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The Life and Times of a CEO and Chairman of MSBs

 

Tim Brooks

Serial Chairman

· Leader Interviews,Leadership,Strategy,Growth,Boards

“Emotionally, business leaders must let go and learn to keep hands-off at various points to seed and grow the business. They need to hire really well and often employ people that aren’t like them.”

I’ve spent a good proportion of my career in businesses with a high public profile, especially in the media industry. What I’ve found is that, in some industries, you have to be large to compete. The media industry, on the other hand, has always been a sector in which you can start small and grow big – or be bought out by one of the bigger companies. You don’t have to be large to be a success.

It’s perhaps also true that many creative-sector managers are home-grown and self-created, so you’re much less likely to encounter people with an MBA compared to other industries. Lots of these people will be self-taught or taught by the leaders they’ve replaced as the boss, so their management skills are mixed in quality. It’s difficult to generalise about such skills in any sector though.

The creative sector is extremely cut throat: there are more publications per head in the UK than anywhere else in the world. There is a ferocious competition which requires absolute focus from leaders and managers. So they may have learnt some bad leadership habits, but this fierce commercial environment has forced them to be extremely good at creating a business that survives changes and can work at a fast pace.

Is dealing with MSBs different to dealing with other types of businesses?

I once lectured to the MBA class at London Business School, and many of the students there had paid for their tuition. The majority had worked for very large companies and now wanted to start their own small business employing 5-10 people. Many of them were moving away from the impersonality of the large corporation.

Every small business wants to become a mid size business (MSB), and that is probably the biggest challenge – bigger than moving from a mid size to a large company. If you think of a chef with one restaurant, on a Saturday night they can probably see everyone they employ, they can see the product and the customer, and they get instant feedback – it’s almost the perfect business because you’re able to control everything at a glance. The move from that to an MSB and multiple sites is that you can no longer be as personal, you have to lose control. This is a huge leap for people to take, especially as they need to regain the creative spark that got the business going in the first place.

Emotionally, business leaders must let go and learn to keep hands-off at various points to seed and grow the business. They need to hire really well and often employ people that aren’t like them. This is hard for those who don’t yet have good experience with recruiting.

How do you grow from an MSB to a multinational business?

Once you go beyond one territory, you have to be much more rigorously organised and have a more diverse workforce. If you’re a British company but you’re trading successfully in other countries, you have to have people of those countries working for you. The idea you can just send out a UK team to run the business in a foreign environment is fanciful.

When you find yourself in the position where you have diversity, you have to formalise things more – the team have to understand the differences they will encounter working with people from different backgrounds. You need strong governance and processes for risk management and to deal with multiple legal frameworks.

It probably sounds incredibly boring, and what you need in those situations is people that don’t find that boring – people who are good at process management to keep you on the rails.

What have been the biggest lessons as a CEO of a multinational MSB?

When I became CEO, our company was trading in India and the USA – but it wasn’t working. The first thing I did was hire an MD for each country, including one to lead our expansion into China. That was quite a risk, so we had to spend a considerable amount of time making sure those MDs understood the culture and the nature of the business. It paid back in spades, however, because our UK growth was capped and international opportunities were plentiful.

One of my big learnings was around an individual that was quite wrong for our business. We wouldn’t have known about it except, as part of our cultural management, we live-stream our management team meetings. That meant any employee could watch our meeting on our intranet. People across all our offices could see how respectful and courteous we were and how we made decisions together – we collaborated really well during these meetings. After watching one of these meetings an employee from one of the countries had the guts to contact me to let me know what was going on there and how it wasn’t aligned with our culture. As a result, we dug deeper – and ultimately had to let that leader go. It was a big lesson for us, and we put more controls in place to reduce the likelihood of us getting key overseas appointments wrong in the future.

How do you convince a board to expand internationally, and how do you manage the risks?

In terms of the risk, it wasn’t a no-brainer – it was a substantial change to the shape of the business. The compelling argument though was that we had low or no growth in our domestic market and high potential for growth elsewhere. When you expand overseas, there is a risk of burning the money and not gaining traction, but there is also a bigger risk that if you don’t do it and your competitor does, they are going to get bigger and you will get smaller.

We hadn’t done enough risk mitigation, but we instituted a programme of job swapping between countries to build a web of connection between territories that are personal and institutional. When those personal connections are made, the office overseas becomes real – not just an entity that delivers income. It becomes personal to everyone in the business because that’s where John or Sharmila work, and we know those people and we like them.

The bigger point though is that when the business grows, communication is essential – the workforce cannot read your mind so saying something important in a very clear way and repeating it frequently is a vital part of the success of a larger organisation.

We also displayed printed posters on the wall with the company’s ambitions – the actual things we were trying to do. The average employee on £30k per year does not walk around thinking of your corporate objectives 24/7 so this is what we used to keep them informed.

How do you manage companies with a large public profile?

Businesses with a large public profile have a great deal of colour about them, and people set out to work with them because it’s where they always wanted to work and they share its values. When I worked for the New Musical Express, everyone who worked there loved rock music.

One of the challenges of that colour and having people with very strong personalities and conviction in your business is that when you want to change, it’s very difficult. I led The Guardian, a company that’s journalistically led, through the digital change as we launched the first news app in 2007. During the change, it was really important to get good developers into the business. Attracting them to work for us wasn’t hard, but once they were there it was a struggle for them to get heard over the voice of the journalists. We were losing good people.

The big shift we made was to sit the developers next to the news desk and, people being people, they spoke to each other and these walls started to break down due to increased contact. The journalists realised that the developers had good ideas and the skills to improve the way they were able to tell their stories. Journalists would present their concepts for stories to these new people, and with their digital skills they would work together on an infographic or a way to bring the story to life and increase the engagement of the reader. Once this starts to happen, attitudes and then behaviour changes as a result.

What have technical innovations added to the industries I’ve worked in?

At The Guardian, we used to be very wedded to focus groups of readers, listening to what our readers think of our work. Our editors were obliged to sit on the other side of a two-way mirror and listen to what our readers were saying about what they didn’t like about our publications. One of our competitors had a debate with me as she felt that this was crippling my editorial team, saying that I didn’t trust them. However, their views were vital to us.

Most of our editors lived in a bubble in the middle of London and didn’t meet their readers very often, so they didn’t always know what they thought.

UX is now used, and we get proper user feedback right from the start of the development of a story or product. Unfortunately, we now have developers who don’t always take account of feedback regarding UX, but we can overcome that. User feedback can be gained in more ways and it’s very sophisticated, so we don’t need to hold those small focus groups anymore – instead, we can have hundreds and thousands of people giving us real-time feedback by using our sites and reading articles.

What are the key differences between being a chairman as opposed to a CEO?

What I enjoy most about management is helping talented people to flourish and achieve what they are capable of within a business. And as a chairman, you’re in a unique relationship to the business’ CEO and management team, and you have a great opportunity to really help those people. If they’re smart, they will ask for your advice. Sometimes you just have to tell them what you think. It can be very rewarding, helping people avoid the mistakes you made. Also, it’s very lonely being an MD or a CEO, you cannot share all your concerns with your management team because they are looking at you to make decisions and get them right. You especially can’t share concerns about whether your team are up to the job they need to do. So the CEO can share their problems with the chairman and they can give them a real perspective and sounding board.

However, as chairman, you’re ultimately acting on behalf of the shareholders. That means you’re also judging the CEO’s performance, and that can make things tricky sometimes. I learned early on in my management career that if someone isn’t right for your business because of their behaviours or actions, then they need to leave, and you need to be the one to make that decision. As CEO or chairman, you can’t be best mates with your colleagues or fellow board members because there is a relationship there that involves evaluation and some distance and objectivity.

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