Trailblazer: Allan Leighton

After Allan Leighton turned around the fortunes of ASDA and Lastminute.com, he could have opted for the easy life as opposed to becoming chairman of the Royal Mail. He tells Marc Barber why he doesn’t do easy

Since Tony Blair appointed Allan Leighton as chairman of the Royal Mail in 2002, around 50,000 employees have left the organisation. During that period, it’s gone from losing £1 million a day to posting profits across each of its divisions.

When Leighton steps down in March 2009, he will have been the longest serving chairman in the Royal Mail’s history. ‘I’m proud of that,’ he says. ‘I could’ve taken an easier job but I wanted to take it on because it was tough. The Royal Mail has been around for 200 to 300 years – I’m very patriotic – and it’d be great if it was around for another 200 or 300 years.’

Plain speaking
In light of the radical restructuring of the business, Leighton accepts that he may not be the most popular figure in the eyes of the workforce. ‘They know what they get from me and half of them like it and half of them don’t,’ he states. ‘They know I’ll always be straight with them and I’ve done that from the very beginning.

‘I’ve told them things that may not have been too palatable but they’ve turned out to be right. The thing you have to show people is respect and that involves telling people how it is,’ he says, adding there is still an awful lot to do for the incumbent chairman.

Leighton likes to get to the point. No digressions. No nonsense. Say what you see and do what needs to be done (‘Keep an organisation simple and focus. That’s it’). At ASDA, his management style and sales nous saw the company grow from a £500 million concern to one that Wal-Mart bought in 1999 for £6.2 billion.

‘ASDA was as tough as the Royal Mail,’ he says. ‘You know when you go in that probably a third of the people are not going to survive.’ He is a firm believer in making swift changes in the initial three months of joining an organisation. ‘The first 100 days in any business are critical. I make sure that whatever organisation I go into, we produce a 100-day plan. After that time, things slow down a bit.’

He evidently relishes a challenge. You get the impression that his call to arms is a job that no one else wants. ‘You have to look yourself in the mirror each day and ask if you’re doing the right thing. You can bullshit everyone else but you can’t bullshit yourself.’

At ASDA, Leighton assembled a future who’s who in British retail, including Justin King (chief exec at Sainbury’s), Richard Baker (CEO of Alliance Boots) and Angela Spindler (MD of Debenhams until earlier this month).

‘I brought together individuals who I knew – largely because we couldn’t get [then-established] people from retail as everybody thought we were basket cases. I wanted people who knew two things: firstly, the “customer is king”; secondly, “people are important”.’

They are overused, cringeworthy terms and Leighton freely admits they sound ‘trite’. In the day-to-day running of ASDA, it meant creating a collective, so there were no boardrooms or special offices and everybody was given shares in the company.  Employees referred to one another as “colleagues” and the “huddle” was introduced.

‘The “huddle” was just two or three minutes when staff got together and the managers said what they needed to say and then would ask what they could do for the staff. That happened at ASDA every day, in every store between every shift. Those two or three minutes are vital in terms of communication.’

Leighton would visit each store manager every 12 weeks. ‘Underneath what people thought was all warm and cuddly, was a lot of rigour and structure,’ he notes, adding that the best key performance indicator is talking to people.

When he started at Royal Mail, his approach was the same. ‘I went out and talked to as many people as I could to identify the main issues. I visited the delivery offices. I went with postmen on their rounds. It allows you to get a ground-up view of an organisation, which is often the best view. Then you go and sort it out.’

Back to basics
Although Leighton currently sits on nine boards – including BSkyB and Selfridges – and has been involved with numerous organisations during his career, he did spend a 17-year stretch at food company Mars (reaching the position of sales and marketing director for Pedigree petfoods, part of the Mars group), affectionately describing it as ‘one of the best management schools in the world’.  

He says: ‘There was none of this leadership training type of stuff where you’re made to climb Everest. You were taught the basics and this was built into the system and they’re massive building blocks that you never forget. One of my criticisms is that everything today has got too fancy.’

Another major influence on Leighton was watching how the Americans do retail. He says ASDA’s price-cutting on popular products – known as “the roll back” – came straight from visits over the Atlantic to Wal-Mart. ‘I used to go over to the US two or three times a year and visit Wal-Mart, especially before we sold it to them.’

Leighton says he’s ‘never had an original idea’ and one of his mantras is to ‘copy shamelessly’. That may sound straightforward, but you have to know what to copy and ‘give it your own twist’.  

The bulk of Leighton’s experience has come from working with corporates, but he was part of the turnaround team that made a success of Lastminute.com. He believes the principles of running a good and successful company are the same whatever the size of the business.

‘Whether it’s big or small, you have exactly the same problem. You have to protect your cash and you must have a real sense of purpose about what it is you are trying to do.’

He says it’s harder to run a smaller company than a corporate due to the lack of scale and resources. ‘You’re very dependent on what you do on a daily basis as your reputation can go up or down very quickly. Small businesses have to be more nimble on their feet and creative.’

One of the hardest decisions Leighton says he made in his career was selling ASDA. That may seem surprising, given that it made his fortune. ‘It sounds silly but it’s true,’ he says. ‘We had built it up over ten years and part of me was saying that we have created a great business. Did we really want to be a part of somebody else’s world?

‘Then the CEO in me was saying: “Hang on a minute, you have got to think about the future and the business needs more scale.” Where could be better to get that than from Wal-Mart?’

Leighton’s enthusiasm for business remains undiminished. Splitting his time between the UK and Canada, he says he doesn’t keep to a set schedule. ‘I go where I need to be. It’s not a case of “Oh, it’s Thursday, I should be at the Royal Mail.”’

That doesn’t mean he takes his roles at various companies lightly. ‘The idea of people just sitting on boards is unfortunately coming home to roost. If you sit on a board you’d better understand the company and what the issues are in the business and how it works.’

Be pragmatic
Pretty much everything Leighton stands for can be summed up in two words: common sense. He has the work ethic of someone who started work at 18 and didn’t go down the university route (although he did study an MBA at Harvard in his thirties). You get the idea that when he joins a company, he sees it as a personal mission to root out people who are going through the motions and fail to take pride in what they do.

‘Leading a company is not a popularity contest; there’s a job to be done. Your job is to do the right thing for the organisation and the people in it. So long as you are doing that, it doesn’t matter if you’re unpopular. But in the long run, you will be liked as people will see you did the right thing and they will thrive on the back of that.’

The role of a CEO is to ensure people are doing what’s in the best interests of the business. For Leighton, that means focusing on the job in hand by minimising distractions. In a tone of disgust, he talks about unnecessary ‘paperwork, emails, bulletins, phone calls and meetings’.

More often than not, this stops you from concentrating on what matters. ‘You need to minimise all of that and let people do their job.’