“How bad have sales got to get before you consider resigning?” was the sharpest of introductions to our new non-executive director. He had just been appointed to our board by Cinven, the Private Equity (PE) house, which had backed our Management Buy Out (MBO) from the British-Dutch publishing conglomerate, Reed Elsevier.
He had enquired ever so politely, but this was like a well-aimed sniper’s bullet aimed at the heart of the chief executive (CEO).
Mike was in his 60s and had been a brilliant and long serving CEO. He had steered the business through a couple of tough recessions, and had the loyalty and respect of all of us on the board.
But this was a very different world. We were now away from the scrutiny of the public markets, and we had, perhaps naively, agreed to a set of quarterly targets that we had never come close to hitting before in our history. We needed to be so much more aggressive, given the £860 million pounds we had collectively borrowed to acquire the business.
IPC Magazines used to be caricatured as the ‘Ministry of Magazines’ by its rivals. It was over 100 years old. With 100 consumer magazines, it was the biggest player in Europe. It was seen as slow, inward looking and bureaucratic.
This was the second quarter in a row of difficult trading in this new and tough world of PE. By the next quarter, there was a different CEO, Sly Bailey.
Battlefield promotions are never easy. She used to sit next to me at all the board meetings, we were good friends and I was the only member of the board that was invited to her recent wedding.
From the moment, she was appointed CEO our relationship collapsed – by her design.
She was soon unapproachable, distant and harsh.
The camaraderie and team spirit that had got us all together to raise this enormous amount of money (still the largest MBO in British business history) had disappeared more or less overnight. It was now ‘dog eat dog’. The only thing that appeared to matter was the ‘numbers’.
Sly was far more tenacious and directive. She had soon completely transformed the atmosphere at the top of the business. She was hugely demanding and uncompromising. She and I were the youngest on the board, both having just turned 40. She injected pace, energy and a fearless approach to all challenges and issues. The change was nearly instant and Mike was soon long forgotten.
Whilst many decried Sly’s appointment because she was an inexperienced CEO, she brought courage and a relentless will to win – she had all to gain, and seemingly, nothing to lose.
Last year, I was privileged enough to have the opportunity to interview Carlo Ancelotti, one of the world’s leading football coaches. He has a golden pedigree and had won everything there was to win in the most challenging environment of European professional football.
He had first won the prestigious European Champions League whilst coaching AC Milan at the tender age of 42. He had gone on to coach my beloved Chelsea FC, here in England, Real Madrid in Spain and had just finished a successful stint as the coach of Paris Saint Germain in France. He had recently been appointed coach of Germany’s leading football club, Bayern Munich. He is coaching royalty.
As a taster, I enquired “when will you win the Champions League next?”. He raised his famous left eyebrow, and smiled, “I doubt whether I will be winning the Champions Leagues again”. The audience drew a stunned collective gasp of breath.
How could one of the world’s leading coaches front up, on camera and with a live audience admit that he wasn’t good enough?
He smiled and said in his very charming matter of fact way, “winning the Champions League is now a young’s man’s game”.
He now sat upright and explained “look at the recent winners, apart from Sir Alex Ferguson, all the rest are in their early 40’s. I won it when I was 42. Zinedine Zidane (the coach of Real Madrid) was also 41 when he won it last season”.
“I am just too old at 57. I’ve become far too cautious and guarded now. Despite the fact I know it, I just can’t mask feeling that I have become confronted by the fear of failure”.
“At 42, you fear nothing, you have all to prove and nothing to lose. Therefore, you throw all caution to the wind and just go for it”.
This was remarkable honesty, but wasn’t he selling himself short? This appeared all too ageist both for me and our lively audience. But maybe this was not about age per se?
This might just be more about how our attitudes change with maturity.
Our much-revered CEO, Mike, was very much the elder Ancelotti. He had also become guarded and cautious, at a time when we just needed to go for it. Sly, on the other hand was young at heart, full of energy and desperate to make a name for herself.
Fortune magazine’s research shows the CEO’s of the 500 largest companies in the USA have a median tenure of 4.9 years, but some are new and some are in no hurry to depart.
CEO’s in the UK leave faster apart from those in Brazil, Russia or India, according to a study of the world’s top 2,500 companies by PwC. UK bosses are spending 4.8 years in the top job, falling way below the UK high of 8.3 years in 2010.
Whilst this can seem short, CEOs staying power compares favourably with UK football managers, whose average tenure is 1.23 years.
Now that’s rapid.
Despite the obvious differences, these leadership roles share some striking similarities apart from increasingly short tenures.
They share the glare of constant publicity:
There is no hiding place when you are the CEO of a publicly listed entity. Your quarterly and annual results are there for all to see and comment on. The financial pages can be harsh and cruel, and sometimes based on the flimsiest of knowledge and with little insight into what is actually going on.
It’s probably even more harsh and visible for a top football coach. Your results are on the back pages of the tabloid press every single week, and if that wasn’t enough, everyone of your club’s fans know how to do your job better than you do. You are expected to engage with them, no matter how nonsensical their viewpoints.
You are seen as public property:
Both as CEO and as a leading professional football coach you have to respond to the challenges and the questioning of the media. For the CEO’s, their shareholders can ask any and all questions when they choose fit. You must respond to these with a sense of urgency and positively, otherwise you and the business will suffer immediately.
As the referee blows the final whistle of the match, that you as the coach have been emotionally immersed in, the camera and the microphone are instantly thrust into your face. There is no sympathy or empathy, they will ask precisely why you lost, and why you had failed? Who cares if you are humbled or humiliated?
Your compensation is public knowledge and constantly commented on:
Your (outrageous) salary and bonuses are the talk of the cafeteria, social media and the newsfeeds. You will be constantly harangued by just how much you earn compared to the lowest paid in your organisation.
There is no defence for what you earn. Engaging in this conversation has zero benefit, but you and your family will continue reading that you are clearly not worth it!
It’s an unforgiving pressure cooker of an environment:
There is always someone calling for you to be fired! You rarely receive positive feedback or encouragement.
Everybody always compares you with the best that have ever run the business or the football club. No-one cares that it was a completely different era then. The competitive pressures are far greater today because of the global context and the ultra-competitive environment.
“Stop moaning – you are paid handsomely to deliver” is the usual caring retort.
The buck always stops with you:
No matter what goes wrong, it’s always your fault and why didn’t you see it coming?
Nowadays, it is no longer appropriate or acceptable to have your communications people deal with the negative ‘noise’. The cry is for the authentic leader who ‘faces the music’.
There is little pity or sympathy as you squirm uncomfortably in front of all gathered at the press conference. The media believe that their role is to hold you to account on behalf of … well who? Is it the shareholders or fans that are demanding that you are hammered in front of the workforce you will have to motivate first thing the following morning?
I was recently asked to give a talk on leadership at Arsenal FC, at their stunning Emirates Stadium, to the top 100 of their management team. The event was led by Ivan Gazidis, the former lawyer and now CEO of Arsenal FC. Both he and the coach, Arsene Wenger, have been under untold pressure to win the Barclays Premier League and the European Champions League.
They are a tight double act with different approaches and skill sets. Ivan is never ruffled, relatively low profile and is a clear thinker. But they have striking similarities in that they are both urbane intellectuals.
Arsene has become increasingly volatile under the constant and withering put downs by the media, and most disconcertingly, even by a significant number of the club’s fans.
It has been painful and hugely unfair at times, but football clubs are ‘passion brands’. They excite and attract unconditional loyalty beyond any business brand. No matter how bad they perform, fans might stop attending, but they never stop their love affair with the club. They just can’t walk away, but they feel that in return for this undying loyalty, they deserve to be heard.
From flying small planes with trailing banners demanding “Wenger Out” on match days, to social media sites dedicated to the removal of Wenger, it was a toxic atmosphere. He has visibly aged and has become more ratty and grumpy with the media.
There was a palpable siege mentality growing with the gathered management team. Despite the fact they had won the FA cup for two seasons on the trot, the expectation had only been ratcheted up.
This adversarial environment benefits no one.
I experienced this again when working closely with Jim Yon Kim, President of The World Bank. He always remained philosophical about the negative criticism. “No matter how good you think you are as a leader, my goodness, the people around you will have all kinds of ideas for how you can get better. So, for me, the most fundamental thing about leadership is to have the humility to continue to get feedback and to try to get better – because your job is to try to help everybody else get better”.
Where is the humility for these leaders in the toughest of environments?
Or do they willingly accept the pressure and opprobrium by signing that financially lucrative contract? Or on the contrary, is it the constant pressure that drives up the price businesses have to pay to attract and retain those with Arsene Wenger’s never say die spirit and attitude.
Arsene is now 67 years old and is in his 21st year at the club and still fighting for what he believes in, but it also has to be said, he is so much more cautious and guarded now than in his early buccaneering days at the club.
In the unforgettable 2003/4 Premier League season, Arsenal went through the whole season undefeated. A remarkable feat, delivered by a much younger Arsene Wenger, when he clearly cared less about the endless criticism.
Carlo went on to win the Bundesliga title with Bayern Munich and they were knocked out of the Champions League in the quarter finals.