Q: What makes a great leader?
I think the circumstances mould the individual. For example Margaret Thatcher’s leadership of the Conservative Party started out as a gimmick whipped up by Willie Whitelaw. But she took the opportunity and re-invented herself. You have to be opportunity led, nothing is written in the stars.
Leaders always have to be aware and adapt – to technology, to geopolitics, to the economic circumstances. The willingness to seize the moment and have a go are key. The collapse of the old Soviet Union back in the early 90s was a major shock, but it also created opportunities which have changed the world. Who would have thought that the entire population of Eastern Europe would suddenly become consumers? But that’s what happened, and the people who rose to the occasion then are the billionaires of today.
Lessons from sport are also interesting. Sport teaches you that a team made up of second-rate individuals can put in first-rate performances if it is led well. Equally so, teams made up of stars can have bad days too. It is enthusiasm which makes the difference in sport, and it can do the same in business.
Q: What are the next big leadership challenges likely to be?
Leaders today face a great challenge because of the effective absence of a functioning banking system. The majority of banks in the west either can’t or won’t lend, so companies are forced to deal direct with investors to get funding. FTSE 100 firms have always issued bonds, but now much smaller companies are doing so too. It can be a nightmare when you first have to do it, but after a while you realise that you can do it, and that perhaps you don’t need the bank after all. Firms like BHP Billiton can issue 15 year bonds at 3.2%, that’s a lower interest rate than the banks themselves borrow at.
Q: How do you tackle the challenge of leading businesses on the other side of the world?
You have to be culturally sensitive, you can’t just pretend that it’s like moving from, say, Idaho to Minnesota. You will make mistakes, you are bound to because you can’t know everything about every nation and culture – but you must be humble and apologise when you do. That comes from the CEO, who has always to be ready to apologise when they get it wrong.
Q: How should leaders of smaller firms tackle the growth agenda?
Some people believe that as a firm gets larger, there comes a point when it stops being a small firm and starts being a large one, and that that changes the way it should be led.
I believe something rather different – that you have to keep the same fundamental flexibility, desire to get better bigger and better, and the sense of individual responsibility as you grow. Small companies tend to be more fun to work for, and there is no need to lose that as you expand. If you can hang onto the same enthusiasm you had as a start-up while you grow, then you can really become a competitor to reckon with.
- Peter Earl is the founder and CEO of AIM-listed power generator Rurelec