crowd looks like a temporary shift worker. He has been with SmithKline Beecham, one of the two companies that merged to create GSK, since 1990. Before that, he spent 14 years at another drugs company, Schering-Plough - a grand total of two employers in his entire career, and both in the same business.

Those five men have something else in common as well. They are, in descending order, running the five most admired companies in Britain, as ranked in MT's annual survey (see table).

So maybe the specialists, the tortoises of the corporate world, know something that generalists, the hares of business, don't. It is unlikely to be just a coincidence that the five most admired companies in the UK are all run by people who have spent their whole careers within one organisation.

Generalists vs Specialists is one of the great current debates of business - a modern-day version of the old issue of whether cricket was a better game when the team consisted of gentlemen or players.

Certainly, plenty of senior businessmen are dismissive of the idea that anyone can run any business. Lindsay Owen-Jones, the chief executive of L'Oreal, recently made this point: 'You've got to join a good company and stay with it. All this nonsense that has been said about job-hopping is the most destructive thing I know. Great careers are built by joining a good company, doing everything it wants, going everywhere it suggests you might want to go, and volunteering for the tough jobs before anybody asks you.'

The trouble is, a view such as that looks slightly shop-worn and old-fashioned. Right now, the generalists seem to be coming out on top. Look at the big appointments that have been made recently, both in this country and across Europe. Sir Christopher Bland, whose diverse professional interests have spanned publishing, freight and the media, really made his name in television at LWT and the BBC, and was parachuted in to rescue British Telecom. The French utilities and media conglomerate Vivendi Universal turned to Jean-Rene Fourtou, a man who built his reputation with the drugs company Aventis, to clear up the mess left by Jean-Marie Messier. Ahold, the Dutch supermarket giant, brought in the Ikea veteran Anders Moberg to sort out the problems created by an ill-judged acquisition spree.

The mood of the times appears to be with the job-hoppers, rather than the one-company men. Wide rather than deep experience is what recruitment boards, and the headhunters they employ to seek out talent for them, are looking for.

A recent survey by the Chartered Institute for Personnel and Development found that companies increasingly like their senior executives to come equipped with a CV that is broad rather than deep. Six out of 10 employers, the CIPD found, agreed with the statement that 'increasingly, employees will have to change organisations to move up the career ladder'. And 59% said that moving to work in a different country or a different business unit will in the future be the key to progressing your career.

'Organisational structure has changed so much in the past decade that people's careers have changed as well,' says Jessica Rolph, an adviser on learning, training and development for the CIPD, which led that survey.

'The job for life has disappeared, so people have to jump around from organisation to organisation much more than they used to.'

In her view, few people can spend their entire career within one organisation any more - and they are usually not the most talented individuals. 'In the past, you could just stay within one organisation for your whole career, and gradually move up the hierarchy,' she says. 'That isn't possible any more. Employers would much rather people hopped around, rather than just stagnating in one place.'

The business schools can take some of the blame for the rise of the generalists, concedes London Business School's Birkinshaw. Those are the kinds of people they churn out - the idea that a skilled manager can run any type of business lies behind the very concept of an MBA. 'In business schools, one of the things we try to create are what are called T-shaped managers,' he explains.

'That's managers who have real depth in one direction, but then have breadth on top of that.'

It sounds good. The trouble is that many of the managers may not live up to the billing. Business and leadership skills are all-important, but they need to be backed with a genuine understanding of the issues a firm faces. If they aren't, the chances are that many of the job-hoppers won't be able to make a lasting impact.

Gerry Robinson has run a lot of companies but leaves a thin record of achievement - Granada was broken up after he left and will soon be forgotten.

Crozier's legacy at the Football Association is looking increasingly tarnished, and he has impressed few people at the Royal Mail. And Nicoli has not solved any of EMI's problems.

Whether a company chooses a generalist or a specialist to run it generally depends where it is in its own evolution - and what kind of shape it is in when the decision is made.

It is unfair to focus on the most-admired companies and conclude that all businesses are better run by specialists who have clawed their way up from the graduate trainee programme to the chief executive's office.

Why? Because all those companies were in great shape to start with. Why would Tesco want to bring in somebody from the insurance or the engineering industries to run the business?

What could they possibly teach it that Tesco doesn't already know?

Similarly, why would BP want to bring in someone from outside the oil industry, or Cadbury from outside the confectionery trade? Those firms are far from broke, so why start trying to fix them.

It's equally unfair to beat up too hard on the generalists. Adam Crozier may not look to be doing a terrific job at the Royal Mail, but it wasn't in great shape to start with - and there wasn't necessarily some 30-year Post Office staffer waiting in the wings who could have done the job better.

And although Davis may seem to be struggling at Sainsbury's, the chain has been steadily losing ground to Tesco for a decade. If the people already within the company were so great, they wouldn't have surrendered leadership of the British grocery trade.

Specialists tend to take over companies that are doing well. Generalists usually get given the task of turning around companies that have been doing badly - and that is a much tougher trick to pull off. Maybe that explains why so many generalists are getting the top jobs: with the bursting of the tech bubble followed by a global downturn, lots of companies are in trouble. And they are turning to outsiders to help get them out of it. l

< HOPPERS 1. ALLAN LEIGHTON, CHAIRMAN, ROYAL MAIL, BHS ETC 2. ADAM CROZIER, CEO, ROYAL MAIL 3. SIR PETER DAVIS, CEO, J SAINSBURY 4. GERRY ROBINSON, CHAIRMAN, ALLIED DOMECQ 5. ERIC NICOLI, CHAIRMAN, EMI THE LIFERS HAVE THE EDGE MOST ADMIRED COMPANIES AND THEIR BOSSES LENGTH OF STAY 1 BP Lord Browne CEO 37yrs 2 Cadbury Schweppes John Sunderland CEO 35 3 Tesco Sir Terry Leahy CEO 24 4 Unilever Sir Niall Fitzgerald chairman 36 5 GlaxoSmithKline JP Garnier CEO 13 6 Shell Sir Philip Watts chairman 34 7 Next Simon Wolfson CEO 12 8 Diageo Paul Walsh CEO 21 9 BAA Mike Clasper CEO 2 10 Morrison Sir Ken Morrison chairman 51 11 Capita Rod Aldridge CEO 16 12 AstraZeneca Sir Tom McKillop CEO 34 13 Selfridges Peter Williams CEO 12 14 Exel John Allan CEO 9 15 Canary Wharf George Iacobescu CEO 16 16 Cobham Gordon Page chairman 13 17 HSBC Sir John Bond chairman 42 18 Rio Tinto Sir Robert Wilson chairman 33 19 Hilton Group David Michels CEO 12 20 Barclays Matt Barrett CEO 4 SOURCE: BRITAIN'S MOST ADMIRED COMPANIES 2002 (MT) LIFERS 1. JOHN SUNDERLAND, CEO, CADBURY SCHWEPPES 2. LINDSAY OWEN-JONES, CEO, L'OREAL 3. JEAN-PIERRE GARNIER, CEO, GLAXOSMITHKLINE 4. LORD BROWNE, CEO, BP 5. SIR TERRY LEAHY, CEO, TESCO

A HEADHUNTER WEIGHS THE ISSUES

One reason why sector-lifers are coming out on top might be that the headhunters, who have a crucial role in arranging most appointments at or just below board level, have a fixed idea of what they are looking for. If they want someone to run Big Mobile Telecoms Ltd, what they want is a 40-something divisional director of Rival Big Mobiles Ltd. Headhunters are not known for their imagination.

Jonathan Dancy, UK managing director of headhunting firm AT Kearney, argues that it is the balance of the board that matters most of all. 'At the operating level, I think it depends on the business whether you need to have a specialist or a generalist in charge. If it is a very technical business, then it matters a lot to have at least someone on the board who understands exactly how it operates. But that doesn't have to be the chief executive. He or she can be someone who just has good business skills.'

Dancy reckons the choice of whether to appoint a generalist or a specialist often revolves around what a company needs at that stage of its development - and what kind of business it is in. 'It makes a big difference what kind of company it is,' he says. 'For example, if it was a retailer, you might be nervous of putting in someone with a background in accounting and who had just acquired an MBA, no matter how good they were, because they might not understand the creative side of the business.'

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