MT Interview - Allan Leighton

Having safely delivered Asda into the hands of Wal-Mart, he famously quit the top job at the superstore to ‘go plural’.

by Chris Blackhurst
Last Updated: 31 Aug 2010

The meeting room in Selfridges' head office is quiet. Outside, there's the din of delivery vans coming and going from the store, workers chatting on their fag break, drinkers having a late-afternoon pint at the pub on the corner. In here, there's silence.

A few grainy pictures of Selfridges in Edwardian times, of people promenading on Oxford Street and in the shop's roof garden adorn the walls; otherwise, the decor is plain. The place is soulless. Then, the door is flung open and in strides Allan Leighton. Suddenly, the space is as busy and noisy as the street below. He catapults into the chair, his long limbs stretching out to the sides. His head is shaved and burned by the sun. He looks fit and lean – more ageing footballer than businessman in his early fifties.

He bristles with energy and purpose, already keeping a beady eye on his watch. Everything about him says fast and furious: his sparse physique; his body language; his dress of checked shirt, no tie, playful Union Jack cuff-links; and his speech. It's as if he's wired. Top boss on speed – that's Allan Leighton.

I remind him he's having his photo taken after we're done. 'I hate bloody photographers,' he says, flinging his head back, his hooded eyes twinkling. His humour is self-deprecating – he and I know he's been photographed countless times and always gives a good picture.

He looks around. 'Yeah, you see these pictures,' he says, pointing. 'That's what we want to do, to make it how it was. We're going to put the garden back.'

Somewhere, you know there's a list. On it will be the words 'Selfridges roof'. Alongside it will be a multitude of other must-do items and reminders for Leighton's job as a director of Selfridges, and his other posts – as chairman of the Royal Mail and board member of Bhs and BSkyB. Until recently, the schedule would have been even longer, including the chairs of and Cannons gyms, and a direc- torship of Dyson. Further back, it would have included references to Leeds United Football Club, Wilson Connolly and Scottish Power, which he also helped run.

Leighton is a one-man phenomenon. He is everything to everybody: the boy who went to a smart direct-grant school and from there to a polytechnic, and later to Harvard Business School; the boss who is just as at home talking to postmen as he is talking to the Weston family, which owns Selfridges, or the clever trendies who run lastminute, or City bankers, Cabinet ministers and members of the House of Lords.

His reputation is as an arch-moderniser, a cutter of crap, no respecter of old methods and fancy titles. Yet he was also a morris dancer and liked a bit of bell-ringing in the past. His image is that of macho man, of a rebel who wears a trademark gun-slinger leather coat, but he can do conservative and traditional just as well as anyone when it suits him. He can be as aggressive as his mate, Philip Green, but he can be a hip, self-improving New Ager as well ('Follow your bliss' is the sort of simple Leighton saying that has colleagues nodding in agreement and, later, scratching their heads in bafflement).

He's inordinately proud of Selfridges and its transformation from dull department store into hip retail destination, but here he is, gazing at faded black-and-white prints and wondering how best to reproduce the scenes they show.

So, how does he do it? Some managers struggle to hold down one post, while Leighton, the ultimate juggler of appointments, does several and with aplomb. How?

'I never think of it as multi-tasking. I've got different jobs to do in the organisations I work for. The fact is, the portfolio I have ranges from private company to listed to publicly owned. That helps. The other thing is that where I'm chairman, I get good people to run them. If you get good CEOs, you get good executives, who get good people beneath them. It really is that simple – and true.' Warming to his theme, he adds: 'In leadership, the most important decisions you make are to get the right people. If they are right, everything else falls into place.'

He never set out to be this way. It just evolved. 'Bizarrely, considering where I now find myself, I've worked for two companies virtually all my working life. I was with Mars for 18 years and Asda for 10. I never thought I'd leave the first, never mind the second. It happened by default – I decided one day I didn't want to be CEO of Asda any more. I had this idea of working less and maybe doing two or three different things instead of one. I had to explain to the press, though, that I hadn't been fired – that was terribly important – so I said I was "going plural". It was the first thing that came into my head.' The phrase has since taken off.

'All the basic skills I learned at Mars,' he says. He grew up in Oxford, the son of a Co-op manager. He went to Magdalen College School – now one of the poshest establishments in the city, then not quite so, but still a lot better than the secondary mod. He harboured dreams of being a professional footballer, but then at 15 he broke his leg in six places and his hopes were over. After school, he stayed local, going to North Oxford Poly. His first job was with Lloyds Bank. But he left that for Mars, along the Thames corridor in Slough.

He was attracted to the chocolate and pet foods combine by its training programme. He was moved round the company, gaining experience at various sites and in a variety of posts. 'It didn't matter if you did the job well. The idea was to learn how to do the job and to understand the company. I was trained in a very structured way and to do real things, like how to run a meeting, for instance. We were taught to run meetings, to read a p&l, and how to communicate – really useful, important things.'

It helped that Mars was 'a private company with very strong values. The brothers [the owning family] were brilliant and mad in many ways. The people who worked for them and their brands were the only things that counted. They realised that you have a better chance of winning if you get the best people, so they paid a bit more than anyone else. They also knew how to get the best out of people, so they would pay 10% more if you clocked in before 8.30am. Everybody would do it, even the MD. It was very strange and is probably why I'm such an early bird still.'

He rises at his Amersham home where he lives with his wife Anne – they have three grown up children – at 6am, starts work at 6.30, runs four or five times a week, eschews the London party circuit as much as possible and is normally reading a novel in bed at 10pm. 'If you snooze, you lose' is a Leighton motto.

He recounts a tale of how when he took over as the man-of-the-people, tell 'em how it is chairman of the Royal Mail, he asked to see an organisational chart. 'I like to see what everyone does. But at the Royal Mail loads of people had the word 'strategy' in their job title. It was very important they got it in because they qualified for more Hay Points and got paid more. There we were, losing £1 million a day because we had the wrong strategy – yet we had strategy this and strategy that. I scrapped them.'

At Mars, he became the youngest director in the company worldwide. Around him were some of the names who went on to run major firms: Justin King, David Cheeseright, Richard Baker and others. 'We talk to each other all the time.' He laughs. 'Now that we've become the Establishment everybody should be worried.'

He loved Mars, adored the fact that everything was so competitive and decisions were executed at speed. It was his sort of place, a private company able to run at pace. Then he says: 'I got a call about Asda.'

He'd watched with interest the rise of the Leeds-based Associated Dairies. 'I saw how good it had been. It's forgotten now, but Asda created the superstore business in the UK.' And he'd observed its decline. 'They'd come south, they'd not thought things through, they'd gone into other areas like Gateway and MFI, they'd got away from their roots.'

Asda had recruited a new CEO, Archie Norman, from Kingfisher, and wanted Leighton as his right-hand man. Ready for the change, he moved north. What he found was a mess, and not one that could be cured overnight.

Asda was a steep learning curve. At Mars, Leighton had done many things, but not selling. He took to it straight away. 'I liked its immediacy. I could go into a store and move something and know within 20 minutes whether it would work or not. I really like that. It's great, knowing how well you did yesterday. At Mars, everything was in the pipeline. Here, you got paid cash and it was in the till today.'

Far better, though, he says, to have taken charge of a business in trouble than one doing well. 'We had three years where there was no money to open new stores. It was a good discipline – we'd got to concentrate on the products and the people, we had to be retailers.

'People forget, it took 10 years to turn round Asda. I've been at the Royal Mail just three years and we've gone from losing £300 million to making £500 million, and I get criticised for not going fast enough.'

When he arrived at the Royal Mail, even though its management had a large retailing operation, they didn't share Leighton's grasp of its beauty. They were soon made to. 'I couldn't believe it. I asked them: "When do you get today's sales figures?" They said: "Three weeks after the end of the month." I said: "Let's get this right: you're telling me you won't know the figures for today for seven weeks?" They said: "That's right." Can you believe it? Seven weeks! Now, they know the volumes on a daily basis, and they're right on top of all the numbers.'

How did he and Norman turn round Asda? Here comes a Leightonism that surely goes down well in board meetings. 'Every great failure was once a great success. Faced with that, you should always go back and say: why did it work, how did it become great?'

The key had been giving customers what they wanted – low prices. 'Asda Price worked brilliantly so it wasn't difficult – we put it back.' He put himself in the place of staff and customers – 'winning hearts and minds' he calls it. At the Royal Mail, he talked to posties about how their lot could be improved – how they could work better – and they told him they could do with proper shoes, not the cheap plastic ones they were issued with, so he made sure they got them.

Working with ordinary people had taught him the need to avoid jargon. 'I can't stand it. Jargon is talking at people; Sun-speak is talking with people.'

He spoke to Royal Mail users and found they hated the new corporate name of Consignia, so he consigned it to the bin, literally, and went back to the brand they understood: Royal Mail. At Asda, he'd wandered around stores, with a sticky label bearing the words 'Allan, Happy to Help'. Staff and customers told him all sorts of things they found irritating and could be improved, and how fixing it would win their loyalty – from wonky trollies to bad signing to wrong prices. The devil was in the detail, but that detail came from the only constituency that mattered.

He believes in peeling back layers of management to reach the basics – what does the company actually do, how can it be done better? At Royal Mail he found an organisation that hadn't a clue what it was or where it was heading. He instructed staff: 'It's straightforward. We collect mail, we sort mail, we deliver mail and we retail. That's our strategy. Don't talk to me about anything that isn't to do with any of those four things.'

Businesses always decline, he maintains, for the same reasons. 'One, their people lose focus; two, they get complacent. Generally, they deteriorate at a slow pace. You go down slowly and everyone is convinced everything is still okay, then, suddenly, you've hit the floor.'

His style, he insists, is not to punish errors but to give people their due, to motivate them to learn and to move on. 'I get beaten up by some colleagues because I say that if you're very good you are right two-thirds of the time. You can make mistakes. The trick is to rectify them quickly. That way, you can still win in the end.'

In meetings, he encourages real debate. 'Then I say: "Right, you've all had your say. This is what we're going to do. Are you up for it?" And they all say yes. It's important to get everybody to debate. They don't have to agree, but they need to debate. I won't have meetings where the big decisions are taken by everybody...' He beams. 'I'm always worried when everybody thinks something is the right thing to do.'

He spent four of his 10 years at Asda as chief executive. 'Then the number two player was sold to Wal-Mart.' Kingfisher was in the bidding, but at the last minute the superstore group went to the US giant. Although there was shock – Sir Geoff Mulcahy, Kingfisher boss at the time, hasn't spoken to Leighton since – he says it shouldn't have been such a surprise. 'Listen, I knew [the Wal-Mart people] – John Walton had even been to my house. We'd been copying them for two years. I'd been out to Bentonville [Wal-Mart's base] and watched what they did.'

He would go to the US regularly and wander around Wal-Mart stores, noting all their tried-and-tested techniques. On one trip, he was stopped by a store manager from taking pictures. The manager phoned head office and Bentonville asked to see him. 'Once they had established who I was and where I was from, they were fine. They let me copy all their stuff. Their "Roll-back" offer? We put it straight into Asda.'

The sale, he says, was done in a week. 'It was absolutely the right thing to do. For us, it was like getting the keys to this enormous candy shop called Wal-Mart. They said: "Come and take what you want and use it." They were great to work with.' Norman left to move into politics. Leighton stayed for a year, before deciding it was time to move on. 'I'd always told them I was going to go. We'd put the succession in place – it's part of the test of good leaders that a business should get better when they go, not worse.'

No sooner had he announced he was 'going plural' than that is what happened. 'I'd known PG [Philip Green] for 15 years. He phoned up for a chat and said: "Let's have a go at Bhs." So we did. Then Martha and Brent [Lane Fox and Hoberman from] phoned up and asked if I'd be their chairman. I liked them – they're so bright. Then there was James Dyson. I'd read his book and thought he was a very clever guy. What I really liked was that anyone who worked for Dyson, whether they were in the offices, finance or whatever, had to make a Dyson on day one. I thought that was brilliant and I wrote to him to say so. 'It was like in Asda – everybody had to spend four hours every four weeks working on a checkout. It's the only way of finding out what's going on. At Royal Mail, it's the same – everybody must have been a postman. It's the same for me – postie, parcels, you name it, I've done it.'

There was also Leeds United, a rare spell of failure. 'Terrible. A nightmare. With hindsight, I should have known – in football you have to have success to have success. If you don't, you can't. In the end, in most businesses, you can control their execution. Not football. You can't control what happens on the pitch.'

How does he cope with being plural? 'I'm a great time manager. It's heads, not clocks, that create time-pressure. If I can't do something in one hour, I won't do it. It's true, you know, the first hour of a meeting is the most productive.'

e uses his mobile only to make calls. 'I never switch it on. I want to see who has made the call and then I call them in my own time. That way, I control the conversation and the agenda.' He uses e-mail a lot and replies immediately. 'The only time I feel out of control is when I have a screen full of messages.'

There's no mystique about what he does, he says. 'It's all based on common sense. If it's not, how on earth can it work? If I see something that I like, I copy it. I copy shamelessly. I'm not particularly bright. It doesn't have to be your idea. Look at Roll-back. It was a cracker. It added £1.5 billion of value to Asda – and I saw it on a shelf in Bentonville.'

Contrary to what you imagine, he maintains that running the Royal Mail is good fun. Certainly, he does not look like a man at the end of his tether; he seems to be at ease, laughing and smiling a lot. 'You know, I plucked it out of the sky that we'd make £400 million in three years. I just said it to 250 delivery office managers. Not a single person in the room believed me.'

They achieved it with more than £100 million to spare. Turning it round was not so difficult, he says, when you consider the low base it was starting from. 'Look at the delivery office managers. Some of them had been there 30 years and in that time they'd never seen a member of the board, let alone the chairman. And there I was.'

He's now intent on changing the state organisation's ownership structure, to widen it, to let employees have shares – or as he puts it, 'a share in their success'. There's a mood about the Royal Mail, he maintains, that is new. 'For the first time, people in the company feel we're winning. People are talking about us getting on a roll. It's what happens: people make good decisions and they win, then they make more good decisions and win some more. They get confident. We've got to keep that momentum going.'

Is Royal Mail different from anything else he's encountered? 'Yes, in that everybody in a sense is our shareholder, everybody is our regulator. I want to make it clear, though, that the political pressure on us is zero. When I took the job I had four rules for [Tony] Blair, [Gordon] Brown and [Patricia] Hewitt [the then Trade Secretary]: we run the company, not you; whatever the number is we say we will hit, we will hit it; don't call us, ever; and we won't embarrass you. They all signed up to it.'

One of his more controversial moves was to abandon the second delivery. He can't see what the fuss was about. 'The psychology needed changing. People said: you can't do that, the customer will go mad. I said: hang on a minute, who is the customer? The customer isn't the person receiving the letter but the person who has paid for it to be sent, and they don't mind if it doesn't get there until 2pm.'

He wishes his critics, too, would understand the scale of the operation. 'Today, they're having a go because we lost 15 million items last year. We actually handled 22 billion, so 99.9% were delivered safely. I don't know of any distributor in the world who can deliver 99.9% of anything. Don't get me wrong – any lost item is a huge thing for the person who has lost it. The key for us, though, is that the percentage that is lost is less than last year.'

Time for one last Leightonism: 'Targets don't motivate people; progress motivates people.' He smiles at his own words. Genius. He must wish he got more credit for what he has achieved. The City, he believes, is on his side. 'They know I'm not a bullshit character. In the last 10 to 15 years, at Asda and Royal Mail, I've generated £12 billion to £15 billion of shareholder value. That's not bad.'

The door opens and in comes the photographer. 'You've got 15 minutes,' he says. It sounds like a growl, but he has a grin on his face.

Three challenges facing Leighton

1 To put the Royal Mail on a sounder commercial footing and to introduce a new ownership structure, while keeping staff, government, City and customers sweet.

2 To silence his critics and prove that his talent is as big as his reputation, by taking charge of a major firm and revitalising it.

3 To make a lasting contribution to British corporate life by modernising by example.

Leighton in a minute

1953 Born 12 April. Educated at Magdalen College School, Oxford; North Oxfordshire Polytechnic and Harvard Business School

1974 Clerk, Lloyds Bank, later joining Mars as trainee salesman

1983 Managing director, Mars Ireland

1991 Sales director, Pedigree Petfoods, part of Mars

1992 Marketing director, Asda

1996 Chief executive, Asda

1999 Following Wal-Mart's purchase of Asda, appointed president and CEO of Wal-Mart Europe

2000 Leaves Asda to 'go plural'

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