IN MY OPINION: Institute of Management companion Charles Allen, executive chairman of Granada Media, explains the rules by which he plays, and wins, the business game

IN MY OPINION: Institute of Management companion Charles Allen, executive chairman of Granada Media, explains the rules by which he plays, and wins, the business game - A few years ago, no chief executive's office bookcase seemed complete without a well-t

Last Updated: 31 Aug 2010

A few years ago, no chief executive's office bookcase seemed complete without a well-thumbed copy of Chinese military historian Sun Tzu's The Art of War. Some businessmen saw themselves as generals waging a campaign against the competition, fighting on the beaches for market share. Business was war - kill or be killed, win/lose, no prisoners taken.

My management philosophy has always been slightly different. For me, business is less like war and more like a game. Like in any game, success in business presupposes four indispensable elements: objectives, rules, strategy and enthusiasm.

Defining success is probably the most important job for any leader. We've always sought to be transparent about the objectives we set ourselves at Granada, which have been constant since I joined the company. First comes the commitment to delivering quality service for all our customers.

In ITV we have the dual challenge of simultaneously satisfying both advertisers and audiences. As we move into new broadband markets we are also witnessing the transformation of passive viewers into interactive consumers, who will place even higher demands on service deliverers.

A second objective is to ensure that we achieve consistent quality earnings from all our businesses. We don't want any of our businesses to be on cruise control. High earnings should not be an excuse for complacency but the launch pad for further growth. Similarly, acquisitions must always be justified by the earnings improvements that they will yield. There's no point diluting earnings in pursuit of growth for its own sake.

Market leadership is another core objective. Today more than ever, no business can afford to follow the pack. First mover advantage is higher than ever. Granada seeks to lead in all the markets in which it operates. We've led the way in UK television, realising early on that, where content is king, content creation is the jewel in the crown.

That's why we've built the biggest commercial television production business in Europe from a single ITV franchise six years ago.

But the final objective - the Holy Grail - is to continuously improve shareholders' returns. We are custodians of our shareholders' money. They pay our wages and invest in our success.

The rules of business success are deceptively simple: people, value and control - PVC.

The golden rule is to employ only the best people. To attract, retain and get the most from them, you must empower them. Giving managers responsibility goes with keeping management structures simple. Each one should know their role, responsibilities and objectives. Over-complicated management structures give mediocrity a place to hide - and risk letting the best talent go missing.

Creating real value requires a commitment to quality across the business.

From this commitment to value flows the approach to sales and pricing.

Only if you are confident of the value your product represents will you be prepared to market it aggressively and demand the price that you know it is worth.

Rule C is control in all its senses. A good manager should be given control and responsibility - but should also be prepared to demonstrate that they are delivering. At Granada we run a rigorous reporting process with operational reviews of all our businesses on a monthly basis. Control must extend to ensuring that every business is run to optimum efficiency.

It is not enough just to follow the rules. You need a strategy. Across Granada we conduct a rolling strategic review of the markets we're in and where we need to focus in future. It produces a strategic outlook that has served us well in making big decisions, like our investmentment in digital terrestrial television via ONdigital or our recent acquisition of United Broadcasting and Entertainment.

At the heart of any successful commercial strategy are those three letters again - PVC. In this instance they refer to that eternal triangle: price, volume and cost. The mix between the three determines the market you're in and the way to win. Granada seeks to be a master of all the permutations.

In our TV production business, Granada ranges from lavish one-offs, like Longitude for Channel 4, through to the low-cost, high-volume output of our innovative production unit, The Lab. In broadcasting, we're active in free-to-air and pay-TV, on all broadcast platforms, with their very different economic parameters.

Finally, any game requires enthusiasm. Team spirit is a precious commodity in business. It is built on a shared commitment to common objectives.

It requires managers to inspire their team, but also to trust them to do their job. Reinforcing the will to win means celebrating and rewarding successes. It's the challenge and the enjoyment that get you out of the bed in the morning - not thoughts of yield curves and percentages. Across Granada we try to ensure that passion for business extends from the boardroom to the studios.

But don't let talk of business being an enjoyable game mislead you into thinking we take our business lightly. Games are important. As Bill Shankley, manager of Liverpool FC, in which Granada has a stake, said: 'A game of football is not a matter of life and death - it's far more important than that.'

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