Top guns: Is there still room for the maverick retail chief executive?

Lurid tabloid headlines and post-nightclub paparazzi pictures bring to mind celebrities more than chief executives. But retail has always been a little bit different.

The big boys have got away with being a bit bolder, outspoken, and more recognisable to the average man on the street than most businessmen. But today’s more sober, highly professional chief executives are less likely to court publicity and more likely to have started as a management consultant than on the shopfloor.

The latest larger than life character to leave a top job with a major retailer is Terry Green, now Tesco’s ex-clothing chief. Meanwhile Sir Stuart Rose - who has made a habit of creating column inches by going off script in his appearances at the Retail Week Conference for the past few years - will leave Marks & Spencer next March.

So can mavericks still make it to the top jobs, or are more anonymous business leaders the order of the day?

Former B&Q and New Look chief executive Jim Hodkinson - himself a retail personality from the old school - says that there is always room for a mix of people, and some businesses in particular benefit from a charismatic leader.

World Retail Congress director Ian McGarrigle was the news editor on Retail Week when it first launched and followed many of the characters in their heyday. He says Terry Green was able to continue to thrive in what was perceived to be the more sober environment at Tesco: “It was felt that Terry Green wasn’t a Tesco person - but it was a really clever move because they wanted to inject a different culture into the clothing side of the business.”

Green came out of the Burton Group school of retail, led by perhaps still the most infamous retailer of them all - Sir Ralph Halpern. The teenage-model seducing fitness fanatic made the pages of the News of the World for his bedroom antics, while at the same time keeping investors happy with his business performance.

But when the share price went south, those who had been happy to overlook his indiscretions quickly turned on him. As Hodkinson says: “The media loves to kick people if all of a sudden they have a bad lot of results - and they are too quick to do that.” However, he warns that retail leaders who court publicity need to live up to the name that they make for themselves.

Credit Suisse retail analyst Tony Shiret agrees, saying: “Big personality guys tend to attract attention to themselves and they don’t understand the significance of it.” Just as for celebrities, those who are built up by the press can also find themselves knocked down.

An editorial from Retail Week in March 1988 really says it all about Halpern: “In reality he has always been an outsider: tolerated, admired perhaps, but rarely liked. His aggressive pursuit of success, and wealth, is not geared to making friends.”

A closed book

While current retail bosses such as DSGi’s John Browett or HMV’s Simon Fox may be regarded as tough internally, to the outside world they tend to maintain an image of sober professionalism.

Halpern’s legacy continued to live on, with many of the Burton boys ascending to the top jobs and retaining their unique personalities. Halpern’s protégés include John Hoerner, Terry Green, Angus Monro, Sir Stuart Rose and John Coleman.

However, it wasn’t just these high-profile retailers who benefited from his belief in rewarding success. Low-profile executives such as Burton Group finance director Mike Wood were also highly regarded internally, with salaries and share options to match in the company that was run as a meritocracy.

While retail headhunter Fran Minogue, managing partner for the global retail practice at Heidrick & Struggles, recognises professional managers can be good for big business, she believes charismatic leaders are still desired.

“I hope there is still room for characters; it would be awful if it has all taken over by consultants” she says. Minogue adds that she has placed plenty of senior retailers from the present generation who have strong characters, although they are not autocratic.

Special qualities

And Minogue adds: “Exceptional consultants can make chief executives, as can CFOs. But irrespective of your background you do need some charisma to make it as a chief executive in retail. For instance, Ian Cheshire is an excellent chief executive. He learnt strategic thinking and business modelling as a consultant, but also succeeded in solid operational roles to prove himself as a general manager before taking the helm at Kingfisher.”

Korn Ferry Whitehead Mann partner Sally Elliott points out: “An element of charisma comes from experience through holding a senior role where you are very visible and the day job consists of taking people with you.

“Retail attracts people who are good at inspiring others and communicating effectively. If you don’t have these leadership skills, it is unlikely you will go on to hold a senior role as they are critical to commercial effectiveness.”

There are examples of traditional retailers who have outclassed their more anonymous professional management competition.

Take Iceland’s Malcolm Walker. Professional managers ran Iceland after he was ousted. When he returned four years later in 2005, he said overheads had increased by £40m and he referred to a “massive growth of complexity and bureaucracy throughout the business under the previous management team”. He pointed out that far from delivering results, the management had led to a loss of profitability and an annual turnover £400m lower than when he left.

Minogue adds that founders have a much freer rein, even when the company is public. She worked with Dame Anita Roddick at Body Shop before becoming a headhunter, and says that as ambassador and spokesperson for the company you could not separate Roddick’s personality from the brand.

Minogue adds that you are “unlikely to get away with being so colourful unless you are a founder”.

Shiret says that while Body Shop was growing, having someone outspoken who generated press was not a problem. But once the company had a store on every corner it was a different matter. “A lot depends on the size of the business and how close the senior management is to retailing,” he says.

George Davies is another example of how a character can thrive in retail. However, one source points out that he is a creator of businesses, rather than a long-term manager of them. “When it is at the launch phase it is all about him,” he points out.

Hodkinson accepts that it is “always people with personalities” who create retail businesses from scratch.

Today’s larger than life headline-grabber is, of course, Sir Philip Green. But would he have been able to run Arcadia as he has - including hiring Kate Moss - if he had had to pander to investors in the City? It is unlikely; and it is believed that Green made a vow never to run a public company again after he was criticised when the listed retail business he ran - Amber Day - fell short of expectations.

Perhaps hoping to follow in Green’s private ownership footsteps is Chris Dawson, founder of general merchandise retailer The Range. Those that saw him at the Retail Week Conference this year are unlikely to ever forget his performance - speech is the wrong word as it was littered with a liberal amount of stand-up comedy. He says he was just being himself: “I wanted to command that audience and make them laugh. I was talking to people for an hour afterwards. That’s my style.”

He adds that he does actually talk business sense but he does it how he wants to. Dawson says that this is all part of the persona. “I spent 20 years as a market trader - that is where all this comes from. I was nearly a tourist attraction down in Newquay.”

However, he is not negative about the leaders of big listed retailers.

He simply says it is obvious that those running their own companies will give their all: “People like Sir Philip Green fight for the last ounce.”

The drinks are on Ted

One retailer who seems to have been able to balance a big personality with public ownership is Ted Baker’s Ray Kelvin. However, he is unique in that he has been at pains to give “Ted Baker” the public persona that most founders would build around themselves.

So you won’t see pictures of Kelvin leaving private members’ club Annabel’s - as Rose and Green have been - although he is able to perpetuate the company’s slightly cheeky, fun image.

Hodkinson thinks it can be a good thing for company morale to have high-profile executives. “It is pretty good for a business, and they like to see their boss out there and their company in the press. It trickles down.”

Some believe a personality can also help pull in the punters. Hodkinson says Rose gives M&S a profile. “Stuart is a good manager and has been highly successful. It’s a very big business and he’s turned it around. It gets column inches.”

However, not all agree. Shiret says of Rose: “I think there are issues with Stuart more fundamental than getting drunk at Annabel’s.”

Despite his fall from grace, Halpern wasn’t afraid to continue to speak out in the press. In 2005, he told The Times: “There has to be a culture change in the running of large public companies.”

However, he wasn’t suggesting chief executives become more anonymous, but rather they be incentivised to perform better, and some would say take bigger risks. He predicted that more UK Plcs would be taken private unless the City restructured pay packages to deliver bigger rewards for success.

He said: “There is a tremendous chasm between the rewards of running a private company and the strains and lesser rewards of running a public company. This has to be addressed by people in the City.”

McGarrigle concludes that the mood towards big characters goes in cycles, and this is not the first time people have talked about a drive towards more professional leadership.

As long as new retail businesses emerge with characters at their helm who embolden their staff to behave likewise, at least some in the industry will stay as high profile as ever.