STEINER on SATURDAY: The conveyor belt of British bosses

The revolving door at Britain’s biggest firms has never spun quite as fast as over the past few months. Out went Bob Diamond from Barclays, with chairman Marcus Agius close behind.

Halfords boss David Wild was also dispatched and prior to that Keith Jones, chief executive of JJB Sports, was shown a red card.

The pressure to deliver the goods has never been so intense.

Out of the picture: Former Barclays boss Bod Diamond

Out of the picture: Former Barclays boss Bod Diamond

The downturn has turned the spotlight on boardroom performance and exposed tired strategies like never before.

But while some are given a helpful shove from their executive suite others have shown impeccable timing in picking their moment to stand down.

In a classic exit manoeuvre Simon Fox, chief executive of HMV, announced plans to step down after six years at the helm during which shares in the music retailer fell from 162p to 3.5p having turned an £80million profit into a loss.

He claimed credit for keeping the business afloat but damned his successor with loaded expectations, saying: ‘I am confident, as I hand over the reins to Trevor Moore, that HMV has a secure future under his leadership.

‘We are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10million in the year ahead.’

It remains to be seen how HMV will fare in the wake of the not-so-fabulous Mr Fox and raises a question over the timing of when bosses choose to stand down.


In Fox’s case it can hardly be said he has jumped ship leaving the business on a high, but in months to come his timing may be seen as fortuitous if the business descends to a new nadir.

It was a different case at Tesco where Sir Terry Leahy was considered a hero for transforming the business. However, months after his departure the wheels came off and the retailer posted its first profit warning in 20 years.

Bart Becht, who as chief executive of Cillit Bang maker Reckitt Benckiser was one of the best paid Footsie bosses of all time, was also deemed a star of the stock market.

But since passing over the baton the firm has stuttered in its developed markets and struggled to gain growth.

So did these bosses have a sixth sense about when to go or was their good timing just a coincidence? The answer is complex.

A good leader knows how to hold their strategy together.

As you might expect a boss who has come up with a ground breaking plan has a unique insight into how he executes it and a vested interest in seeing it succeed.

When he leaves, his replacement will naturally not be as well equipped to see this strategy through.

Moira Benigson, founder of the headhunter that bears her name, says there is always turmoil surrounding a new appointment from other internal candidates who were passed over for that job.

‘Tesco’s top team was always going to unravel,’ she said.

‘Terry kept his top team together for many years and a number of top people thought they were going to get his job. It was inevitable that those people would then find it difficult to report to a colleague.

‘There is an element of: “I’ve been here 25 years and I got passed over so I had better go and do it somewhere else otherwise I will be a failure.” So Tesco has started to lose that unbelievable team Terry created.’

Another issue is that when firms hire a successor what they actually think they need and what is actually required is quite different and this only really emerges after a period of time.

In the interim the wheels sometimes come off the business while a new boss struggles to find his feet.

He is given enough time to adapt and grow into the role in most situations but occasionally boards acts swiftly to find a replacement.

The reality is that most bosses are driven by leaving a legacy that is testament to their brilliance.

It is not in their interest to head for the hills and leave a firm that then falls apart in their wake.

Most aspire to leave executive positions and go plural sharing their expertise on multiple boards as non-executives.

Walking away from a car crash doesn’t look good on anyone’s CV.

But there are always the exceptions – those chief executives who know that making a quick exit before the inevitable happens is the least worst option for their reputation.

STEINER on SATURDAY: The conveyor belt of British bosses

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