UK: Smith takes a risk on his ship coming in at ABP.

UK: Smith takes a risk on his ship coming in at ABP. - The City reckons Britain's biggest port operator isn't pulling its weight. New managing director Andrew Smith is betting his job, says Joe Alexander, that he can come up with the answers.

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Last Updated: 31 Aug 2010

The City reckons Britain's biggest port operator isn't pulling its weight. New managing director Andrew Smith is betting his job, says Joe Alexander, that he can come up with the answers.

No one can accuse Andrew Smith, Associated British Ports' new managing director, of shirking a challenge. He joined the UK's biggest ports operator just as the City ran out of patience with it. And he took on the big job - its all-important strategic review.

If he gets it right, 47-year-old Smith will become the natural successor to executive chairman Sir Keith Stuart. Indeed, Stuart may even find himself under pressure to move upstairs. If Smith fails, he will probably be fired - 'I would expect to be, but I don't expect to be,' he says with a Delphic smile.

ABP's recent history is an object lesson in how the City falls out of love with a basically sound company. The firm outperformed the market handsomely coming out of the recession, but since 1995 has lost all those gains and more. Stuart's claim that ABP is a growth stock has lost its ring of confidence. The City focuses on its poor return on capital and its ageing board, headed by Stuart since 1982.

Appointing Smith is an implicit admission that the City isn't all wrong.

'Sir Keith suggested the company needed an outside stimulus, someone with fresh ideas,' says Smith, who arrived via Redland Bricks, Inchcape and P&O Containers. His appointment surprised observers. 'It's unlike ABP to go outside the company,' says a director of a major UK port.

He calls his style 'open and participative'. But when prompted by his PR to add 'democratic', he recoils. 'There's a difference between creating an atmosphere where people can tell you what they really believe without fear and being democratic.' A benign dictator, then? 'I nearly said that, but didn't,' he laughs.

Smith is only uncomfortable when asked about his review. Due to be completed early next year, it covers four issues crucial to ABP's future: increasing revenues from existing customers; adding new customers; expanding activities; and whether to expand abroad. 'The main theme is to identify where we truly make money,' he says.

Smith is more open on how he can change the way ABP thinks. He believes that the way in which strategy is derived is an indication of how it will be implemented. 'The important thing is to get people to stick their necks out.' He quotes from Kenichi Ohmae's book, The Mind of the Strategist.

Ohmae's prescription for introducing new life is 'always to confront what is taken for granted ... ask why ... repeatedly and insistently'.

'Andrew is ballsy and risk-taking without being stupid,' says Ewan Adamson, personnel director at Blue Circle, who knows Smith from Redland Bricks.

'But he's not to everyone's taste. He gets round all the plants and the men love him. But some middle managers are wary.'

Smith is no stranger to ports. P&O sent him to run the Shuwaikh container terminal in Kuwait. For Inchcape, he set up a joint-venture trucking operation with the Port of Shanghai just after China opened its doors to foreign investment. To help the negotiations, he learnt Mandarin, now apparently often on show in Chinese restaurants in certain coastal towns.

It's ironic that his biggest test comes with his return to shipping.

He joined Redland in 1992 as managing director of its bricks division, because he 'wanted to get out of shipping. I wanted to demonstrate that I could do something completely different'. He lost his job last August when Redland sold out of bricks.

But he'll enjoy the pressure. 'One thing about Andrew - he's fairly vain,' says Adamson. 'He likes the spotlight.'

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