Hornby’s re-emergence from the ashes of the HBOS mess, demonstrates the enduring premium on leadership talent.
Despite the fallout from HBOS’s exposure to last year’s banking crisis, Boots’ executive chairman Stefano Pessina recognises that Hornby is a perfect example of one of many talented executives that have emerged in distinct “clusters” to rule the boardrooms of the UK’s top brands. Pessina clearly believes Hornby can rediscover the lessons of his great brand management heritage.
Hornby is rumoured to have been approached about the Boots role five years ago thanks to his strong retail track record as managing director of George at Asda and running the retail side of HBOS. Then, the chemist eventually appointed Richard Baker, but it is worth noting that Baker and Hornby already had a joint history.
They were part of a golden retail generation at Asda, under Archie Norman and Allen Leighton, which also included Justin King, now chief executive at Sainsbury’s. Far from being a fortunate coincidence, this scenario, where a cluster of top people emerge in the same place at the same time, has proved common in the UK business scene.
The trend for a group of over-performing executives coming together in a single point in time is so common that it is being studied by management experts. While the theory behind teamwork is well documented and researched, less is known about why certain groups peak together at stages in a company’s history.
Author Malcolm Gladwell, who wrote The Tipping Point, has identified this clustering of success in his recent book as one of the most important trends of the moment. His work Outliers (see below) tries to understand what contributes to high levels of success and what common factors can be found among high achievers.
While Gladwell may look at how time and outside influences affect achievement in general, recent research has suggested that, in marketing terms, top clusters spring up when truly exceptional performers are hired together and those few people are trained intensively in a skill set at the heart of that company culture. Taken together, this powerful combination blossoms into a crop of industry leaders.
This theory rings true for a good proportion of today’s leading marketers, many of whom emerged together from centres of excellence in Unilever, Procter & Gamble, Cadbury and Mars. Hornby, Leighton, Baker and King were all at Mars before they ended up at Asda, suggesting that the “cluster” began even earlier than at the supermarket chain.
The role of advertising is absolutely pre-eminent to [P&G’s] whole approach to marketing. It’s crucial to a brand’s success
John Hardie, ITN
P&G’s intensive training of marketing talent is renowned and recognised. As such, it is unsurprising that former executives of the company fill the senior ranks of competitors (Paul Polman at Unilever and Bart Becht at Reckitt Beckiser, for a start), but the company has also produced a mass of top talent for other sectors.
Take media and communications: Jeremy Darroch and Andy Brent at Sky, Gavin Patterson and John Petter at BT, Tim Davie at BBC, John Hardie at ITN – it reads like a roll call for stakeholders in Lord Carter’s Digital Britain. All started their careers at P&G in the late Eighties.
The process starts with P&G hiring the best people they can find. Their recruitment strategy sets much greater store than most graduate employers on concrete achievements, rather than abstract personality testing, role-playing or assessment of potential.
According to Roisin Donnelly, P&G’s corporate marketing director in the UK, recruitment at the company is all about the applicant’s past.
“Has done = can do = will do is the concept behind graduate recruitment,” suggests Donnelly. While that has always been part of P&G’s philosophy, learning from recruitment processes at a string of its acquisitions, such as Gillette, has only strengthened the company’s hiring conviction that the best predictor of future success is past achievement.
Tim Davie, now head of audio and music at BBC, agrees: “There is something in the DNA at P&G that ensures its graduates are likely to go on and build careers outside the narrow focus of FMCG.”
According to Davie, if you hire achievers – “more than a fair share of student theatre impresarios, May ball organisers, union presidents and debating champions” – then the talent pool is likely to be attracted to sectors such as the media with its particular combination of business leadership and creativity.
Mars is also noted for a brutally tough selection process that has been likened to a “two-day boot-camp”. Once staff were hired at the confectionery company they were drilled in every practical business discipline imaginable.
According to Simon Bassett, managing director of marketing recruitment specialist EMR, clever and bold recruitment is the key to the creation of great marketing DNA in your team.
“Marketing clusters are created by strong, forward thinking, dynamic managers who predict the future needs of their companies and hire with those needs in mind. If a dynamic managment hires people with the right skills and then filters the vision down from CMO level to its departmental heads and down to marketing managers, a cluster will occur.”
It is not rare, explains Bassett, for a fund management company to ask EMR for a list of potential new marketing recruits with no financial background at all. “As the digital space increases for example, the fund manager might say ‘we know the financial side of things already, what we want is a marketer from Lastminute.com or Expedia, somebody capable of driving change or thought leadership’.”
The headhunter also believes that the traditional academies of old will always be where new marketing clusters will emerge.
“P&G, Unilever, Mars and Asda became centres of marketing excellence because to young marketing graduates they will always define aspirational, brand-led marketing businesses. It stands to reason then that there are many pockets of industries where marketers have passed through and got their ‘FMCG brand heritage’ before moving on to new pastures and success.”
Every so often groups come through that change the rules and expectations for whole sectors through a combination of great recruitment and intensive training
When mobile phone brands emerged, he says, they looked to recruit from the banks and credit cards, believing the business models were similar to their own in terms of retaining customers, providing services and so on. “A decade on, though, mobile brands are pulling quality marketers from everywhere including FMCG. Even companies that aren’t so consumer-facing, such as law firms and investment banks, are now also hiring from outside of their sectors if their management is forward-thinking enough. They recognise that filling their business with insight into products and consumers will see them go from being strong companies to leaders in their industries.”
But hiring good talent only takes you so far. You also need a corporate culture that trains intensively. In P&G, which only ever promotes talent into management roles from within its own ranks, training has to be good because you never have the option of recruiting from outside.
That goes some way to explaining why P&G develops a generous quota of business leaders – but does not explain why they also transfer across to sectors such as the media. For John Hardie, newly installed CEO at ITN, who left P&G for marketing and then senior management roles at ITV and Disney, one further explanation counts.
Above and beyond the consumer focus and strategic thinking that marks out many possible leaders, he suggests the intensity in marketing and brand management was at its most extreme around television advertising: “In P&G, the role of advertising is absolutely pre-eminent to [P&G’s] whole approach to marketing. It’s crucial to a brand’s success.”
Given that focus, according to Hardie, it should not be surprising that some P&G talent will want to work in a field where that communication and creativity is the business itself.
Not every company has P&G’s long-term approach to talent and development, but those brands that have developed clusters of talent have a similarly intense focus on being the best in their field.
For example, one retail cluster stands out even beyond Asda’s well-documented pipeline – Dixons (now known as Curry’s on the high street). While the retailer may now be struggling against the forces of online retailers such as Amazon and supermarkets moving into non-food items, it was a force on the high street for decades.
Today’s generation of high street and retail marketers trace a disproportionately large “family tree” back to Stanley Kalms’ Dixons, including Ian Livingston at BT, Liz Fagan at Boots, Euan Sutherland at B&Q and John Plutheroe at Cable & Wireless.
What sets this group apart is the company’s absolute retail focus, according to David Kershaw, chief executive of M&C Saatchi. Kershaw knows Dixons better than most after years leading one
of the ad sector’s longest running client-agency partnerships. “Competitive intensity and obsessed with detail” is how Kershaw categorises Dixons – a retail masterclass for what has proven to be a significant number of today’s generation of retail leaders.
Like P&G, Dixons not only focused on hiring an unusually good crop of talent, but then trained its top people in in-store management with a similar intensity to P&G’s training in brand management. Livingston, for example, has talked about the “sink or swim” culture at Dixons, which used to throw talented executives into key roles at a young age. Livingston himself was cast into the job of finance director aged 32.
This match-up between top people and intensity seems to be part of the recipe to create talent clusters. It relies on an intensity stemming from the heart of a business, such as a relentless focus on the detail of retail at Dixons.
This is different from merely hiring from organisations that the chief executive admires. Strong mutual personnel exchanges between companies (such as the transfer of talent between Coca-Cola and its bottling partners or between BBC and Microsoft), where skills and understanding are transferred across top personnel, are critical to many organisations, but do not necessarily develop into producing an extended generation of talent for a wider sector.
Closer to home, Kershaw sees the same cluster effect in marketing services with many from today’s generation of leaders tracing their roots back to his old company, Saatchi & Saatchi.
“All that Eighties ad magic comes back to Saatchi & Saatchi,” observed social commentator Peter York in The Guardian recently. On the one hand, Saatchi & Saatchi trained a generation of today’s ad agency leaders and start-ups, including Paul Hammersley at Red Brick Road, Paul Bainsfair (the former chairman of TBWAEurope), Nick Hurrell and Alan Bishop, who has just left adland’s biggest client role as chief executive of COI.
At the same time, the founding partners “did it again”– turning M&C Saatchi into a top five UK agency in its own right. Many key figures in Saatchi & Saatchi’s heady early days are now also the leaders in other areas of the UK’s marketing communications sector. It is uncanny, but Sir Martin Sorrell at WPP, Lord Bell at Chime, Rita Clifton at Interbrand and Christine Walker, the founder of Walker Media, all either came out of the Saatchi & Saatchi talent stream or Zenith, its innovative media agency offshoot in the days when ad agencies were full service.
Those roots have now blossomed into a series of world-class businesses that include marketing services, PR, branding and media.
Something in that Eighties corporate culture meant that, for Saatchi & Saatchi, while its most famous political campaign claimed “Labour isn’t working”, the agency certainly was. It began a process that made the creative industries a centrepiece of wealth creation for much recent government thinking.
According to Tamara Ingram, herself part of that Saatchi & Saatchi talent stream and now leading Team P&G for WPP, this group of talent understood the company mantra that “nothing is impossible” above anything else, “combining client service, entrepreneurialism and can do”.
Every so often groups come through that change the rules and expectations for whole sectors through a combination of great recruitment and intensive training.
It will be exciting to anticipate where the next clusters will come from. If retail and FMCG were at the heart of talent development for today’s leaders, where are tomorrow’s leadership clusters right now? Will digital businesses or mobile phone companies, for example, prove to be the nurseries for future talent (see below)?
And as for Andy Hornby, he’ll be hoping he can continue the success of his personal cluster by ensuring Boots’ corporate figures match the influence that Justin King, his former classmate, is enjoying at Sainsbury’s.
What makes people successful? Malcolm Gladwell, author of The Tipping Point (2000) and Blink (2005), explores this topic in his most recent book Outliers. He tries to identify the cultural, social and environmental effects that lead to personal success.
Gladwell starts his book with a thesis that success is not a matter of simply “smart, ambition, hustle and hard work”. For example, he notes that many of the most high-achieving New York lawyers have similar backgrounds – Jewish men, born in the Bronx or Brooklyn in the Thirties to parents who had worked in the garment industry.
He notes that being born into a depressive economy meant the future lawyers grew up during a demographic lull and with less children in schools meant they received more time from teachers. Later, anti-Semitic feeling in the Fifties kept them out of conventional areas of the law, so they turned to areas such as corporate law “proxy fights” that became very lucrative in the Seventies and Eighties. The combination of background and cultural opportunities created a generation moving in the same direction: towards success.
Gladwell suggests that there is also logic behind many otherwise unexplained phenomena of success. One of his most popular themes in Outliers is the “10,000 hour rule”. He claims that success is usually the result of enormous periods of time spent practising greatness. For example, The Beatles performed live more than 1,200 times between 1960 and 1964, playing more than 10,000 hours of music. Bill Gates, who is interviewed in the book, is said to have spent 10,000 hours programming, which led him to create Microsoft.
Gladwell says reaching 10,000 hours at a chosen profession is one of the key factors to achieving success. Literally: practising really works. So is this the secret to how Britain’s most successful executives are making it to the top? Or is it more to do with the cultural influence of them all coming of age at the same time in businesses that were among the first to put advertising at their heart?
What makes the top UK executives at brands such as Boots and Asda fit into outlier success “clusters” is still perhaps a matter for debate. But it is clear that if Gladwell wanted to explore these groups of highly motivated and consistently employed individuals, he would probably have enough material for his fourth book.
Where’s the next great cluster to be found?
If you examine the DNA of the personalities that formed the great marketing clusters of the past, it’s possible to identify a common characteristic that informed their career paths. All of them showed willing to leave their comfort zones and swap companies and sectors in order to broaden their horizons. None of them took root in one company and became “a lifer”. Justin King, for example, joined Mars as a graduate trainee but then worked for Pepsi, Häagen-Dazs, Asda, Marks & Spencer and J Sainsbury.
John Hardie went from P&G to ITV to Disney and is now CEO at ITN.
Paul Geddes at RBS started at P&G before a career that involved senior retailing roles at the likes of the Kingfisher and GUS groups.
When I grew up as a young brand assistant manager, the places to go and get yourself trained up were Unilever, P&G and Mars. They had the best talent, provided a wonderful marketing education and armed you with a strong reputation. Is that still the case? Those graduate training schools are still of great importance but compared to 20 years ago there is a huge swathe of new generation businesses that graduates are also attracted to. Sectors, like digital with Google at the heart of things, simply didn’t exist. The best organised of them have a strong business and marketing culture running right through them and are very well equipped to provide us with our future top marketers.
Mobile phone businesses are also relatively new to the scene and for several reasons are potential breeding grounds for tomorrow’s generation of business leaders. They are sexy, consumer-facing businesses as far as young graduates are concerned, are heavily brand and marketing dependent, and are right at the forefront of innovation.
In the old days, rightly or wrongly, if you didn’t get a job with a confectionery or FMCG company, you were seen as slightly “second division”. Now there are definitely other options open to young marketers.
And because there are so many different options, it may actually be more difficult for marketing clusters to form. This may turn out to be a lost phenomenon.