Archie Norman is one of Britain's leading businessmen, currently chairman of Marks & Spencer and Signal AI.
He also spent eight years in politics as a leading member of the UK Conservative Party and a member of the shadow cabinet. Indeed, he is still the only person to be the chairman of a FTSE100 company and a serving MP at the same time. He describes his career as being "devoted to turning around and restoring the fortunes of businesses that deserve a great future, including Asda, Energis, ITV, Coles in Australia and latterly M&S".
As chairman of Asda he oversaw the turnaround that led to it becoming the second largest retailer in the UK and then took it on to exit, via a sale to the US giant Walmart.
He believes the genesis of a turnaround is the ability to face into the unvarnished truth and that long-term financial success is rooted in people and culture.
Last week he was a special guest at a dinner with Helm members. Helm is a community for like-minded founders of scale-ups worth over £1m. Here are some of the great insights and takeaways from the event.
The automation of data is coming, but it is still a long way away. A lot of money is being invested in the idea that AI will help us make better and faster use of the data we have today. Not many businesses are as well set with regards to how they use data as they claim. There is a degree of mythology about data engines and what they can achieve.
People give a business their data because they trust it. They want it to be used for their benefit, not for the business’ benefit. We don’t know how the use of data is going to evolve, or how technology will develop and what it will allow businesses to do. The key is that acquiring data must be seen as a privilege and a trust matter. People are happy to share with a trusted brand, but there still has to be the offer of something in return.
As a brand it is better to be useful than loved. Of course, the ideal is to be both useful and loved.
It is vital for a business to know who their most valuable customers are. It is not unusual for a tiny proportion of customers to account for a large proportion of total revenue. Work hard to identify them and make them feel special. Single them out for special communications and follow up.
In our mind’s eye, we are all brilliant at recruiting people. It is part of the necessary vanity of being a leader. The reality is we’re mixed at it. And people today are polished at presenting themselves. For every five people I hire, one is going to be a superstar, two or three are going to be varying degrees of OK and one is going to be a donkey. But I don’t know which are which. You need humility to say you don’t know. And to make sure that recruitment doesn’t stop when they arrive. Keep assessing so you can spot and remove the donkey as quickly as possible.
When you recruit people, use data and not impressions. We are all very susceptible to someone who is good at interviews. Do your homework and follow-up references, where possible by speaking to the people yourself.
Giving young people a "double jump" can pay dividends. Experience is overrated, whereas smarts or ability are underrated. Take a risk and give young talent a double jump. It also puts people into the fire very early on and they learn fast.
Being smart means having analytical capability. Having a PhD may be great, but it doesn’t mean you are going to be a good manager. Not all roles require the same skills, so hire for the role. For general management, analytical capability and an intensity of concentration are important. The ability to take a problem and work on it until you bottom it out is very powerful. You are looking for people with that.
In business, knowledge rarely matters because you can acquire it fast. But you acquire it because you are humble and curious. Because you want to understand how and why things work.
Traction is about having impact. It is the ability to bring people with you and effect change. You are looking for people you can tell are influential, that they are persuasive and are using logical and emotional reasoning.
Good chief executives are not necessarily balanced people. In fact, they’re generally unbalanced. They have a sort of irrational energy that’s needed to run an organisation. There’s a sense ownership and responsibility.
There are issues with working from home we haven’t solved. Most companies don’t know how to manage it. While we have won something with the flexibility, most of us know we have also lost rather more. If you work in a creative environment or any environment which is about the collision of ideas, for example, argument is good. And it is harder to do that online. It’s not impossible, but it is harder. And hybrid meetings don’t work. Let’s agree we’re either all in or all out.
Behind every financial failure, there is usually an organisational one. But beware of the top tips or nuggets on how to run a business. All businesses are different, and you only get to understand them by analysing the data and talking to the people on the front line. If you can read what the data and people are saying, you stand a chance of getting things right.
Turnarounds are always difficult. A business may be in trouble today, but usually the rot set in a long time before. To succeed in a turnaround you need to break things to rebuild them, you need to stop doing things or close things. You often need to make people and roles redundant. It’s not a nice experience.
Failure is often a long time in the making. The seeds of destruction were sewn long ago. To turn things around you need to remove the narrative of failure and that often resides in middle management. In a turnaround you need to listen to the frontline staff, because middle management have swallowed the failure narrative and it’s hard to see the truth. Organisations are naturally defensive and inward looking.
Business success doesn’t come from new ideas. It often comes from successfully borrowing good ideas that have worked elsewhere and applying them in a new context. You pull together the successful elements of an organisation and add in new ideas that have worked elsewhere.