THE ANDREW DAVIDSON INTERVIEW: Sir Roy Gardner, Centrica and Manchester United

THE ANDREW DAVIDSON INTERVIEW: Sir Roy Gardner, Centrica and Manchester United - CEO of the motley conglomerate Centrica, chairman of Manchester United and the mover behind several Government initiatives ... he's a quietly busy man with a very private life and an unfeasibly large spread of duties. What's the big idea?

by Andrew Davidson
Last Updated: 31 Aug 2010

CEO of the motley conglomerate Centrica, chairman of Manchester United and the mover behind several Government initiatives ... he's a quietly busy man with a very private life and an unfeasibly large spread of duties. What's the big idea?

Sir Roy Gardner, chief executive of Centrica and chairman of Manchester United, is probably what you'd call adaptable. When he was young, he wanted to be a footballer - 'left or right winger, didn't care which side I played' - but settled for a traineeship at British Aircraft Corporation because they had a great works team. Years later, he wanted to be Arnold Weinstock's successor at GEC but decided he'd never be picked over Arnold's son, so he simply took his ball elsewhere.

It paid off. Gardner is now one of the most influential executives in British business, a favourite of the Treasury and the third sector - chair of a new initiative to encourage apprenticeships, president of Carers UK, chairman of the Employers' Forum on Disability. And, like all adaptable people, he has proved to be a fast learner.

Weinstock told him 'Never to let go of the details', and he never has. Cedric Brown at British Gas, his next port of call after GEC, showed him what happens if you lose control of press presentation. And that, I would guess, has influenced his motivation on being seen to put something back, and on not being seen much at all.

A contradiction in terms? If Gardner is bothered, he doesn't show it. A quietly shy, considerate man sitting in a small, plain office off London's glitzy Bond Street, he has so few airs and graces you could as easily mistake him for a middle manager passing through the building rather than the boss of one of the country's largest firms. Aged 57, medium-height, balding, compact, carrying that neckless, once-muscular chunkiness that many former sportsmen spread into, he puts so little of himself out on first meeting, a small smile here, a soft reply there, that it's almost puzzling.

Except that's his style, always a little held in reserve. Some find the low-key lack of charisma rather off-putting - he trained as an accountant, what else can you expect? they ask. Others like him a lot. To find the real Gardner, they say, you have to dig a bit deeper and note the plain but beautifully made suits, the obsession with the finest wines, the fact that he has a red Ferrari in his garage and is only comfortable revealing as much to those he trusts.

What's intriguing is that, for such a guarded man, he has built at Centrica a group of companies strung together with a pretty audacious proposition. Originally an energy firm spun out of the old British Gas, Centrica, with a 2002 turnover of pounds 14.3 billion, doesn't just sell gas and electricity under the British Gas brand but now also owns the AA roadside assistance service and Goldfish financial services and One.Tel telecommunications. Why?

Gardner argues it as follows: Centrica's strength was supplying through British Gas a quality service to a large volume of domestic customers, so what else could it cross-sell? What are the problems consumers face? The home, the car, the phone ...

It's not that illogical, he says. 'We looked at the AA in relation to our own service business at British Gas, and both are really about the deployment of mobile fleets of engineers - some attend the customer at home and others at the roadside - with lots of back-office synergy.' And likewise financial services and telecoms.

'There is a common theme behind everything we do,' he adds. 'We don't supply a service the customer doesn't want, and we haven't done anything that we didn't believe would create shareholder value, and that will continue to be the case.' He talks sparingly, occasionally leaving phrases hanging - friends joke they often have to finish his sentences for him. Even they admit that communication is not his strongest talent.

Perhaps because of this, not everyone is convinced by Gardner's vision for Centrica. Despite consistently good headline financial results - including a 54% increase in pre-tax profits for 2002 - many City analysts are cautious about Centrica's prospects, in particular its aim to grow quickly in America's energy market. The shares fell to 150p in February, equalling a three-year low. At that price, quite a few Centrica shareholders might ask if he should be chairing the biggest football club in the world too, but he brushes the queries aside. In fact, he doesn't really want to talk about anything at Man U. Alex Ferguson's miskick into David Beckham's face? Martin Edwards' enforced resignation from the board last year after lurid allegations about his private life? (Reputedly, Gardner offered him two envelopes, one his resignation letter, the other his dismissal from the board; Edwards chose the former.)

No comment. What he will say is that he dropped other non-executive commitments to make space for Man U, and the Old Trafford job takes up less time than people think, as he tends not to follow the Reds slavishly mid-week. But even if there were loud demands that he concentrate on Centrica alone, you suspect he wouldn't listen. Alongside being a fast learner, resilient self-belief is another Gardner quality that always surprises those on first encounter. Never mistake his shyness for temerity, counsels one.

That self-belief had to be forged young. Born the eldest son of a carpenter, Gardner watched his dad move through a succession of jobs - pub manager, works engineer - on the Surrey and Middlesex fringes of London. He didn't have an easy relationship with his father and makes it pretty plain in interview that he owes him little. 'My parents were not as ambitious for me as I would have liked,' he says softly, 'but then, they had their own difficulties in life. There was no money about, and we were always struggling financially.'

So the young Gardner got used to pushing himself hard to make up the gap. As a teenager, he took on paper rounds and worked double shifts at the local bacon factory, wrapping Walls' finest. 'I was just so keen to work and earn money,' he says.

It taught him a salient lesson: he didn't want to do that kind of job for the rest of his life. What he really wanted to be was a professional footballer, but he didn't make the grade - thankfully, he says, as he is 'the wrong generation', and would never have made the millions today's stars earn. He knuckled down to academic work, joined the accounting apprentice scheme at the local British Aircraft Corporation (later BAe), where his father had an engineering job, and started working his way through the ranks.

'I never made a conscious decision to be an accountant,' he says, 'it was just a decent job with career development opportunities.' And a great works soccer team. University was never an option for him, nor for his brother (now a civil engineer), nor his sister, who works in training for Tesco. Why? 'Our parents could have taken more interest in our career opportunities - I was fending for myself.' It's a sense of self-reliance that has never left him.

He joined the aircraft industry at a time of upheaval: fighter plane contracts being cancelled, Concorde production coming on-stream, operations merging to form a new commercial aircraft division. The young Gardner was pitched in at the deep end. 'I can remember as a very young man I had to tell people of 60 they were being made redundant. I knew only too well why they had to go, it was right for them to go, but it was a hard task. That was a good starting place ... I learnt how to cope with the process of change, and that helped me in later life.'

He worked on the Concorde project, then was headhunted to Marconi Space and Defence, a GEC subsidiary. 'That was really enjoyable. We were the fastest-growing bit of the Marconi group, and because of the way the management team performed we were all progressed and became directors of the Marconi group.'

His career shot off: from chief accountant to assistant finance director to finance director of MSD to group finance director.

He learnt a lot from his immediate boss Arthur Walsh - 'A very clinical approach to analysing problems, going through issues in detail to understand all aspects' - and even more from GEC boss Weinstock. 'I really liked Arnold, I had the highest regard for him.'

The attraction was mutual, with Weinstock marking Gardner out for rapid promotion. It was not without turbulence: Gardner left with Walsh to run STC then returned. But many of the management habits he learnt from Weinstock have stuck. Such as? 'He always said to me, never lose touch with the detail, always understand in detail what is going on inside your companies.'

That involves more than just regular management reporting but also watching the little things. When I ask Gardner to cite examples, he says, well, two items he keeps an eye on are passes to buildings, and overseas travel.

'I know who is going where and what they are going for. That way I get an early warning if things are going wrong. If I saw a lot of people going to the same overseas business I would want to know why, if there is a particular issue there. With building passes, I can see whether, for example, consultants are being brought in. I am not too keen on employing them - we should have those skills in-house.'

It seems extraordinary that the pounds 850,000-a-year CEO should study building passes, but it doesn't surprise those who've worked with him. Ken Gardener, ex-STC and British Gas, now a senior adviser to HSBC and one of Gardner's closest friends, says the Centrica boss is unusual in that he's a cautious manager who likes his checks and balances, but mixes that with drive and ambition. 'Roy is quiet and unassuming but very committed and competitive too, and he has that real confidence in his own judgment.'

Bernard Taylor, vice-chairman at JP Morgan, who has known Gardner since his STC days, says he is a great team builder and motivator too. 'He's not autocratic, he listens and is very measured.'

Like many who have had tough childhoods, he is initially hard to get to know, adds Ken Gardener, but once won over, a friend for life.

Others have not warmed so readily, especially those pitted against him on his way up companies like STC and Marconi, where the GEC habit of playing tyro executives off against each other could foster enmities. Sir Peter Bonfield, ex-ICL (part of STC) and until recently boss of BT, is just one reputed to have had cool relations with the Centrica boss. Gardner too, you suspect, is not one to overlook a slight. Recalling how the banks nearly pulled the plug on the ailing STC when he and Walsh moved in, he says he never forgot their behaviour, or their names. He never did business with them again.

He went back to GEC's Marconi after STC was sold to Northern Telecom, worked hard for two years, but decided not to stay. 'What I really wanted was beyond my reach, which was to succeed Arnold. He made it clear to me he was giving that task to his son Simon.' He was pretty sure too that Simon Weinstock didn't even want it. Doubly galling? Gardner shrugs slowly.

Is he sad at what's happened to Marconi since? He pauses. 'I have to be careful about this. In my opinion, GEC made the wrong decision to sell off Marconi. And I cannot believe that the GEC controls were installed there; they started doing deals for the sake of deals without doing adequate due diligence, deals that had been rejected by other parties ... I think a number of them took their eye off the ball, but that's just my personal opinion.'

Headhunters offered him three ways out of GEC: CEO of another large electronics company - 'I couldn't do that to Arnold'; CEO of a telecoms firm; or a position on the board of the newly privatised British Gas. He plumped for British Gas. 'I decided that if I was going to make a change, I'd do something completely different.'

It was a brave leap, though Gardner admits he was lured mainly by the discreet promises offered by chairman Dick Giordano.

Which were? 'I believed there was an opportunity for me to end up running it - they couldn't promise it to me, but all you need to know is that there is a possibility ...' And Gardner smiles.

First he had to watch Brown being roasted by the press for his salary package. Whose fault? British Gas's, says Gardner. 'It was so naively handled, and Cedric didn't deserve it ... But he didn't make it easier for himself, and there were ways in which the changes in structure of remuneration could have been handled without getting media attention. It didn't affect the way I worked, but I knew there and then that I had to build a relationship with the media.'

Gardner now works hard at it, making himself accessible when he has to, putting in that public-sector service, sending nice hand-written notes after meetings (I received one straight after our interview and, I have to say, appreciated it), but it doesn't, I would guess, come naturally.

He is not, for instance, the kind of boss who is available to all staff at all hours.

He helped carve up British Gas, devising the logic of its split into two entities, BG and Centrica. He was given the choice of which he wanted to head. 'I never had any doubts, I said I would take the business with the problems.' Those problems included massive take-or-pay contracts, where British Gas had committed long-term to buy gas at prices well above market rates. It took a year to renegotiate the contracts, a feat that transformed the fortunes of the company.

Ken Gardener, who worked as chief negotiator for his old friend, says in the end the oil companies realised that it was in their long-term interest not to damage a good customer.

Even before that, Gardner had been busy building his own senior executive team from scratch. 'When I was asked who I wanted to take with me, I said no-one, because it was going to be a different mentality and mindset. British Gas was highly bureaucratic. That isn't my style.'

Putting together that team was one of the most enjoyable aspects of building Centrica, he says. 'And I think I got it right. Well, I know I got it right, as most of them are still with me.'

He then embarked on shaping the new vision for the company. His vision? Some cannot square the proposition with the man himself - 'Roy's not a conceptual thinker,' says one puzzled former colleague - but Gardner is passionate about the level of service he provides to his customers, often following up complaints himself, and he clearly believes instinctively there should be huge opportunities for cross-selling.

He's put customer service targets in executive remuneration bonuses, he says, he's developed that into customer and employee satisfaction targets 'because the latter drives the former', he's thrown himself into his charity work with carers and the disabled because 'it's really important we understand all groups of people, whether customers or staff'. It hasn't stopped him getting a rough ride from energy watchdogs, who have consistently accused Centrica's British Gas arm of overcharging, yet Gardner is adamant the pricing is fair, and that the cross-selling strategy will pay off.

But Gardner is also adamant that the drive is making Centrica a better company to work for. He got involved with carers, he says, because he was upset by an incident he uncovered at Centrica. An employee had been denied time off to look after his sick son in hospital. The man got increasingly desperate but the company wouldn't budge. Then his son died. 'And when I found out about it I was really distressed,' says Gardner.

Yet if managers won't give time off for compassionate leave, isn't that because of the tone set by those at the top? Gardner shakes his head. 'There is pressure on managers over performance, but you need to be more understanding and caring of the difficulties staff have.'

Since then, he says, the company has developed carer-friendly employment policies. Likewise his commitment that Centrica will offer work to the disabled, which came out of his involvement in the Government's New Deal programme. Centrica has hired more than 200 long-term unemployed, many of whom are disabled.

'We were one of the first companies to develop a programme to recruit the long-term unemployed,' he says. 'We need good, dedicated, loyal people. It was good for everybody: good for us, as there was a business case and a need to do it, and it's been very successful for the people who have joined. They have worked really hard and stayed with us.'

You can tell he's quietly proud of what's been achieved. Even if cynics might point to the lessons Gardner learnt watching Brown get mauled, there is no denying that his example is one many other corporate chiefs could usefully follow. He's now helping the Government again by pulling in views on boosting apprentice schemes in industry. Not bad for a self-confessed Conservative? He looks sheepish. 'You work with whoever is in government,' he shrugs.

How does he relax? Watching football, of course, and keeping fit. He used to run marathons but cannot now, he says, because of a nagging foot injury. How does he spend his money? He only has one house, a former farm in the countryside near St Albans, so it's mainly on good wine - he has a thermostatically controlled cellar - great food and nice holidays. (He is particularly partial to the Costa Smeralda in Sardinia, going to the same hotel year after year). Friends add that his lifestyle is as quiet as his nature: he loves crosswords and is an obsessive family man.

His Achilles heel? Two of his three children work for Centrica, a son trading energy and a daughter at - a fact that raises eyebrows among some: plcs are not the place to establish dynasties. Another daughter is a textile designer and works in a new business set up by his wife selling flowers and 'lifestyle items'.

Wife Carol, to whom he's been married since BAe days, is the key influence on Gardner. 'She keeps their feet on the ground,' says one. Gardner is allowed no airs and graces; he even, it is said, does the family shopping at Waitrose on a Friday - not many FTSE bosses can claim that.

Can he convince the City to love Centrica? Some old colleagues think he should do more communicating himself and leave less to his team. But that's not his style; he likes the team to be involved and he clearly prefers plotting the future. He has a lorryload of commercial potential to unleash at Man U too. He talks about 53 million fans worldwide, converting them into customers - those cross-selling possibilities again. It's frightening.

And how did he, a good Surrey boy, end up a diehard Red? He chuckles. 'I just opened the paper aged eight and there was this amazing team and I've supported them ever since.'

The wry smile widens, revealing just a little bit more than usual. If his team win anything at the end of this season, his first full season as chairman, you can imagine it will be vintage champagne all round, back at the Gardner ranch. But I don't suppose we'll be hearing much about it.

< gardner="" in="" a="" minute="" 1945:="" born="" 20="" august.="" educated="" strodes="" school,="" egham,="" surrey="" 1963:="" accounts="" trainee,="" british="" aircraft="" corporation="" 1975:="" chief="" accountant,="" marconi="" space="" and="" defence="" systems="" 1979:="" group="" finance="" director,="" marconi="" 1986:="" finance="" director,="" stc="" 1987:="" managing="" director,="" stc="" communications="" systems="" 1991:="" chief="" operating="" officer,="" northern="" telecoms="" europe="" 1992:="" managing="" director,="" gec="" marconi="" 1994:="" executive="" director,="" finance,="" british="" gas="" 1997:="" chief="" executive,="" centrica="" gardner="" is="" also="" president="" of="" carers="" uk="" (since="" '98);="" chairman="" of="" the="" employers'="" forum="" on="" disability="" (since="" 2000),="" of="" manchester="" united="" plc="" (since="" '02)="" and="" of="" ambition="" energy,="" part="" of="" the="" government's="" new="" deal="" programme;="" and="" head="" of="" a="" government="" task="" force="" set="" up="" to="" promote="" the="" modern="" apprenticeship="" scheme.="">

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