PATIENCE WHEATCROFT: The human factor - The first lesson for anyone moving into the corporate war zone should be to avoid hasty analysis or, worse still, setting a timetable

PATIENCE WHEATCROFT: The human factor - The first lesson for anyone moving into the corporate war zone should be to avoid hasty analysis or, worse still, setting a timetable - The team is in disarray after a series of poor results. The players' morale is

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

The team is in disarray after a series of poor results. The players' morale is at rock bottom and supporters are deserting in daily increasing numbers. Who'd be fool enough to try to rescue the situation?

In business, as in sport, it seems there is always someone prepared to volunteer for what looks like a nightmare job.

The latest is Rick Haythornthwaite, whose name has stretched the ingenuity of headline writers but whose record has won him a fan club among investors.

This summer he agreed to take on the role of CEO at Invensys, the unhappy combination of Siebe and BTR that had been spiralling down the share ratings.

The engineering and automation group had accumulated massive debts, which left it looking distinctly sickly as recession hit its sales. The subsequent profit warnings were inevitable but nonetheless ill-received in the City.

So it's Haythornthwaite to the rescue. The former CEO of Blue Circle had made it clear that he wanted a challenging new role after he had secured a better price for the cement company than Lafarge had intended paying.

And Invensys is certainly a challenge - a sprawling international group that, after the merger, had no chance to bed down before the downturn in its markets arrived. Allen Yurko, the burly boss of Siebe who assumed the chief exec's role of the newly christened Invensys, refused to be cowed by the clouds of recession and enraged many investors by adding the Dutch software business, Baan, to his empire. This put more demands on a management team that already seemed to be struggling.

In July, with shareholder anger escalating, Yurko bowed out. Chairman Lord Marshall of Knightsbridge, who had presumably espoused the same strategy, remained in the job - but then he always does.

Haythornthwaite was welcomed as the perfect successor to Yurko not because he is a brilliant engineer or proven company doctor but because he is perceived as the shareholders' friend. At Blue Circle he had fought off the first bid from Lafarge because he would not allow the company to be sold too cheaply. When the higher bid came, shareholders gave in and he became a hero.

He wisely refrained from outlining a strategy for Invensys when he took on the job. The first lesson for anyone moving into a corporate war zone should be to avoid hasty analysis or, worse still, setting a timetable.

Luc Vandevelde came to regret his assertion that he'd put Marks & Spencer to rights in a couple of years.

The second must be to reassure the troops - difficult against a background of job losses and the possibility of a break-up or takeover, which must exist at Invensys. But after a period of turmoil, workforces best respond to leadership that at least gives the impression of being in control rather than floundering. Taking the time to go round the businesses and talk to staff is a sensible investment, and Haythornthwaite, with his easy manner, will make it pay.

When Matt Barrett took over at Barclays, he embarked on a series of meetings around the country at which staff could quiz him about plans. Stuart Rose, now running Arcadia, opted for a less formalised process but got out onto the shop floor, where nervousness was running high. His obvious enthusiasm for the role was the biggest fillip he could have offered to staff, who had seen the value of their share options plunging as the City scorned John Hoerner's decision to add the Sears fashion brands to his stable.

Archie Norman went even further, insisting that he and the executives he recruited to bombed-out Asda spend time working in the stores, alongside the people that he insisted should be known as 'colleagues' rather than staff. Norman also made full use of another tactic in the incomer's armoury: the harshest possible interpretation of the financial situation to be addressed. An early 'kitchen sink' job gives the incomer more chance to shine.

Rose was constrained on that front because of the timing of his arrival at Arcadia. When he finally assumed the role he'd coveted, the retail chain was already registering the benefits of some of the reorganisation that Hoerner had set in train after the Sears acquisition. The result was a double bonus to Rose's newly acquired share options: the Arcadia share price bounced on his appointment and again when he revealed a set of figures that showed an improvement in performance.

The chance to make a fortune may not be the main incentive that persuades individuals to take on the rescue task, but it helps. Haythornthwaite will have that opportunity at Invensys. Engineering a speedy sale would crystallise those profits, but I suspect that he'd be more enthused by the prospect of showing that he can build the business back to health.

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