Business Leader Magazine: March/April 2024 by Business Leader magazine

Business Leader Welcome to the new

MARCH / APRIL 2024 £10

Simon Arora on building B&M

The top business pivots of all-time

PLUS How to wargame a strategy

Our expert columnists on politics, entrepreneurs and more

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CONTENTS M A R C H / A P R I L

The news that matters

08 THE BUSINESS LEADER EXPERTS

EDITORIAL Graham Ruddick – Editor-in-Chief Graham.Ruddick@businessleader.co.uk Andrew Lynch – Assistant Editor andrew.lynch@businessleader.co.uk

Our expert columnists on politics, high performance, talent management and more

Josh Dornbrack – Editor of businessleader.co.uk josh.dornbrack@businessleader.co.uk

22 COVER STORY

James Cook – Digital Editor james.cook@businessleader.co.uk

Simon Arora on the rise of B&M

Patricia Cullen – Senior Business Reporter patricia.cullen@businessleader.co.uk

30 TO B CORP OR NOT TO... The best seal of approval for a business?

37 SECRET SAUCE Tessa Clarke of sharing app Olio

38 LESSONS FROM ANOTHER FIELD

Alice Cumming – Editorial Assistant alice.cumming@businessleader.co.uk Mark Shillam – Chief Sub-editor mark.shillam@businessleader.co.uk

SALES

Chef Jason Atherton’s kitchen strategy

George Buckingham – Commercial Director george.buckingham@businessleader.co.uk

42 THE ART OF WARGAMING

DESIGN/PRODUCTION

How to plan for disaster

Phable Ltd – www.phable.io

DIGITAL & WEB

46 AGAINST THE GRAIN Sukhendu Pal on Oracle’s Larry Ellison

Gemma Crew – Marketing Manager gemma.crew@businessleader.co.uk

48 THE TOP BUSINESS PIVOTS

Lee Irvine – Head of Multimedia/Video lee.irvine@businessleader.co.uk

Changing direction in the corporate world

54 CASE STUDY What went wrong with Yellow Pages

60 BOOKSHELF Harvard academic Amy Edmondson on failing

66 DEBRIEF ...from the masters of strategy

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CIRCULATION Adrian Warburton – Circulation Mgr adrian.warburton@businessleader.co.uk

MANAGEMENT Andrew McLaughlan – CEO andrew@businessleader.co.uk Editorial enquiries: Editorial@businessleader.co.uk General and advertising enquiries: info@businessleader.co.uk

06 THE AGENDA

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EDITOR’S LETTER ello and welcome to the new Business Leader. It is a pleasure to be able finally to write those words. What you are looking at today is the result of months of work, planning and research. All of that was aimed at one thing – to build a new agenda-setting, inspirational and aspirational business publication for the UK. For too long the UK has looked longingly at the US and other countries and wondered. Why are they more successful at building businesses? Why are their economies more productive? Why do they seem to encourage and celebrate entrepreneurialism more effectively? Is it simply because they

have skills that we just don’t have in the UK? Our answer to that last question is very clear – no. There is an astonishing collection of people in the UK trying to build businesses, innovate and create jobs. Many of them feature in this edition of Business Leader. But until now there has been nowhere to share their stories of success and failure, nowhere to share their expertise and nowhere to share their views on the news that matters. There is a reason that the 110,000 medium-sized businesses in the UK – the very heart and core of the economy – are often referred to as the “forgotten middle”. If you look online or on the shelves of WH Smith for business publications

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you will find a collection of American titles – Fortune, Forbes, and Fast Company to name just three. They are fine publications. But they were created in the US and are for the US. We believe that one of the reasons the US has been more successful at building large businesses is the existence of these publications and how they share expertise, ideas and news among entrepreneurs. To quote Isaac Newton: “If I have seen further, it is by standing on the shoulders of giants.” Now, with Business Leader, the UK has a publication too. We will cover business for those interested in business and for those who want to succeed. Think of Business Leader as your own coach or mentor. We will not be blindly positive or blindly negative. We will be constructive. We recognise that for all the challenges in the world there has also been extraordinary progress. We want each edition of the new magazine to be one that you keep referring back to over time. So each edition will have an overarching theme – a vital plank in building a business. That means each edition of the magazine will come together to form a bible on how to build a business. The theme for this issue is strategy. This is just the start. We intend to introduce more features and content in the coming months. Please get in touch with your feedback and ideas. I want to finish with an extract from an email that Steve Jobs, arguably the most influential business leader in the last 50 years, sent to himself shortly before he died in 2011: “I did not invent the transistor, the microprocessor, object-oriented programming, or most of the technology I work with. “I love and admire my species, living and dead, and am totally dependent on them for my life and well-being.” Welcome to the new Business Leader.

Editorin-chief Graham Ruddick M A R C H / A P R I L 2 0 2 4 /// 0 5

Barratt agrees £2.5bn deal to acquire Redrow

Game to end sale of preowned titles

01 Tesco and Sainsbury’s to exit banking business after nearly 30 years Two of the UK’s biggest supermarkets are pulling back from financial services, nearly 30 years after they launched their own banks to challenge the established brands. Sainsbury’s has announced it will exit its banking business while Tesco has agreed to sell Tesco Bank to Barclays for £600 million. Sainsbury’s Bank and Tesco Bank both launched in 1997. Sainsbury’s Bank was a joint venture with Bank of Scotland, but Sainsbury’s took full control in 2014. Sainsbury’s said there will be no immediate changes to its services, but that there would be a “phased withdrawal from our core banking business” and any financial services it offers in the future will be with a “dedicated financial services providers through a distributed model”.

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Game, the high street video game retailer, plans to shut its preowned business. A spokesperson from Frasers Group, Game’s parent company since 2019, said trade-ins will be phased out over the coming months, but pre-owned games will still be sold in standalone stores while stocks remain. The move comes amid a shift to digital purchases for video games, with roughly nine-in-ten purchases now digital.

Return to office orders ‘fail to boost performance’ Researchers from the University of Pittsburgh have found companies that ordered staff to return to the office rather than work-fromhome did not enjoy a significant change in their performance. The study looked at 137 S&P 500 firms that publicly announced plans to return to the office. Researchers from the Katz Graduate School of Business concluded: “We do not find significant changes in firm performance in terms of profitability and stock market valuation after the return-to-office mandates.” Employee ratings of work-life balance, senior management and cultural values all decreased after returning to the office.

IMAGE CREDIT: Getty Images

A round-up of business news and research that matters. Our focus in this edition: strategy

Barratt and Redrow have agreed a £2.5 billion deal to combine two of the UK’s largest housebuilders. The all-share merger will involve Barratt shareholders owning just over two thirds of the combined group, which will be renamed Barratt Redrow. The companies said the deal will bring together two companies with “highly complementary geographic footprints and three highly respected brands”. Redrow is more active in the south east of the UK than Barratt. It will be positioned as the premium brand in the combined group’s portfolio. The deal, which is yet to receive clearance from the Competition and Markets Authority, follows a decline in the sale of new homes and is expected to save the businesses at least £90 million in annual costs. David Thomas, chief executive of Barratt, said: “The combined group would leverage the respective strengths of both Barratt and Redrow.”

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Fox, ESPN and Warner Bros Discovery to launch joint sports streaming platform Stand by your armchairs sports fans, this could be a bigger deal than Taylor Swift and Kansas City Chiefs star Travis Kelce at the Super Bowl, pictured left. The American media groups Fox, Warner Bros Discovery and Disney-owned ESPN are to team-up to launch a sports streaming platform. The joint venture, which will have a new brand as well as its own independent management team, will combine the companies’ broad portfolios of sports rights, services and channels. It will include content from the National Football League (NFL), the National Basketball Association (NBA), Fifa World Cup, Wimbledon and college competitions. The media companies described the venture as an “all-in-one premier sports service”. Subscribers will have access to television channels such as ESPN, Fox and TNT and will be able to bundle it with other streaming services including Disney+, Hulu and Max. It could save costs for the companies and consumers.

Four out of five British companies expect to increase prices over next two years Four out of five UK companies think they will increase the costs of their goods and services over the next two years, according to research from PwC, the Big Four accounting practice. Volatile energy costs look set to challenge competitiveness and fuel inflation.

81%

72%

Of 750 organisations surveyed, 81 per cent said they planned to increase prices at least moderately over the next two years because of high energy costs and the withdrawal of government support.

Nearly threequarters of respondents, which included private and public sector organisations from various sectors across the UK, said they expected their profit margins to be hit by climbing energy costs.

Vicky Parker, above, sector leader for power and utilities at PwC UK, said that state subsidies for companies “cannot be a permanent coping solution for volatile energy costs”. She said government support “has allowed transformational thinking to become less of a priority”.

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Sunak and Starmer will pull no punches in a rollercoaster ride to the general election S T E V E N

uckle up. The next seven months are likely to be one of the most expensive, most bitterly contested and longest election campaigns in British history. The state of the polls, with Labour consistently enjoying a 20-point lead, means that the prime minister Rishi Sunak and the Conservatives have little to lose. Vituperative personal attacks from both sides, relentless Tory psychodrama and an arms race for the support of businesses will become the norm. The run-in to polling day, which No 10 has pencilled in for November 14, will be both brutal and frenetic. However, strip away the political rhetoric and the election will be won and lost on the economy. After several shifts in his strategy Sunak has finally alighted on a consistent theme: stick with us and our plan to deliver a brighter future. The Labour leader Sir Keir Starmer, so the Tories’ central argument goes, will take the economy back to “square one”. The riposte from Labour is straightforward. Over the past 14 years the Tories have trashed the economy. Energy bills are higher, prices in shops are higher and mortgage repayments have gone through the roof. The time has

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come for real change. The Conservatives’ hopes for what is an increasingly narrow path to victory rest on a significant improvement in the economic outlook and tax cuts. No 10 and the Treasury believe the economy is heading in the right direction, with inflation poised to fall significantly in coming months. Cabinet ministers hope the Bank of England will begin cutting interest rates sooner than expected, handing a much-needed tonic to homeowners battling higher mortgage costs. The Tories are also poised to embark on two rounds of significant tax cuts, the first in the Budget on March 6 and the second in an Autumn Statement on the eve of the election. The focus will be on personal tax cuts, with reductions in the headline rates of income tax and national insurance. The Tories hope that by the election people will feel better off and more optimistic. The improved economic outlook, so the thinking goes, will be enough to win over undecided voters. Whether Sunak’s optimism survives impact with reality remains to be seen. Tax cuts, once viewed as a magic bullet, are being met with increasing scepticism by voters. In the last Autumn Statement Jeremy Hunt, the chancellor, cut national insurance by 2 per cent at a cost of £9 billion a year. It failed even to dent the polls. No 10 and No 11 believe it failed because it was seen as a pre-election “bribe”. The new strategy is to link tax cuts explicitly to economic growth. However, Labour is deploying what has so far proved to be an effective counternarrative. Rachel Reeves, the shadow chancellor, has pointed to the fact that under the Conservatives the tax burden is on course to rise to the highest level since the 1950s.

Any tax cuts by Hunt will be eclipsed by increased tax revenues from the government’s decision to freeze income tax thresholds. “Rishi’s raw deal”, Labour’s attack advert says. “Pay £10 more tax and get £2 off”. Arguably the biggest challenge Sunak faces is not Starmer: it is his predecessor Liz Truss. In the wake of the former prime minister’s disastrous mini-budget, public trust in the Conservatives’ economic competence has tanked. Labour is now seen as consistently more trusted on the economy than the Tories. The opposition is desperate to guard against complacency. Morgan McSweeney, Starmer’s chief election strategist, once compared the Tories to a killer whale tipping over an iceberg before eating a seal. In his metaphor unsuspecting Labour MPs were the seal. However, the party has its own issues to deal with. In November 2021 Reeves committed to spending £28 billion a year on green investment if Labour won the election. She would, she said, be Britain’s first “green chancellor”. That commitment has now been dropped after becoming the Tories’ central attack line. The Tories argued that under Labour’s own fiscal rules, which include debt falling as a proportion of GDP over the next parliament, the pledge could not be met through additional borrowing. Labour, the Tories said, would have no choice but to raise taxes. Alongside this is a battle for credibility with businesses. Both parties have business councils with an array of household names, and both are attempting to pitch themselves as the party of business. For the Tories, it is a question of rebuilding trust in the wake of Truss’s premiership. For Labour, it is a question of distancing themselves as much as possible from former leader Jeremy Corbyn. Behind the scenes this battle has descended into something of an arms race, with both sides fighting it out to win endorsements.

IMAGE CREDIT: Adobe Stock / Getty Images

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‘For the Tories, it is a question of rebuilding trust in the wake of Truss’s premiership’

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At one stage Hunt intervened directly with business leaders to torpedo Reeves’s shadow business council. It launched a few months later with even more names attached. There is to date little difference between the economic prospectuses of the two parties. They are broadly aligned on both tax and spending, with Labour supporting cuts to national insurance. Both sides have also signed up to plans which would see public spending rise by just 1 per cent from 2025, meaning significant cuts to unprotected departments. The Office for Budget Responsibility has described the assumptions underpinning public spending as a “work of fiction”. Economists argue that whoever wins the election will have to either increase taxes or cut public spending.

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For Sunak, there is also an existential challenge: whether he will make it to polling day. The prime minister is the subject of an overt plot to oust him which appears to be well-funded and organised. Two MPs have gone on the record calling for him to go, and MPs believe that a combination of damaging by-election results and disastrous local election results in May could finish him. The political logic is that Conservative MPs would not be mad enough to remove Sunak and replace him with a fourth Tory prime minister in the space of two years, just months before an election. But as the past four years of feuding and bloody coups have demonstrated, logic does not always prevail. Steven Swinford is political editor of The Times

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Five laws that spell success and can put you on top in a crowded marketplace H U M P H R E Y

here are hundreds of thousands of podcasts around the world. Many focus on the areas we talk about – mindset, business, high achievement and finding your sense of purpose. A question I get asked all the time is, why has my High Performance podcast been so successful? I think the answer to that is because High

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Performance is about the outcome, not the income. What inspired me to think like this is a book I read a few years ago, just before lockdown, by Bob Burg and John David Mann. That book is called The Go-Giver and it has five laws that I want to talk through. The first is a law of value. This states that your true worth is determined by how much you give in value rather than what you take in payment. The best leaders are the ones that

IMAGE CREDIT: Getty Images / Adobe Stock

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B U S I N E S S

serve those around them. I love the phrase that takers eat well and givers sleep well. The next thing is the law of compensation. This is that your income is determined by how many people you serve and how well you serve them. That is one of the key things we ask ourselves on High Performance every month. Are we reaching more people? We have about four million people downloading High Performance to listen or watch in a given month. What makes me happy about that is that we are not on BBC1 or ITV on a Friday night at 7pm. We don’t spend hundreds of thousands of pounds on advertising. We have been created organically by an audience wanting to come and find us. We know we are doing something right. Burg then talks about the law of influence, which is determined by how abundantly you place other people’s interests first. I want us to get away from the idea that self-made success is what we should be celebrating. Every time I open Instagram I am surrounded by socalled influencers or business leaders telling us all the things that they have done on their own to be successful. The truth is they could have been 100,000 times more successful by working collaboratively with other people. On our own we can do so little, together with others we can do so much. So how do you create the law of influence in your own world if you are reading this column? First, ask yourself all the time, not how does this serve me, but how does this serve other people? On High Performance, and even with my production company Whisper, everything we do is about tailoring the output to what others want. It is not about what we want to do. It’s about what people need. I get really frustrated sometimes when I hear people say “I’d really love to do this”. My question every single time is “well, does that serve others? Are you sure that’s something that other people want?” I can’t tell you how much of a mindset change this was for me. The fourth law is the law of authenticity. This states that the most valuable gift you have to offer is yourself. All the things above don’t happen if you don’t have authenticity. What does authenticity look and feel like to me? It feels easy. Whisper is more than 300 people on a turnover approaching $100 million a year. High Performance is a turnover of a couple of million and ten people. The businesses are so different in terms of size and scale and what they do. But the decision-making process is the same. It’s

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based on authenticity. With High Performance it is serving more people every single day, to get them closer to their own version of high performance. At Whisper it’s creating content that helps to change the way people see the world. The final law, number five in the book, is the law of receptivity: that the key to effective giving is staying open to receiving. This causes people to scratch their heads a bit. How does that look in business? The answer is optimism. Staying open to receiving is believing that great things are going to happen.

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and the people around them. This is not to say that thinking like that guarantees it. I can understand that could sound a bit glib. But the point is if you don’t believe great things will happen or you think negative things are going to happen, it’s far more likely for the negative thing to happen or for the great thing not to happen. I have really struggled when people don’t like my constant positivity. What is the point in being any other way? I don’t see a value in thinking any other way. Because it doesn’t lead you or the people around you down a great path. Optimism is vital.

‘I want us to get away from the idea that self-made success is what we should be celebrating’ This is something that in the last three years has bound together every single person who has joined us on High Performance. He or she is an optimist. They believe that no matter how bad yesterday was, today could be better. They believe that every meeting they have might be a meeting that changes the strategy or direction of their business. That the next person who walks through the door might be someone who adds incredible value to their life. That the next decision they make could be the one that is transformational for them

The magic of The Go-Giver is that it isn’t 700 pages long. It’s a short story. It’s a story about a salesperson and how his life has changed. I’ve read it every year since because lessons from it have slipped through my fingers like sand so I try to remind myself of it. I don’t think anyone will be in a worse place for reading that book. Jake Humphrey is the host of the High Performance podcast and co-founder of Whisper Group

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If you’re hiring, this year will be a game of two halves N I K I

T U R N E R - H A R D I N G

s a firm believer in the power of putting people first, I’m excited to write this monthly column for Business Leader, offering you a candid peek into the challenges and opportunities of recruitment strategies and robust talent planning. I didn’t grow up dreaming of workforce solutions, or of being a chief executive. It was one of those serendipitous, sliding-door moments – after a stint travelling in my early 20s, I walked into a recruitment agency one day looking for a job and loved the industry so much I never left. Since then, I’ve worked my way up. My passion for making work mean more inspired a desire to take others on the journey with me so, four years ago, I took on Adecco’s most senior role in UK and Ireland. As you may have experienced yourself, they haven’t been the most straightforward years to run a company of any kind. Brexit, a pandemic, the Ukraine war, five prime ministers in six years, spiralling inflation and an approaching general election have given us plenty to think about. We’ve seen a rollercoaster of political and economic uncertainty and even last year was undoubtedly a challenging time. Economic

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growth was nearly non-existent, primarily due to high inflation and consecutive interest rate rises. This took its toll on business confidence, leading to hiring freezes, an increased reliance on temporary staff and, sometimes, redundancies. Nevertheless, there was unprecedented wage growth, as employers sought to address the cost of living crisis and talent scarcity. As the year ended, signs of a loosening in the labour market became evident with job vacancies dropping below a million for the first time since 2021. However, the market remained fairly resilient, with an increase in total employment of almost half a million positions. It’s been a mixed picture, and one that has prompted more organisations to turn to their talent partners for guidance on hiring strategies. You can see why. Against such a backdrop, it’s difficult to anticipate workforce needs in the short or long term, and the natural reaction is often to delay hiring until things settle. However, our most recent research suggests this could be a mistake. Almost half of the companies we surveyed are forecasting a headcount increase by 2025, pointing to

increased competition when there is already a talent shortage and skills mismatch. So where should you start? Key trends are emerging that are fundamentally shaping the labour landscape and that, crucially, employers have an element of control over. These include – but aren’t limited to – workforce readiness, upskilling and reskilling, flexible work arrangements, equality, diversity and inclusion policies, multi-generational workforces, digital and green skills, and the impact of AI. I can’t offer a one-size-fits-all solution, but I can tell you that it’s important to understand how these different factors impact your business. Along with strong corporate values, a well-defined purpose and an ethos of genuinely putting people first, these are the aspects that employers who want to attract and retain top talent would do well to focus on, so I’ll be covering them in more detail in future. The brightest minds are predicting a year of two halves in 2024. Lasting effects of low business confidence added to weak economic growth and continued wage inflation may well spread into the first few months, but there’s a potential turning point on the horizon, with lower inflation and subsequent interest rate cuts as early as April. A famous quote by Professor Peter Drucker comes to mind. Fifty years ago, he said: “The question that faces the strategic decisionmaker is: what do we have to do today to be ready for an uncertain tomorrow?” For every business leader navigating the UK’s tough trading environment, it’s a question that’s as relevant today as it was then. While the complexities of talent management aren’t easy, they do become less difficult with insight, knowledge and partnership. My goal is to give you a little of each. Niki Turner-Harding is country head, UK & Ireland, at Adecco

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When investors can’t tell a world-beater from a waitress Z A R A

n the five years I spent raising money for my tech start-up Gapsquare, I pitched to investors roughly 100 times. Venture capitalists, institutional investors, angels — you name it, I tried it. Despite this, I raised zero capital. Not a penny. Yet, we succeeded in commercialising our product and were ultimately acquired by a FTSE100 company. But this narrative isn’t just mine; it’s a reflection of a larger, systemic issue in the investment world. While our success story continued without investor backing, many women business owners aren’t so fortunate. The lack of investment wasn’t a reflection of a bad pitch or a flawed business idea (its value clearly proven by the successful acquisition). The problem is deeper: the investment scene is skewed against women. It’s dominated by

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N A N U

men, riddled with bias and built on systemic inequality. In all my pitching, I was mistaken for a waitress more often than I was invited to the next stage of investment discussions. This bias is reflected in the startling statistic that only 2 per cent of venture capital funding goes to companies led by women. Venture capitalists often argue there’s a lack of viable women-led businesses, yet they overlook entrepreneurs such as me, who have stood in their offices pitching innovative ideas. Investing in businesses led by women isn’t just about fairness; it is smart economics. We now have enough studies showing that women-led companies often deliver higher revenue — often twice as much per pound invested — than those founded by men. This isn’t surprising, considering women bring different perspectives, leadership styles and innovation approaches. Additionally, gender-diverse teams have been shown to be more effective and better at

Zara Nanu is a serial entrepreneur and a member of the Women’s Leadership Board at Harvard Kennedy School

IMAGE CREDIT: Adobe Stock

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problem-solving. Investors who overlook or undervalue women-led businesses are missing out on these proven benefits. The situation is somewhat better with angel investors. The UK Business Angels Association estimates that 14 per cent of angel investors are women, backing 25 per cent of women-led companies. Over the past decade, these investments have supported the growth of 1,000 businesses led by women. These successes show the potential when women entrepreneurs are given a fair chance. However, a policy change by the Treasury threatens this. The threshold for qualifying as a high net worth individual has risen from £100,000 to £170,000 annually. This will reduce the number of female high net worth individuals by nearly 70 per cent. It’s a step back for women entrepreneurs and the women who invest in them. Reversing this policy change is crucial, but it’s just the beginning. We need to create an environment that intentionally fosters diverse business ecosystems. To achieve this, we do not need less support — we need more tax incentives for women angel investors, opportunities to fund alongside banks and Innovate UK, and increased protections on retail investment platforms. As a society, we must acknowledge and address the biases in our investment culture. It’s time for intentional action to support women entrepreneurs. We have seen what can be achieved even with limited backing. Imagine the possibilities if the playing field were truly level. Investing in women-led businesses is not just a matter of equity — it’s a matter of economic wisdom. Let’s not just level the playing field but also recognise the untapped potential it holds. By doing so, we’re not just supporting women entrepreneurs; we’re investing in a more diverse, innovative, and successful future for our economy.

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Welcome to the brave new world of bio-preneurs C A S P A R

t’s 5am and I’m aimlessly scrolling through Instagram as I battle my two-hour jet lag for the sixth night in a row since a trip to South Africa. My circadian rhythm is pathetic and I don’t have enough self-control to charge my phone in another room. I’ve also broken my new year’s resolution to replace social media consumption with Business Leader articles. As the algorithm introduces me to new faces, an interesting pattern emerges. If the user I click on has more than 100,000 followers, 90 per cent of the time they have a company or six listed as businesses they have co-founded. Gone are the days of quirky one-liners, or actual biographical information. And here I am, guilty as charged, with my bio proudly flaunting three businesses and a VC. When did creators all become entrepreneurs and why is this happening? To comprehend the bio-preneurship epidemic, we need to rewind the clock to a time before TikTok. The year is 1982, a year before the Motorola DynaTAC 8000X - the first commercially available mobile phone - was released. Actor and race car driver Paul Newman launches Newman’s Own, a food company donating profits to charity. This is the start of a trend where celebrities

IMAGE CREDIT: Getty Images / Adobe Stock

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transcend their primary domains to become entrepreneurs. Elizabeth Taylor ventures into perfumes, Madonna conquers fashion and the boxer George Foreman starts grilling burgers. The trend continues with modern figures such as Jay-Z, the rapper who not only dominates music but also establishes Rocawear, Roc Nation, and an empire spanning champagne, tech, real estate, and more. While celebrity entrepreneurship is not new, it traditionally required a higher level of fame and occurred less frequently. Of course, with the democratisation of audiences created by social media, oncedistant “stars” now have a direct line to their fans, reshaping the commerce landscape. However, what sets today’s creators apart is the entrepreneurial muscle they build as they launch their channels from scratch, carrying various responsibilities such as production, editing and audience engagement. This contrasts with traditional celebrities who rely on gatekeepers. Creators do not

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wait for executives to present ideas - they proactively create. While many people have excellent ideas, transforming them into reality requires entrepreneurial muscle, some spare time, financial flexibility and being in the right stage of life to take risks. Creators usually possess all such advantages to start a business. But the question remains: do these bio-businesses work? At first a lot do but then most struggle. For a normal entrepreneur, getting that first bit of customer traction is difficult. For creators, it’s easy. They have a built-in customer base willing to support their new line of natural lipstick made from Cotswolds honey. The problem is, this gives them a false sense of traction, not actually proving any sort of product-market fit. The bigger the audience, the more difficult it is to know whether or not something is taking flight or is being artificially carried by the bio-preneurs. For some, it doesn’t matter, ebitda is ebitda, but investors beware, an artificial customer acquisition cost will make life difficult when a creator loses relevancy or runs out of fans. Magic happens when a creator finds true product-market fit while taking advantage of inbuilt marketing resources to expedite the process. The journey demands not just creativity but the ability to navigate the complexities of business. The rise of the bio-preneur marks a new era, one where creators wield not just influence but the capacity to shape industries and economies. Now, it’s time to throw my phone down and get some sleep. Caspar Lee is co-founder of Influencer.com and Creator Ventures

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Elite sport shows us how to reach the top and stay there C A T H E R I N E

ike any seismic event, the pandemic has left a lasting legacy. When it comes to leadership, this has been particularly profound. Covid-19, and the chaos and upset that came with it, wreaked havoc on the wellbeing, health and sustained performance of many leaders and entrepreneurs across sectors. And it hasn’t been limited to just that period. We are seeing a tsunami effect with increasing numbers finding that their professional lives are all-encompassing and draining. Add to this the dramatically increased pace of change due to the explosion of generative AI. And, for many sectors, there is increased buffeting caused by the fact that the foundations of the world order are seemingly being shaken. And yet strong leadership remains central to the performance of every organisation. Yes, leadership can be hard, yes it can be relentless, but how can you counteract this, to ensure that you as leader stay at the top of your game? What steps can you take – how can you operate, how can you lead – to combat this? It is a marathon, not a sprint. Business leaders are very familiar with drawing lessons from sport, particularly around “winning” and “high performance”. But we have all been missing a trick. Day

IMAGE CREDIT: Adobe Stock / Getty Images

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in, day out, sport has been showing us not only how to improve, perform and achieve, but how to do so on a sustained basis, in a way that ensures we can consistently deliver results when it matters. With my privileged view into world-class sport and top-level business, and with insights and wisdom from leading performers in both worlds, I felt called to plug this gap and to provide a fresh and dynamic take on how, consistently long term, we can bring out the best in ourselves, and in those we lead. Whilst the final catalyst that prompted me to write my book Staying the Distance was a train journey from York to London during the pandemic, the initial prompt was a fascinating research project in the world of elite sport in the Rio Olympic cycle. The Great British Medallists Study was a collaboration between UK Sport, Bangor University, the University of Exeter and Cardiff Metropolitan University. Its aim was to compare and identify differences

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and similarities in the biographies of highachieving British athletes. Three main factors were identified as important contributors to success in both groupings of athletes (elite and super-elite): 1.They were brought up in families where they were exposed to a “culture of striving”, demonstrated in one or more of the following: • an environment and expectation of achievement; • a strong work ethic; • the environment was highly competitive; • high value was placed on mastery (“being the best that you can be”) and outcome (“achieving goals”). 2. They demonstrated a very high level of conscientiousness towards sport; 3. They demonstrated a very high level of commitment to training. What has stayed with me is this focus on striving, on consciously wanting to continue to improve, whilst understanding the commitment it takes. One of the challenges is how to do so in a way that ensures performance can be sustained. That makes it possible to stay the distance. Now, through the book and elsewhere, I find myself increasingly asked to share insight on this specific area. It is a delight to shine a light on these lessons in Business Leader. I will be sharing stories from elite athletes, coaches and teams, anchoring them with cutting-edge research and business case studies, and providing practical guidance for how to use them in your own leadership. Catherine Baker is the founder and director of Sport and Beyond and author of Staying the Distance

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Five tips for politicians seeking an enterprise-friendly strategy E M M A

s we embark on a general election year, in common with many other entrepreneurs, I shall be looking for the political party that has the most enterprise-friendly strategy. For the past 20 years I have run Enterprise Nation as a growing business support resource for thousands of start-ups and early-stage businesses. It has given me a pin-sharp view of what it takes to create the ideal conditions not only for enterprising individuals to dream about starting and growing their own business but to take steps to make it happen. I know that for any party to succeed, supporting and championing entrepreneurs at every stage must be a clear and central policy. Don’t just take my word for it. Research we did earlier this year found that one in three working-age adults is thinking about starting a business in the next 12 months. That rises to 54 per cent for the 18-to-30 age group. Entrepreneurship should be broadly factored

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into policymaking; from introducing the concept of enterprise in schools, to smallbusiness friendly Budgets, right through to enabling newly created start-ups to bid for and win government contracts. Here are some pointers for the parties: Introduce enterprise at an early age It sounds simple but ensuring the topic of “starting your own business” makes it onto the school curriculum is fundamental. Research suggests young people leaving school or university now will have around 11 jobs in their careers as well as periods of self-employment or running their own business. Having an intrinsic understanding of entrepreneurship earlier could help more of our young people to succeed and thrive. The next government should seriously consider repositioning the careers service into a “careers and enterprise service” to support individuals whether they want a job or to build their own livelihood, or both. Make tax simple Once up and running, business owners can get bogged down in

admin, and paying tax is just another thing on a long to-do list. The advice we offer earlystage founders is to outsource accounting to the professionals from the get-go. HMRC’s making tax digital strategy should be extended at pace. It makes founders adopt cloud software which makes accounting more straightforward and removes the tax hurdle. They are more likely to embrace technology to increase productivity and efficiency. Buy small While this government has committed to buying more from small firms in the Procurement Act that comes into effect this autumn, it is still missing some very fundamental support to develop an active ecosystem, and therefore help firms make the most of this amazing opportunity. This could be through introductions to bid-writers, supplier-readiness training and connections to tier-one suppliers which are increasingly looking for SMEs to collaborate with on bids. Offer continuity Small businesses have faced a changing landscape of funding provision and accessibility of support since Brexit. It has led to a confusing postcode lottery of options dependent on where your business is based and the type of support provision there. With the UK Shared Prosperity Fund ending in March 2025, start-ups need some kind of tried and tested programme of support, such as maintaining the government’s “Help to Grow: Management” training and making it an accessible long-term professional course. Champion entrepreneurs Sing it from the rooftops! One of the most powerful assets at government’s disposal is the ability to shine a media spotlight on hot topics. This power can be harnessed to reference our strivers, doers and makers in speeches, on billboards and across government plans. This builds existing founders’ confidence and encourages others to follow in their footsteps. With small businesses as a powerful voting constituent, the party that gets its small business and enterprise strategy right is likely to be the party that gets to govern. Emma Jones is founder and chief executive of the small business support platform and provider, Enterprise Nation IMAGE CREDIT: Getty Images

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Sophie Austin, HR Partner at Monahans, the South West’s leading accountancy and business advisory firm.

UNPACKING THE ESG JOURNEY From looking at how we can employ ethical practices and build better relationships with employees, our clients and our suppliers, to new ways that we can make a positive environmental and social impact as a business, Monahans has been exploring how we can be a ‘better’ business for some time as part of our ESG commitments. This experience has taught us one vital lesson: ESG, ultimately, is all about transparency. The reason that we decided to pursue B Corp certification in 2023, for instance, was to gain a clearer picture of our progress towards becoming a more responsible business and to both identify areas for improvement and challenge ourselves to do better. ESG is not the reserve of a single department within the organisation. It can’t be. And that is a key point we are keen to stress with other businesses: there is no destination here, it is a journey that involves constant consideration and collaboration at each stage and every level of the organisation. Indeed, every element requires a review of current processes to forge a new way forward. But we haven’t faced this alone. For instance, when it comes to the ‘E’ of ESG (Environment) we were supported by a specialist consultancy who audited every area of our carbon consumption and helped us to set a carbon reduction target and establish an action plan to achieve it. The ‘S’ social element brought it back to the most crucial element within the ESG equation – our people. Employee buy-in is crucial for any ESG policy to succeed and we have introduced a range of initiatives aimed at encouraging individuals to think about their own carbon consuming habits and suggest alternatives. The linchpin that binds the three elements together and ensures that social issues are addressed responsibly is the ‘G’ - Governance. This includes aligning our corporate objectives with our people policies in relation to diversity and inclusion, social mobility, and creating a forum for employee feedback, Adopting an ESG approach is a demanding exercise to undertake. But the benefits are evident. Aside from it simply being the right thing to do, it is also becoming an important differentiator in the hiring process. Those entering the workplace today are increasingly drawn to businesses whose values mirror their own. The question is, will your organisation become an employer of choice for them?

01793 818300 Sophie.Austin@monahans.co.uk

Break free of the shackles of process or your creativity will be hit for six E D

S M I T H

f we could have bought shares in the concept of “process”, we would be rich today. Having leapt far beyond its sensible origins in the law – where “due process” protects against hasty errors – process has invaded all aspects of life. Grief is framed as a process. Psychoanalysis insists people commit to the process. Recruitment is process-led. (A rule of thumb: bad recruiters congratulate themselves on having followed “a really good process”.) Popular non-fiction sells us “the creative process” at £6.99 a book. Academia agonises over its grading process: an essay must be marked against often byzantine “intended learning outcomes”. After “teaching to the test”, we now have “writing to the rubric”. Decision-making is expected to follow a definable process that is laid out in advance and according to tenets, as though all aspects of life must be shuffled towards the scientific method. This creeping scientism is bound up with loss of confidence in the humanities: process feasts on the insecure longings of disciplines and domains that lack a methodology. In the absence of real science, let’s at least posit a process. Behavioural

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economics has put the boot in, too, recasting the concept of good judgment as merely bias repackaged as self-serving storytelling. Process is first cousin to another booming stock: transparency. The surest way to overturn an outcome is not establishing misjudgment but opening a fault-line according to “a failure of process”. It is a matter of time until the concept of process itself must prostrate itself to further process, doubtless in the pursuit of best practice. Managerialism has given process the greatest leg-up of all. As middle management has expanded exponentially, process is an endlessly useful ally: it creates work and fills hours, while also levelling the playing field against more talented rivals by boring them into submission. Process is the unimaginative bureaucrat’s best friend. Safely hidden in the comforting thickets of management waffle and compliance, careerists can survive for decades while making consistently poor decisions that emerged from processes which looked good on paper. As the baseball sage Yogi Berra quipped: “In theory there is no difference between theory and practice. In practice there is.” What follows is not an attack on process in all contexts but the workings out of a curious and sometimes puzzled decision-maker. “Running a process” fills time and appeases line managers. But does it really pay its way? I am not arguing that processes cannot help. In some context, in particular judicial and quasi-judicial domains, thorough process is essential to civilised values. And process can clearly catch sloppiness and filter out errors. When I was chief selector for England cricket, we had a rigorous process for picking England squads. If I am

honest, however, I would say that process was most useful at helping us to identify avoidable errors and make helpful tweaks. It protected us against acting hastily, emotionally or being reactive. But process alone did not unearth major solutions. Yes, there is value in re-examining, looking again, trying another perspective. But you also need to mine the gold first. That is the first part of my argument: process, even when it is helpful, cannot ever be sufficient. At best, it is only one part of real-world problem solving. Further, we need to know when to guard against process as well as when to attend to it. When I began writing Making Decisions, I revisited three years’ worth of notebooks from my time selecting England teams. One trend troubled me. At the beginning, ideas and solutions dominated. By the end, reminding myself not to forget internal procedures had crept into the picture – checklists of things, none of which advanced the England team at all, but which might cause professional hassle for me if I forgot them. I was still perceived as “left field”, but I had been dragged progressively into the world of process. Which is where big corporations like you to be. For their sake. But not for yours. Pushing back is only one part of it. There is also the question of protecting yourself from anti-creative environments – and people (even nice ones). There is a scene in the Italian television series Inspector Montalbano when the hero-detective is challenged by a diligent colleague for keeping him at arm’s length. Montalbano says he cannot develop solutions and ideas – which often begin as half-formed hunches he cannot explain – while being scrutinised by a hyper-rational mind. How to escape the process trap? Ownerentrepreneurs stay creative because they have the privilege of setting up things around their

IMAGE CREDIT: Getty Images / Adobe Stock

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own needs. The designer Paul Smith argued recently that the key to his success was not having an email account. An envious tip of the hat. The way we live and work makes creativity harder. Life is more observed – thanks to the dread pincer movement of open-plan offices and interminable video-conferencing – and more atomised. We are more visible than ever – through the glass door, over the glass screen – and yet more likely to be half-present at best, checking something else on another device, carving up our inattention to least displease everyone. This is the liminal space of uncreative compromise: neither socially together nor usefully alone. With advancing AI, we know that human beings’ best chance of adding enduring value

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‘Ownerentrepreneurs stay creative because they have the privilege of setting up things around their own needs’

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is to stay good at the most human bits – analogy, surprise connections, joining dots not obviously linked. Creativity. I distrust guides to “the creative process” because a genuinely creative process is significantly unknowable. But I hope we can improve the conditions where it might, with luck, break free.It takes bravery (often the quiet, unnoticed kind), but we should trust a little less in process and more in solitude. Think more, indulge our curiosity, naively follow the thread, protect freshness. Which is another way of saying that to arrive at better decisions, we might have to take on the hardest challenge of all: to live a bit better. Ed Smith is director of the Institute of Sports Humanities and author of Making Decisions

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- SIMON ARORA -

BUILDING

“This is not going to work.” Simon Arora reflects on the remarkable story behind how B&M became a £5 billion business

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n 2004 Simon Arora and his brother Bobby bought a discount retail chain in the northwest of England for £525,000. That chain had 21 shops. Today B&M is valued at more than £5 billion and is part of the FTSE 100, making it one of the biggest retailers in Europe. Simon Arora stood down as chief executive at the end of 2022 after nearly two decades at the top of the business. In a rare interview, he explains how B&M went from an ailing medium-sized business based in Blackpool to one of the biggest companies in the UK, and how it nearly all ended after just a year...

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TAKE ME BACK TO 2004 AND WHEN YOU BOUGHT B&M. HOW DID YOU KNOW ABOUT THE BUSINESS AND WHAT WAS THERE WHEN YOU ACQUIRED IT? I think the best way to answer that question is to give some context in terms of my career up to that point, because that very much sets the scene and explains the rationale. I was born in Manchester. My parents came to the UK from Delhi in 1968, I was born in 1969. They were market traders. I spent my childhood watching hard-working parents do outdoor markets. They sold handicrafts that they were importing from India and supplied members of the public through markets. Through my teenage years that changed into a small cash-and-carry warehouse in Manchester supplying independent retailers and market traders. I did well at school. They were the classic hardworking immigrants that scrimped and saved and got their sons a good education. I had the opportunity to read law at Cambridge. After graduating, I started a career as a professional in London. I had two years with McKinsey, strategy consulting, then a year with 3i in venture capital. That was followed by a year in the financial markets at Barclays as a City trader. But what that tells you is that I had three jobs in four years upon graduating. That indicates that, at heart, I wanted to be an entrepreneur. I came from a small business family. I should also mention that within our nuclear family, we suffered a bit of a tragedy when I was 17. I lost my father. He was 44. One has read about other people who suffered parental loss at a relatively early age. I think it’s fair to say that it can for a lot of people put fire in your belly – in terms of wanting to exert control on your life, as opposed to feeling completely out of control when you go through something like that. So in the mid-1990s, at the age of 25, I called my younger brother Bobby and we discussed setting up a new company called Orient

Sourcing Services Limited. The aim for that business was to import housewares and home furnishings, predominantly from Asia, and supply UK retailers, everyone from Tesco and B&Q through to the independent shopkeeper that had previously been served by our late parents’ business. However, wearing my McKinsey strategy hat, I was aware that we were a middleman. And to cut a long story short, by the age of 30, we’d sold that business. I thought at that point “job done” and set about trying to learn some hobbies and build a house for ourselves and that sort of thing. I can tell you that within a year the warm glow of having done a financial transaction very quickly wore off. I was bored to the point of desperation. That brings us to December 2004. In the run-up to that acquisition of B&M I did nothing more sophisticated than a Companies House search for retail businesses. I didn’t want to do a startup – I needed a minimum turnover of £5 million to £10 million – and I

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didn’t want to bet the bank on going into the retail sector because I was mindful that my brothers and I were importers, distributors, and whilst we had sourcing and supply chain expertise, we didn’t really know anything about retail. So we bought the business. It cost £525,000. It comprised 21 somewhat scruffy bargain shops dotted around the north-west. It was based in Blackpool. The business had a turnover of about £50 million, but was loss-making. On one analysis, if we hadn’t bought it, it was going to run out of cash within six to eight weeks. It was a turnaround, distressed situation. HOW MUCH DID YOU LEARN FROM YOUR FATHER? AND HOW MUCH DO YOU THINK YOU HAD IN YOUR DNA ABOUT BEING PASSIONATE ABOUT BUSINESS?

Above: Simon Arora, centre, with his brothers Bobby, left, and Robin,

I think it’s fair to say that even if you don’t realise it, living in a business family, even a small business family, kids pick up around the kitchen table the world of business – dealing with staff, dealing with difficult customers, finding opportunities. It just sinks in. However, I would also overlay that. One of the things my late father gave my brothers and I which was really very special was self-belief. There’s a type of parenting where there’s a tendency to criticise your kids and to perhaps undermine them. Our experience was that our late father would tell us almost on a daily basis that you can be anything you want to be. Instilling a sense of self-confidence is something that I’m grateful for. Then, obviously, you observe work ethic. Living in Manchester, working-class origins, you observe and learn work ethic. You realise that if you work hard, things get better for you in terms of your life, whether that’s a nicer house, a nicer holiday, or a nicer car.

right Left: Simon Arora says that in his 20s and 30s, he was a

HOW CRUCIAL HAS IMPATIENCE BEEN FOR YOU AS AN ATTRIBUTE? AS YOU TOUCHED ON, YOU MOVED BETWEEN JOBS. HAS THAT BEEN A KEY DRIVER FOR YOU SINCE? IS IT SOMETHING THAT PUSHED YOU FORWARD AS A CEO?

man in a hurry

You could call it impatience. If you were walking around the offices of B&M you’d see a strapline on the walls every now and then that says “Welcome to B&M speed”. What I’m referring to is that, yes, certainly through my 20s and 30s, I was a man in a hurry. But on a more serious level. I do consider that for growing businesses, disruptive businesses, it’s better to be fast and 80-90 per cent right than being 100 per cent right but slow. Another way of putting that is the phrase “If you’re going to fail, fail fast”. We consider speed to be an intrinsic part of B&M’s competitive advantage. The way to think about that is from the point at which we are offered a vacant store through to getting it shop-fitted through to the speed at which a checkout colleague gets the customer through the till. Even on the day-to-day commercial decision-making around product and pricing strategy – just be quick because speed wins. When you are competing against larger

corporates that are more bureaucratic and have more layers of management, it can be a source of competitive advantage when you are 20 shops in the north-west. HOW IMPORTANT WAS WORKING IN ORIENT TO WHAT HAPPENS NEXT? YOU TOLD INVESTORS AND ANALYSTS ON VARIOUS EARNINGS CALLS THAT THE SUPPLY CHAIN WAS THE MAGIC SAUCE FOR B&M. The way to answer that question is to go back to one of the things I learned at 3i in venture capital. When assessing whether to invest in the business, to exaggerate the point, it’s all about management, management, management. Another way of putting that is that it’s better to back strong managers in a mediocre business model than it is to back mediocre managers in an excellent business model. I recognised that a competency that my brother and I had was this sourcing and supply chain management of consumer goods out of Asia. The reason why it’s so valuable in B&M’s subsequent success is that we were able to split the roles to play to those strengths. My younger brother Bobby, he’s a couple of years younger than myself, he’d spent all his life since leaving school on exactly that -

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sourcing consumer goods and managing that supply chain. So he took on the role of group trading director and became responsible for all the product, all the prices and what quantities were brought in. Unusually for a chief exec, which was I suppose my nominal job title, I never got involved. Friends or business associates would ask me about a product that we sell or a supply we deal with. I never got involved. I left it entirely to Bobby, because I knew that in Bobby I had a world-class operator for that function. That then allowed me to have the bandwidth to do all the other stuff - be that distribution, store operations, strategy, the finance side and, for me, in particular store rollout. I was able to devote myself to a store opening programme which, with hindsight, was quite remarkable. That’s probably one of the things that I’m really proud of: B&M’s growth. I think I got to the 10,000 hours of acquiring UK shops over my 17-18 years at B&M. Perhaps I should explain what I mean by 10,000 hours. The book is called Outliers: The Story of Success and Gladwell [Malcolm Gladwell, the author] talks about whether it’s in athletics, whether in music, whether in business or academia, if you do 10,000 hours of something, you have every chance of being world class at it. From the 21 shops we acquired to the 710 stores at B&M in the UK that we had when I left, I acquired every one. I didn’t have a property director. That’s something like 15 million square feet of selling space in the UK alone. I’m told by people in the commercial property industry that no individual has ever done that. So that’s my 10,000 hours. I just got very good at it. THAT WOULD BE EXTRAORDINARY IN ANY MARKET, BUT YOU OBVIOUSLY DID THAT IN A MARKET WHERE THE RETAIL INDUSTRY HAS BEEN TURNED UPSIDE DOWN BY THE GROWTH OF ONLINE. WHAT WAS YOUR GENERAL APPROACH TO IDENTIFYING A LOCATION? So you learn from your mistakes in the first one or two years. You obsess about the topic and you soon understand what are the defining characteristics of a successful B&M. Over time it just becomes intuitive. For the first few years I would do thousands of miles in a car going around looking at sites. But with the advent of technology, and in particular Google Earth, I didn’t need to even physically visit any more. I could do it from aerial shots or on Street View just moving my little yellow man around the streets in Google Earth. Unusually for a large corporate, we didn’t run numbers in advance, we didn’t have a model or use databases. It was just an intuitive confidence that I knew what were the ingredients of a successful store. B&M DIDN’T ADVERTISE – WHY NOT? It’s a great question. The business was built over 17-18 years of consecutive revenue growth through word of mouth. That is the most cost-effective marketing and the cheapest marketing. One of the reasons we didn’t have loyalty cards or a sophisticated marketing programme or advertising campaigns is that it didn’t play to our strengths. It’s not

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something that we know or claim to have any particular competency in. We took the view that rather than having 1-2 per cent of our revenues invested in advertising, reinvest that in price. We wanted our prices to be our advert. We wanted our prices to be disruptive so that the consumer would tell their neighbour, tell a friend and tell their relatives about this new store that’s opened up in town and the prices are 20-30 per cent cheaper than what they used to. WHEN DID IT BECOME CLEAR THAT THE LOSSMAKING BUSINESS THAT YOU INHERITED WAS BECOMING PROFITABLE AND YOU WERE ON TO SOMETHING? It wasn’t plain sailing. In the first year of ownership my brother and I were horrified within six months or so that all the product we bought from our Orient sourcing days and we had filled the shops with wasn’t selling anything like as much as we thought

it would. We had made the mistake of just taking the full ranges from our previous business, putting them in the store, and neglecting the categories that we didn’t have previous knowledge of. There was an imbalance in what we were selling. I can share with you that about six months in I thought: “This is not going to work. We brought in all the products that we know, it’s selling OK, but this business is not turning around fast enough.” At the time we had a larger competitor that had been around for many years called Home Bargains, based in Liverpool, a really good business run by an extremely talented family called the Morris family. I made a discreet approach to them via their auditor that I managed to just look up the details from Companies House for and I offered Home Bargains the business, B&M, for £3 million. I thought: “We’ve sort of stabilised it but we are struggling to know how to make this a success. Maybe if we just walk away with a £2 million profit for a year’s work, we’ll

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B&M went from £3 million profit the year after the brothers bought it to £600 million ebitda last year Simon Arora, left with his wife Shaini, says they have travelled a lot since selling

IMAGE CREDIT: Getty Images

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go and find something else.” The response we got back through a third party - so it is hearsay - was: “No thanks, we will buy it from the administrator when you go bust.” Now if there’s something that’s going to put fire in your belly, it’s that. So we carried on, we persevered. Bobby and the teams put a lot of effort into those categories that weren’t so familiar to us - be that toys, be that the grocery. We made some people changes, recruited better talent, and I worked very hard on making the supply chain more sophisticated - the process from which product flows from a factory through to the shelf. A lot of IT went in to making our supply chain best in class. Together those various elements allowed us to turn the corner. I think the year after buying it, it was making about £3

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‘We were horrified within six months or so that all the product we had bought wasn’t selling’ million profit. Last year I think it made about £600 million ebitda. So it’s been a phenomenal journey, but there were lots of bumps along the way. WHAT’S IT LIKE WORKING WITH YOUR BROTHERS AND HOW IMPORTANT HAS FAMILY BEEN AS PART OF GROWING THIS BUSINESS? It’s absolutely the foundation of our success and B&M would not be the success it is today without the strength of that sibling relationship.

I’m the eldest of three brothers. I can share with you that we were taught as kids that one plus one equals 11. In other words, there’s a synergy that is achieved by working together. When I meet business people, I say that that synergy may be an incredible relationship between the chief exec and perhaps the CFO, or it might be a husband-and-wife team, or it might be two friends from school that have gone into business together. But if you can get it right, you can get a huge amount of value from it. For me, the important aspects of

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that relationship and the way that we made it work were firstly, a very clear understanding of who does what, so that you’re not stepping on each other’s toes. For us, Robin Arora, my youngest brother, was in charge of all the FMCG and grocery buying, Bobby was group training director, and I did everything else. I didn’t interfere in those other two [areas] and likewise they didn’t interfere in my side of the workload. The second aspect that’s important is trust. Without trust - either in the competency or in just how they operate ethically and in business - then you’re not going to have that synergy. Then the third, which is equally important, is an equal level of work ethic. If you have siblings in business together and there are different work ethics - there is someone who is very much nine-to-five and wanting to take

much a family affair for many years. AFTER EVERYTHING WE HAVE SPOKEN ABOUT AND YOUR PASSION FOR THE BUSINESS, WHY DID YOU DECIDE THAT IT WAS THE RIGHT TIME TO STAND DOWN? I was coming up to 18 years of being chief executive of B&M. The business had just had pretty much its best-ever year. The share price was really, really strong. Clearly investors were also perfectly happy with how the business was performing. I was of the opinion, and I remain of the opinion, that the culture was really strong throughout the business - through Exco [executive committee], through the one or two layers of middle management and all the way down to the shop floor. I was also fortunate in that around

‘Inevitably, when we were together as a family, the brothers would go off and start talking business in the middle of the main course’ four or five weeks’ holiday a year whereas somebody else is working every hour that God sends - it’s not going to work, you’re going to have tensions. I was very fortunate in that between us three siblings all three of those boxes existed for us. I also don’t want to underestimate the broader support of the extended family. So sister-in-laws - my wife, for example - all of whom sacrificed in terms of either our physical presence or our emotional presence around the family kitchen table for prolonged periods. Inevitably when we were together as a family, the brothers would go off and start having a business conversation in the middle of the main course. Our long-suffering children and spouses would just have to put up with it and roll their eyes as usual. But all the spouses were to an extent involved in various projects in the business as well. So it was very

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the boardroom table, in our chief financial officer, Alex Russo, we had a potential successor to me that was very capable. Unlike an external hire, the board was very comfortable with and investors would be comfortable with because Alex had been in the business a couple of years. I obviously worked very closely with him over that two years. Lots of boxes were ticked. Peter [Bamford], our non-exec chairman, said something really kind at my leaving dinner actually. He said that rather than sort of blowing smoke up your backside, in terms of how the business has done, he acknowledged that as chief executive of a FTSE 100 company, and quasi-founder of the business, I left on my own terms. I left at the time of my choosing, rather than at the time of a corporate governance misstep or poor trading or a share price correction. There’s never a good time. But I would say leaving when everything’s

Simon Arora is now facing a milliondollar question: what to do next?

going well, and the business is in good shape, and you’re passing the baton over to a safe pair of hands. That’s a better time than when those things don’t apply. SO HOW DO YOU FEEL NOW ABOUT WHAT TO DO NEXT? YOU SAID THAT A YEAR AFTER SELLING ORIENT YOU WERE READY TO GO AGAIN? SO HOW ARE YOU FEELING NOW?

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B&M TIMELINE 2004

Simon Arora and his brother Bobby buy B&M for £525,000. It has 21 shops in the north of England

2008

Woolworths collapses into administration, leaving hundreds of empty high street shops. B&M will go on to occupy many of these shops

2012

Private equity firm Clayton, Dubilier & Rice buys a stake in B&M. Former Tesco chief executive Sir Terry Leahy becomes chairman

2014

B&M floats on the stock market at a valuation of £2.7 billion. CD&R and the Arora brothers sell shares worth £1 billion

2017

B&M buys frozen food retailer Heron Foods for £152 million

2018

The company expands into France after buying retail chain Babou

2020

That’s the million-dollar question. So funnily enough it’s been a year. In that year I’ve pretty much taken a sabbatical from business. I did a lot of travel with Shalni, my long-suffering wife. It is only in the last few months that I’ve started to think about what’s next. I think what I’d say to you at the moment is it’s a bit of a blank page. I am still engaged by the world of business, I want to remain in the world of business and, cutting to the chase, whilst I don’t have anything

immediately in mind as yet, I’d love to buy another business. Whether that’s a turnaround or whether it’s a large business or a medium-sized business, time will tell. That’s probably not what’s important. What’s important is that I want to remain engaged by the world of business because frankly, it’s fun. This is an extract from Business Leader’s podcast interview with Simon Arora. To listen to the interview in full, visit www.businessleader.co.uk/podcast.

B&M joins the FTSE 100, the share index for the UK’s largest companies

2022

Simon Arora stands down as chief executive of B&M

2023

B&M posts annual revenues of £5 billion and pre-tax profits of £436 million. It is valued on the stock market at £5 billion

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To B Corp or not to... Is it only start-ups that care about people and planet, or do bigger businesses need to seek the sustainable badge of approval?

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IMAGE CREDIT: GETTY IMAGES

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IMAGE CREDIT: GETTY IMAGES

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Will Butler-Adams in Brompton's northwest London factory

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e are among the believers at Future Leap, a networking space and café on Gloucester Road, Bristol’s indie-shopping mecca. Forty or so people have gathered in the name of sustainability to learn about a better way of doing business. Paradoxically, the building was once home to that palace of consumer consumption Maplin Electronics. Signs of the times. The vibe is good-natured, low-key evangelism. Speakers talk of “the journey”. The audience asks searching questions about carbon footprints. “We’re even measuring the carbon footprint of every Pieminister pie,” pipes up the organiser Katherine. Afterwards people tuck in at the pop-ups. There are tables of Colombian chocolate, Sri Lankan and Sudanese food, and bread from Hobbs House, a 100-year-old family bakery that has earned a B Corp classification. That status has become the go-to seal of approval for businesses concerned about people and the planet – business as a force for good. It’s not easy to achieve – there is a rigorous assessment – but as Jon Simon, co-founder of the Pieminister, says: “It shows customers, suppliers and retailers what our brand stands for.” The B Corp community in the UK is growing like Topsy. It first came to the UK in 2015. Since then, nearly 2,000 businesses have acquired the B Corp badge that commits to people, communities and the planet. Most, it has to be said, are smaller businesses. B Corp’s hold on the mid-sized community of companies is less strong. “It has become a bit of a tribe,” says Frederik Dahlmann, associate professor of strategy and sustainability at Warwick Business School. “It has caught on at the smaller end of the spectrum. It taps into a real or perceived need to have verification of your status or your efforts.” Paul Lindley, the entrepreneur who founded the organic baby food brand Ella’s Kitchen, was an early advocate of B Corp classification when it arrived from the United States. Although he had sold Ella’s in 2013, he stayed on as chairman and it became a B Corp in 2016. At the time Ella’s enjoyed annual revenues of £80 million and directly employed about 100 people. “I see the benefit of the opportunity for like-minded businesses to collaborate and feel part of a movement helping each other and other businesses get to a better place,” says Lindley, who is now a campaigner for children’s education and welfare, as well as sitting on the board of Toast Ale, another B Corp, although he left Ella’s in 2018. “That’s a little bit fluffy, but that’s how we are as human beings. You feel as though you belong or you don’t belong.” He sees three main benefits for mid-sized businesses to undergo the arduous process needed to earn 80 points for classification. “One is the network it provides. I know Ella’s Kitchen has a mentoring scheme where it co-operates with [tea retailer] Pukka Herbs, Cook [the frozen ready-meal maker] and [petfood seller] Lily’s Kitchen. And that’s a huge benefit because they bring a different perspective. “The second is about reputation, especially for recruiting staff. If you are a growing company, you want to attract the

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best talent. If you’ve got this badge and you operate in a certain way, especially with the twenty-somethings, that makes a practical difference if you are looking for the very best people.” And thirdly: “You can protect your mission. If you are beginning to talk about mergers and acquisitions or going to the public market or attracting new finance, it’s a very clear marker about who you are. You don’t want to hook up with somebody who says: ‘Forget all of that, we are off to make as much money in the short term as possible, and it doesn’t matter what we do to the environment’.” Smoothie maker Innocent Drinks has kept its B Corp status despite being swallowed by Coca-Cola. It is blunt in its reasoning: “Coke are smart enough to know that Innocent has a unique set of values and a really clear purpose that are fundamental to our future success. So they let us get on with it.” Will Butler-Adams, chief executive of Brompton Bicycle, is passionate about the philosophical and practical advantages that B Corp status brings to the manufacturer of 90,000 foldable bikes a year. First, the philosophical argument. “We’re doing B Corp because we think capitalism, in its purest form, is not sustainable,” says Butler-Adams, who has worked at the business for 22 years and led it since 2008. “A new form of capitalism needs to be

born, which is not just looking at shareholder value. “There has to be a wider perspective, which takes into consideration people and planet. From a commercial perspective, in the light of what’s coming down the track for planet Earth, if you’re not a business that takes the people and planet into consideration, I just don’t think you’ll have any customers, you’ll be absolutely ridiculed.” You have to wonder how that approach goes down with Luke Johnson, an investor who sits on the Brompton board. According to Butler-Adams, Johnson cares for the people and the planet but is sceptical about greenwashing. So the case is against carbon. “The smartest way to reduce your carbon footprint is to have less waste,” says Butler-Adams. That means the buildings, use of gas, the packaging, the recycling. “And guess what? If you reduce waste, it drops straight to the bottom line.” Then there are the 800 employees. Butler-Adams says: “If you care for your staff, they care for you. And there’s nobody who doesn’t think we need to be competitive. They know that if we’re not able to outperform the competition, we won’t have a business.” Butler-Adams is optimistic about what more can be done. “As an organisation, we’ve only just got

1,870 300 172

Total number of B Corps in the UK

Medium-sized B Corps (based on 50-249 employees)

Medium-sized B Corps (based on £25m-£500m revenues)

Petfood maker Lily’s Kitchen runs a mentoring scheme with fellow B Corp Ella’s Kitchen, which was founded by Paul Lindley, left

C O R P S

started, there is shedloads for us to do, particularly when you start getting into your supply chain. You can go to your suppliers and say: ‘Come on, guys, we need you to change your power, we need you to pay a living wage to your staff’. And you create more pressure. There are things that are within our control. But increasingly, you need to influence things that are not directly in your control.” As a minority investor in many British and Irish companies – including Brompton – BGF (once the Business Growth Fund), found itself going down the path of B Corp certification. Roshni Bandesha of BGF says: “We wanted to hold ourselves accountable to some standards that were rigorous and consistent with how we lead with our purpose. B Corp stood out because of its ability to look at businesses’ ability to incorporate the voices of the stakeholders.” Bandesha, head of ESG (environmental, social and governance), adds: “If we are asking our portfolio companies to go down the part of certification, it is critical we try to emulate the same behaviour.” Its shareholders – HSBC, Barclays, Lloyds, NatWest and

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Standard Chartered – are unlikely to make the cut soon. There are only a few banks with B Corp status, including Triodos, the ethical lender, and a smattering of private institutions such as Coutts. BGF holds stakes in 350 companies in its investment portfolio. Eight, including Gousto, have B Corp status. Fifteen more are in the process. Bandesha believes the status does not suit all sectors. It’s much more likely to attract consumer-facing businesses. “We think it helps in building consumer brands and trust.” The aforementioned Pieminister, with revenues of £17 million, was drawn to certification as it endorsed its values to customers. Jon Simon, cofounder of Pieminister, says: “It shows customers, suppliers and retailers what our brand stands for.” Other retailers have taken advantage of the status, if not sought it themselves. Since 2021 the online grocer Ocado Retail has maintained a B Corp aisle with 1,400 products. As Ocado Retail’s head of

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sustainability at the time, Jo Cameron saw how hard it was to give products a sustainable seal of approval. Yet the data analytics, which showed customers searching for the word “eco”, pointed to a demand. Introducing the aisle gave those customers a destination. “The only thing that we could think of to identify a good product was highlighting it had been made by a company that was B Corp certified,” says Cameron, who now runs her own sustainable food consultancy. Chris Turner is the executive director of B Lab UK, which runs B Corp certification in the UK. If the media are talking about B Corps, it’s usually because a business, such as Brewdog, has attracted some bad headlines. The brewery and pub owner decided not

Below: Jon Simon and Tristan Hogg say B Corp status endorses the values of Pieminister

‘If you’re working for a B Corp company that really means something’

to continue its certification at the end of 2022. However, Turner has much more on his plate. He is leading the Better Business Act campaign, which seeks to end the primacy of shareholders in section 172 of the Companies Act. Instead, businesses would commit themselves to the triple bottom line: people, profit and planet. Not only that, the certification process itself is under review. Turner doesn’t think mid-sized businesses should be deterred by the process and demands of B Corp certification. “Medium-sized businesses have the additional size and complexity to make integration and embedding of B Corp principles a more complicated ask. But that makes having a B Corp framework even more valuable,” he says. Like Paul Lindley, Turner stresses the benefits of “being part of the community of businesses that are B Corps, and learning from them, being able to share and exchange ideas”. Like Butler-Adams, Turner highlights the process of becoming a B Corp – “the actual work that goes into completing the assessment, getting everyone on the same page, then having a framework to make improvements that focus on people and planet and positive impact”. Of the many arguments in favour of B Corp certification, Brompton’s Butler-Adams provides perhaps the strongest – and one that could be key to encouraging bigger business to sign up. It’s not about customers, he says. “Most people, when push comes to shove, will buy what they think is the best product at the best price. Any of the B Corp stuff is a little cherry on the top that makes them feel good. “It’s not a key decision-maker. But for your staff, it is. It means a huge amount to the staff to feel like they’re committing their lives to a business that actually cares and isn’t doing nasty things. And if you’re with a company where you can say our company is a B Corp, you know that really means something. “The biggest value, notwithstanding the waste reduction, in the hearts and minds department is for our staff – by a long way.”

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Waste not, want not PEOPLE POWER “The model is driven by the dedication of more than 100,000 volunteers who collect surplus food from major retailers such as Tesco, Iceland and Holland & Barrett. We also have 50,000 equally passionate ambassadors who help to spread the word. Olio thrives as a people-powered movement.” REMOTE FIRST “This is invaluable. With no office, our 70-strong team collaborates across the country. This strategic choice not only allows us to attract the best talent without being bound by geographical constraints.

‘It’s not just about waste, it’s about recipe for a more caring and sustainable world’ The co-founder of Olio, Tessa Clarke, explains the sharing app’s business model to Patricia Cullen

FOUNDED BY WOMEN “We’re a rarity in business but this distinction shapes how we tackle challenges and is our ultimate ingredient.”

THE MISSION “We dream of a world without waste. And it turns out that more than seven million like-minded individuals share the same vision. This vision paints a landscape where communities are intricately connected, choosing to share rather than shop, and embracing generosity as a replacement for disposability. Olio is a dynamic force actively shaping a sustainable and communal approach to consumption.”

essa Clarke and Saasha Celestial-One founded Olio, an app for neighbours and businesses to fight waste by sharing surplus food, in 2015. Now seven million users use its platform to give, get, lend, borrow, or buy and sell items, helped by 104,000 volunteers. Clarke, the chief executive, shares the ingredients that have helped drive Olio’s rapid growth.

War on waste: Tessa Clarke’s food-sharing app has attracted seven million users

“It has also been pivotal in nurturing diversity: we are 59 per cent female, 29 per cent LGBTQ+, 24 per cent ethnic minority, 38 per cent neurodivergent, 24 per cent from a lower economic background and 6 per cent with disabilities.”

since 2015

VALUES “Embedded in our very fabric are four fundamental values — we are inclusive, resourceful, ambitious and caring. These values aren’t printed on mugs or mouse mats, they are truly etched into the soul of the business. They shape the recruitment processes, gauge performance and assist us in navigating complex business decisions They form the foundation upon which Olio stands. A vision of a sustainable, waste-free world.”

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‘I worked for one of the best marketeers who walked the Earth’ The celebrity chef Jason Atherton has conquered the world with his stellar restaurants. Andrew Lynch asks him what secrets he discovered in the kitchen that brought him success in business – from a famously expletive-happy boss

What have you learnt as a chef that you have used in business? The number one thing about being a Michelin chef is that you have to maintain impeccable standards of discipline. If you don’t have laser-focused discipline in business, it’s extremely difficult. If you take your eye off the ball for a single second, or don’t constantly try to innovate or look at new ways to keep your business at the top of the pile, there are always people trying to take your position. Cooking at an elite level on a daily basis keeps you super-disciplined and super-focused.

And working with people?

ason Atherton has built an international fine dining empire with a dozen restaurants around the world including his Michelin-starred Pollen Street Social in Mayfair. After working with Pierre Koffmann, Nico Ladenis and Marco Pierre White, Atherton joined Gordon Ramsay, working in Dubai and London, where Ramsay opened Maze. After striking out on his own in 2010, Atherton, 52, opened Pollen Street Social the following year. Most recently, he opened Row on 45 in Dubai’s Grosvenor House. He plans to open three more restaurants in London this year.

Again, when you work in elite kitchens, they are tough places. And there is no getting away from long hours in tough places. When you do go into business, you must be able to work hard, put the hours in and have the dedication needed to be at the very top – and those elite kitchens teach you that. It makes you resilient and if you become a good leader in the kitchen, there’s a very good chance you can become a very good leader in business because you apply the same principles. You lead from the front. The classic saying is never ask someone to do something you are not prepared to do yourself. Thirtyfive years ago I started washing pans in a restaurant. So, if I am prepared to wash pans, then I have the right to ask somebody to wash the pans for one of my businesses.

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‘You can have a fully-booked restaurant and lose money if you don’t manage the margins’

Dolorum et praesentium laboriosam

And handling finance?

eum minus deleniti.

In restaurants the margins are tight. Everyone looks at a successful restaurant and thinks the margins must be amazing, your restaurants are full, you are making loads of money. Well, you can have a fully booked restaurant and lose money. I know, people find that hard to believe. That is because you don’t manage the margins. Every head chef in the kitchen always believes they need more chefs. Every sommelier thinks they need one more sommelier. Every bartender thinks they need one more bar staff. What I’ve learnt from the discipline of being a cook is that you must apply the same discipline to your numbers. It’s down to mathematics, what I call the four twenty-fives: 25 per cent should be spent on staff costs, 25 per cent should be spent on food and beverages; 25 per cent on overheads with no more than 10 per cent on rent and rates; and 25 per cent should be your margin – what you’re making. Every time you give a percentage of that back to the business or the staff costs or renegotiating with the landlord, it’s money coming out of your pocket. I have worked for some people who ran on a five per cent margin. The problem is with that is that the minute the economy turns like it has done in the past two to three years, with inflation and wage increases and customers’ resistance to price rises, you find yourself in a very precarious position, where you go from a profitable business to a lossmaker. I make sure we have robust margins, not because we want to make loads of money, but to make sure the business is resilient to economic downturns. That’s being disciplined.

I worked for one of the best marketeers that ever walked the Earth. And that was Gordon Ramsay. The guy is just insane to watch. I was very fortunate to be one of his righthand men for 12 years. I watched him rise from somebody who starting to get well known to being a worldwide phenomenon. It was perfect timing for me. His commitment to expanding his “Brand Ramsay” was incredible. I saw the power of media, the power of television, the power of the press – and now social media – and how effective they are in marketing your business. It’s not just about being famous, it’s not just about wanting to be stopped in the street for your autograph. It’s about the brand every time you open your mouth about a product, a business or the latest trends, or even doing a simple recipe online. I remember during lockdown, my wife Irha said to me:

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Recipe for success: Jason Atherton plans to open three more restaurants in London this year

what are we going to do? I said: we are going to cook because that’s all we know how to do. We are going to share our knowledge through Instagram. We are not going to get anything for it. But what we will do is build up brand equity so that when we do go back to work that brand equity will be there. Those people will come to our restaurants and support us. And that is exactly what happened.

IMAGE CREDIT: Getty Images

What about marketing?

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What tells you things aren’t going right? What can happen in a kitchen when you have people who are not in tune with the business? Sometimes you get chefs adamant that they want to put something on the menu. I say: OK, I tell you what, you can write the tasting menu, I’m going to allow you to do that. There was one particular chef, he wrote it like a chef for chefs. He had things on there like sweetbreads, cockles – stuff that chefs would love to eat but the general public wouldn’t. We put it on for a week. Our sales of the tasting menu went down the toilet. The trouble with that is our tasting menu is a lot more expensive and we make a profit out of it and people enjoy it. I got all the data out and said to the chef: if this was your own business, you’d have lost more than £75,000 worth of turnover in that one month alone because you want to cook that style of food. You have thrown all of your wage costs down the toilet. If you continued to work like that, you’d be bankrupt in six months. We’re going to put sea bass, scallops, lobster trimmings, a nice lobster bisque on the menu. All the stuff that’s recognisable to the British public who deem those products a luxury – and what they treat themselves to when they go out to dinner. We wrote the menu, put chocolate on the dessert. I told him: you may think it’s boring, but for the general public who go out every three months to a Michelinstarred restaurant such as ours, that’s what they want to eat. We put it on and the very next day we skyrocketed back up. You never ever write a menu for yourself, you write it for the public you’re serving. I went online every day at the exact same time, teaching people how to make recipes out of store cupboard ingredients and made it entertaining. People were tuning in and we got an amazing following. And it worked a treat when we reopened the restaurants. Everyone came in and said: “Oh my God, your lockdown videos saved my life!” That’s the power of marketing.

Most admired boss? Gordon Ramsay. He taught me not just how to be a chef but a true restaurateur. He gave me my first break on TV. He’s an absolute legend.

Most admired business? The Union Square Hospitality Group in the US under Danny Meyer. I am a massive fan of his. And in the fine dining world, Thomas Keller.

LUKE LITTLER

Tips from the rise of darts prodigy Luke Littler came agonisingly close to lifting the most prestigious prize in darts. The 17-year-old may not have won the PDC World Darts Championship final, but Luke “the Nuke” captured the public’s hearts. A remarkable feat for someone of any age, Luke’s achievement offers some valuable lessons. BE FEARLESS According to Rob Maul, The Sun’s associate sports features editor who has covered 13 World Darts Championships, a sense of fearlessness was essential. “The bottom line is he's gone into that world championship and not given a toss really,” says Maul. “He’s gone in there and he's been able to throw his darts with a lack of inhibition and as a consequence, he’s managed to shock more experienced pros.” Phill Barrs, owner of the Online Darts platform, adds that Luke’s age contributed to his ability to maintain a care-free attitude because “there’s no scar tissue”. SEIZE OPPORTUNITIES Luke only left school last year and has no GCSEs, but his story is all about opportunities, says Sky Sports pundit and former professional darts player Wayne Mardle. “If people have opportunities and they don’t take them, they could regret it forever.” FIND THE RIGHT SUPPORT Throughout the tournament, Luke was cheered on by his mum, dad, sister, grandparents and 21-year-old girlfriend. Dr Jo Perkins, a psychologist with more than 20 years’ experience, says: “From what Luke was saying, that psychological letting go and being able to immerse yourself, without any worries, in the comfort of your support group is such an advantage.” ENJOY WHAT YOU DO Barrs says: “You see certain players – and in life in general – take things too seriously and worry about stuff too much.” Luke took everything in his stride throughout his world championship run, he adds. Following victory over his hero, five-times World Darts Champion Raymond van Barneveld, the darts prodigy said: “It's unbelievable. I don't know what to say. I've done it. I fancy myself. I do fancy myself.” – James Cook

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The art of wargaming How to stage a corporate crisis – and ensure no executives are harmed in the making of it.

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t’s 8.30am and a team of senior managers arrives in a City boardroom to be greeted by a table groaning with croissants, Danish pastries and Colombian coffee. The managers have no idea why they have been called in. The phone rings and a voice at the other end says: “You are now in a cyberexercise.” A well-known BBC presenter appears on the television screen which has stirred into life on the wall. Share prices are tumbling around the world, she reports. Unfolding before their very eyes is a crash worse than Black Monday in 1987. What do they do? Welcome to the business wargame. That scenario to encourage thinking out of the box and teamwork kicked off a wargame devised by John Curry, a senior lecturer at Bath Spa University specialising in games development and cybersecurity, who has worked for the Ministry of Defence and the Pentagon. He explains: “The biggest impact is making them really think about this sort of crisis, consider things which they wouldn’t normally consider . . . and they start sooner and react faster.”

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Shaking up a few City types is a long way from wargaming’s Prussian origins when in 1824 Lieutenant Georg von Reisswitz was asked to demonstrate his kriegsspiel or wargame – a development of his father’s work – to the Prussian royal family, winning them over in the process. Technology aside, the purpose remains much the same. As Pia Kirkland of Cognosis, a London strategy consultancy that has been called in by Diageo, InterContinental Hotels Group and Red Bull, says: “Ultimately, it’s used to simulate competitive scenarios to test strategies and analyse potential outcomes. The beauty of wargaming is that it enables you to do all those things in a controlled and risk-free environment.” Although business wargaming has been closely associated with crisis management, its

applications go far beyond this: from devising the strategy for a product launch to taking on a new competitor in the market. The game could last a few hours or several days, but the most important work in a wargame occurs before a scenario has even been discussed. Who should be involved in a wargame? Kirkland recommends not only a mix of leadership from across the business (from marketing to operations) but different levels of seniority too. She says that the company may be missing out by not including junior staff who can “challenge the status quo and bring that fresh perspective”. Curry, on the other hand, splits his games between practising decision-making for senior management and more granular technical exercises.

‘The biggest impact is making them think about a crisis, consider things that they wouldn’t normally consider’

F E AT U R E

Once an objective is agreed on, companies focused on competitor wargaming such as Cognosis prepare a 360-degree view of the competition. This includes interviews with ex-employees, customers and suppliers, and analysis of product quality testing, Companies House data and technical and patent reports. Kirkland likens this to an actor needing a script to perform a role. The research is used by a panel of independent facilitators or umpires, sometimes with industry experts in the chosen or affected fields, to oversee the game and ensure its accuracy. Kirkland describes a game Cognosis ran for a global home improvement company whose UK operations were under threat by a big-spending American competitor entering the market. The managing director was aware of the threat and feared the board’s usual response wouldn’t be radical enough. According to Kirkland, Cognosis analysed the competitor to “understand what their strategy and portfolio was in other markets and what they were likely to bring to the market”. On the first day, the room was filled with the competitor’s branding and stationery and the gamers mapped out its three-year strategy. The following day, the game shifted to the client and how they would mitigate the threat posed by the competitor’s newly formed plan. “It actually led to quite a step-change in terms of how they operated in the market,” says Kirkland. This wargame led the company to restructure their leadership team. They brought in a new head of customer experience – an area they hadn’t really developed – and invested in new technology. These radical changes slowed the competitor’s growth and allowed the board to challenge its assumptions by seeing through their competitor’s eyes. While this sounds like an easy task to imagine, a well-run wargame does much more than that. It reveals new threats or blind spots. Take the fair coin concept. Flip a coin and half the time it will come out heads and half tails. But what if the coin lands on its end? Peter Perla, author of The Art of Wargaming, has seen this happen with his own eyes. He worked as a defence researcher at the Center for Naval Analyses thinktank in Arlington, Virginia, for almost five decades and has a doctorate in mathematical statistics and probability from Carnegie Mellon University. “When I saw that happen,” says Perla, “I realised that if you’re going to have a probability distribution over an event, you need to be able to include all the possible

‘We sit down at the end of day one and look at the strategies we’ve built. Where are the threats now based on that?’ results of that event – even things that you might think of as totally impossible, because if you assume they’re impossible, you will never predict them.” One of these seemingly impossible events may be a global giant such as Apple suddenly launching in your company’s sector and taking over the market. And while wargaming is a brilliant tool for thinking outside the box and team building, if no actions are taken after the exercise, it’s a waste of valuable time for employees. “Typically,” says Kirkland, “we’ll sit down with the participants or the execs at the end of day one and look at the competitive strategies we’ve built. Where are

the threats or where are the holes now in our strategy based on that?” Curry jokes that like any good facilitator or primary school teacher, “you have to get the children to come up with the answers themselves”. Kirkland stresses that companies of any size could benefit from using wargaming. Curry agrees, even if it’s just a simple exercise with an industry expert. The example he gives is of a major supplier that has gone into insolvency. “How do we find a replacement product? Oh, and by the way, we really want to have it on the shelves tomorrow. That’s a simple ten-minute game. When you’ve done a few of these, you help build the mental agility to deal with these crises, which can be invaluable in the future.” How effective are wargames in predicting the future? In the case of Cognosis, pretty effective. Kirkland reveals that on average half of what they predict in wargames comes to fruition within three years. But Perla is quick to dash one of the most common myths he hears about wargaming – that they predict the future. “These games predict how people might behave given certain circumstances, but they really can’t lead you to a measurable way of predicting the future. Not the games, but the participants of the games. Wargames don’t predict the future, wargamers do.”

RECOMMENDED READING Pia Kirkland

The Art of War by Sun-Tzu. A classic book on military strategy and tactics that despite being written 2,000 years ago is still relevant today and highly applicable to the commercial world. Many of the principles in the book, such as the importance of understanding the enemy, value of positioning and timing, can be applied to commercial wargames. I often quote the book in briefing sessions ahead of wargames. “If you know the enemy and know yourself, you need not fear the result of a hundred battles” is a fantastic quote highlighting the importance of competitive intelligence and foresight. Inside the Competitor’s Mindset: How to Predict Their Next Move and Position Yourself for Success (Management on the Cutting Edge) by John Horn. It provides

a range of frameworks and tools for collecting competitor intelligence and anticipating their future moves. Horn highlights the importance of focusing on the “why” of a competitor’s move and not just on “what happened” for predicting what they will do next.

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Why everyone was just wild about Larry I

was interviewed by Oracle founder Larry Ellison and his British right-hand man, Geoff Squire, in September 1984, just after starting a PhD at Sheffield University on distributed databases. We sat in a pub in Richmond-upon-Thames and discussed their plans for just over an hour. I was offered a job on the spot. I became one of Oracle’s earliest employees in the UK. In the early 1980s, few technology companies were around – nobody knew Oracle. We fought hard, and every one of our wins was against either the mighty IBM or Digital Equipment Corporation, or pretenders such as Ingres and Sybase. Growing Oracle in those days was like fighting and winning against today’s tech giants, Amazon, Apple, and Meta. When I joined, Oracle’s global revenues were $12.9 million. When I left, they were $2.97 billion and the combined revenue of the business groups I co-founded was around a billion dollars. Ask people who worked at Oracle when Larry was around, and they’ll tell you it wasn’t plain sailing. But it was always exciting because we were on a mission to take on IBM and Microsoft. Oracle was the most

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disruptive company on the planet in those days – we went against the grain to achieve incredibly challenging results. It required a great deal of courage, perseverance and resilience. As we fought our way to the summit against all odds, many of us discovered the secret to unlocking the true warrior within us: we turned our biggest weakness – fear – into our greatest strength and became unstoppable. I’ve thought a lot about why Oracle became so successful and concluded that it is because of Larry and Geoff. Larry had the energy, vision and personality to propel Oracle forward. Geoff helped Larry build Oracle and rescued the company from bankruptcy

hold on to people for your own benefit. When Marc Benioff said he wanted to start Salesforce, Larry invested his own money to help Marc. I have been very fortunate to observe some of our generation’s most celebrated leaders, including Mother Teresa and Nelson Mandela, and worked with some legendary business leaders over the past four decades. I came across Mandela at Harvard Business School in the 1990s. In a talk he delivered on leadership, he said: “Successful leaders talk less, listen more and do more.” It remains the lens through which I see leadership today. What separates Oracle from the rest is that it has an asset that no other

‘Ask people who worked at Oracle and they’ll tell you it wasn’t plain sailing but it was always exciting’ in 1990-91. Larry hired hundreds of superstars, but Geoff was his best. Both created a talent factory in Oracle. One of the ways Oracle defied conventional wisdom was that Larry rewarded and compensated people who helped the company achieve its goal. While Larry has the reputation of being a tough taskmaster, he created countless multimillionaires within Oracle. The other was the belief that you shouldn’t

company could match. It’s Larry Ellison, a brilliant leader. I wouldn’t trade working for Larry Ellison or Geoff Squire — and I don’t know anyone in Oracle who would. What I learned in ten years at Oracle would have taken 30 years in Citi, McKinsey, or Goldman Sachs. Sukhendu Pal is chairman of management consultant Sirius & Co

IMAGE CREDIT: Getty Images

Sukhendu Pal looks back at the decade he spent at the heart of database giant Oracle under a brilliant chief executive

B U S I N E S S

L E A D E R

Seven invaluable lessons I learnt working at Oracle ONLY EXCELLENCE MATTERS I promoted talent to positions of power long before it was cool and trendy. I didn’t care about gender, race, creed, or colour. I divided the world of talent into “smart people” and “rubbish people”. It was that simple. VANITY HAS NO PLACE A person’s vanity goes hand in hand with his lack of knowledge, and we ensured there was no place for it in Oracle. THERE WAS NO HIDING PLACE You either performed or you were out – period. There was nothing in between at Oracle. NO TIME FOR REHEARSAL Life at Oracle wasn’t about wasting time finding yourself but swiftly creating yourself. Speed of work was of the essence – you must be good enough to perform immaculately on stage without rehearsal.

INNOVATE OR DIE Innovation wasn’t about making a slightly better status quo. It was about jumping to the next curve. So, you better innovate or disappear.

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A G AI N S T

Legendary leader: Larry Ellison was a tough taskmaster but created countless multimillionaires

T H E

G R A I N

ORACLE’S MILESTONES 1977

Launches as Software Development Laboratories

1982

Renamed Oracle, codename provided by first client, the CIA

IGNORE THE ‘WE HAVE ALWAYS DONE IT THIS WAY’ SYNDROME It’s easy to fall back into routines and mindlessly follow them. We never let ourselves become slaves to the rules. Many people think they can’t innovate because the parameters of their job are too constrained. I, like many of my colleagues, found inspiration in constraints.

1986

RESULTS COUNT Larry was obsessed with results, which made Oracle successful. He believed that success is measured by the company’s ability to deliver results and achieve its goals. He set aggressive targets and held us accountable for achieving them.

2014

Lists on Nasdaq

1987

Tops $100m in annual sales

1991

First fiscal loss after being sued over false earnings forecasts

Ellison steps down as chief executive to become executive chairman

2023

Oracle revenue hits $50bn

M A R C H / A P R I L 2 0 2 4 /// 4 7

From Airbnb to Netflix and Nintendo, some businesses ended up looking very different to what their founders initially envisaged. Here is our list of the top strategic pivots of all-time:

J AM E S

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C O O K

AN D

AL I C E

C U M M I N G

IMAGE CREDIT: Getty images / Movie Stills

The top business pivots

R AN K I N G S

Airbnb Founded in 2008 as Airbedandbreakfast.com, Airbnb’s initial concept was to provide a housing solution focused on conferences by offering an airbed and breakfast in short-term accommodation. To pay off $30,000 (£23,649) worth of credit card debt, the founders developed Barack Obama and John McCain-themed cereal boxes during their 2008 presidential campaigns. Advertised as limitededition collector items and selling for $40 (£31.53) a box, the company remained afloat, impressing investors and securing $600,000 (£472,986) in funding by the end of the year. In 2009, the name was shortened to Airbnb after the transition to listing rooms and properties for travellers looking for cheaper accommodation. During the Covid-19 pandemic, the company expanded its offering, pivoting its product line in 14 days to offer online experiences. Now with more than 800 experiences, two million guests per night and a $26bn (£20.5bn) valuation, Airbnb has thrived since the initial concept. Airbnb founder and chief executive Brian Chesky, right, said: “Every single opportunity is a moment we have to pivot and move fast.”

‘Every single opportunity is a moment we have to pivot and move fast’

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Founded in 1912, Kutol began as a wallpaper cleaner to remove the black residue coal heaters left on walls. However, with the increase in popularity of oil and gas heaters in the 1950s, demand for wallpaper cleaner fell. Its fortunes changed when one of the founder’s sisters-in-law, a kindergarten teacher, discovered the product could be used for modelling products, and tested it with the children in her class, who loved it, and suggested the name Play-Doh.

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According to Fortune, Play-Doh has sold more than three billion cans since its debut in 1956. Owned by Hasbro from 1991, the product line has expanded to include Zoom Zoom Vacuum and Clean-up Toy, Airplane Explorer Starter Set, and a variety of different textured slimes such as Foam and Crystal Crunch. In 1998, Play-Doh was inducted into the US National Toy Hall of Fame, underlining the success of the product.

IMAGE CREDIT: Getty images / Movie Stills

Play-Doh

R AN K I N G S

Fusajiro Yamauchi founded Nintendo Koppai in 1889 to produce hanafuda playing cards

Suzuki The Japanese motor vehicle manufacturer Suzuki was formed in 1920 as the Suzuki Loom Manufacturing Co, 11 years after founder Michio Suzuki pioneered a new textile loom design. Suzuki sold his patented design to local people and grew rapidly. In 1937, he began to diversify and started designing his first car, but plans were shelved after the breakout of World War II. Transport development eventually continued after the cotton industry crashed in 1951, with Suzuki’s son, Shunzo, joining him. Shunzo realised he could make his daily cycle ride much easier with an engine and by 1952 the “Power Free” 36cc motorised bicycle had gone into production. Suzuki Motor Co was formed in 1954 and production of Suzuki’s first car, the Suzulight, commenced a year later.

Groupon In 2007 Andrew Mason co-founded ThePoint, a tipping-point based collective action website dedicated to getting people together to accomplish local philanthropic and community goals. When looking to drive revenue, the company soon realised some of the most effective campaigns brought customers together to gain collective buying power at local businesses. It began featuring a side blog that offered readers a different deal from various vendors every day. This aligned with consumers’ cost-conscious habits during the 2008 financial crisis and Groupon – then called Getyourgroupon.com – was born. The first Groupon was a two-for-one pizza deal and by 2011 the company was valued at $16bn (£12.5bn). Groupon now offers thousands of local experiences, services, goods and travel.

Nintendo Fusajiro Yamauchi founded Nintendo Koppai in 1889 to produce hanafuda playing cards. In 1964, the playing cards began to lose popularity with a reported stock fall from 900 to 60 yen following the Tokyo Olympics, says Adam Sutherland, author of The Story of Nintendo. The decline caused Nintendo to try a few different business ventures, such as a taxi service and a “love hotel”, before reinventing itself as a videogame company in the 1970s. Creating the Game Boy in 1989 was revolutionary as the first portable handheld game system with interchangeable game cartridges, whilst Nintendo’s latest console, the Nintendo Switch, has sold more than 132 million units since its 2017 release. Expanding to become one of the world’s most well-known brands, Nintendo finished 2023 with an operating profit of $3.8bn (£2.98bn), according to its financial briefing at the end of the year.

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Slack Slack was originally formed to create a collaborative, non-competitive online game called Glitch. But by the fourth year of building, its co-founders were considering changing direction. Work on the game stopped because they would have had to raise more money, according to comments from co-founder and chief technology officer Cal Henderson in 2023. The co-founders spent “about eight days” brainstorming ideas before deciding to utilise the collaboration tools they had built to work on Glitch, believing other small technical teams would benefit from them too. After managing to keep all their existing investors, they eventually convinced people to try the product, which informed much of what the cloud-based chat platform eventually became.

Nokia began as a wood pulp mill in Finland in 1965. Its second mill opened three years later in a town called Nokia, from where it would later take its name. After World War I, Nokia was bought out by Finnish Rubber Works, a maker of galoshes, hoses and tyres. They were subsequently acquired by Finnish Cable Works, an exporter of telephone and electricity cables to the Soviet Union, marking the beginning of Nokia’s electronic venture. In the 1960s, Nokia transitioned into telecommunications and in 1982 introduced its first carphone, Mobira Senator, and in 1987 its first handheld mobile, Mobira Cityman. The company became solely focused on telecommunications. In 1999, Nokia released the Nokia 3210 and 3310 mobiles, which each sold more than 100 million units.

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IMAGE CREDIT: Getty images / Movie Stills

Nokia

R AN K I N G S

Netflix US streaming giant Netflix began life as a DVD-by-mail movie rental service in 1997. By 2005 the company was posting one million DVDs a day. However. in January 2007, Netflix launched a streaming media service via the internet. At the time Netflix had just 1,000 films available for streaming compared to 70,000 on DVD. The following year, its DVD disc subscribers were given free access to unlimited streaming. By 2009, streams had overtaken DVD shipments and Netflix never looked back. Fast-forward to today and the company is the biggest video-on-demand streaming media service with more than 247 million users. It now produces its own content, such as The Crown and Squid Game, and stopped renting out DVDs completely in 2023.

Nokia began as a wood pulp mill in Finland in 1965

SKOOT

Prove

SKOOT was founded as a carbon-negative ride-sharing app with a focus on sustainable mobility. It utilised technology to reduce congestion and pollution by facilitating shared journeys and planting trees for each ride taken. After the Covid-19 pandemic, SKOOT adapted its focus to offer a B2B platform to help bring people back to work. During this time, SKOOT recognised a demand for broader sustainability services. A national survey by SKOOT and pollster YouGov found that 77 per cent of adults believe restaurants should increase sustainable efforts. This transition caused SKOOT to develop an eco-contribution model in the hospitality industry, which is a tool for businesses to facilitate sustainable practices by encouraging people to “SKOOT” instead of tipping.

Prove was founded in 2008 as Payfone Inc, a mobile tech start-up that allowed users to pay for goods using a phone number. In 2013, Payfone secured private equity and began its pivot to the identity verification and authentication platform it is today. The company remained out of the public eye for two years to develop Identity Certainty, which verifies a mobile phone user is the owner of the underlying bank account. In 2020, Payfone rebranded as Prove. “The decision came from the need to update a legacy name after successfully pivoting from a mobile payment company with a much slimmer scope to one with an expanded focus on solving digital identity challenges for a much wider market,” CEO Rodger Desai said. Prove passed the $1bn valuation mark last October.

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The Rise and Fall of Yellow Pages Once the go-to resource for consumers seeking expert help, the printed directory failed to adapt to a digital revolution it could have helped to lead

PAT R I C I A

C U L L E N

//// Illustration: Nick Thackray ////

ellow Pages used to make life easier for everyone. By sorting businesses alphabetically into categories, it streamlined finding products and services and changed how small businesses reached customers. But after being a permanent fixture in British households for more than 50 years, the final version of the print edition of Yellow Pages was delivered in 2019. A staple of British households shifted entirely online under Yell.com.

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C A S E

S T U DY

M A R C H / A P R I L 2 0 2 4 /// 5 5

Adaptability had been ingrained in the DNA of Yellow Pages from the early days. In 1983, John Condron, who headed marketing and went on to become chief executive, outlined the directory’s limitations. It was “a place you turned to if somebody broke your window or your plumbing packed up”, he said. Condron saw an opportunity for change and to increase its usage. The company launched a new advert that marked a considerable change. “Good old Yellow Pages. We don’t just help with the nasty things in life, like a blocked drain. We’re there for the nice things too,” said the voiceover. The publication also forged a partnership with British Telecom in 1984, sparking a period of expansion that saw the introduction of more than 70 local editions. However, as the digital era exploded in the 1990s, online search engines such as Yahoo! and Google started to revolutionise how customers sought information. Yell.com was launched in January 1996. But this rebranding failed to boost revenues and the company was also left with substantial debts after expansion into the US and Spain. It tried various partnerships with other businesses, including a 2005 joint venture

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‘A place you turned to if somebody broke your window’ with Google that integrated local classified content into its search engine. Yell also underwent several leadership changes. Condron and John Davis, Yell’s finance director, quit in 2010. Dismissing claims they were jumping ship, Davies told The Guardian: “I don’t think either of us would have chosen to leave if we didn’t think that the business was in good shape.” In 2012, Yell Group opted to rebrand as Hibu. The new chief executive Richard Hanscott told Marketing Week that changing the name “was very exciting” and people “understand the fresh new identity and our strong legacy with local business”. However, the company reverted to Yell in August 2014. The final edition of Yellow Pages was sent

to print in 2018. Hanscott said that revenues from printed directories had declined 37 per cent. But traditional users were still disappointed with the move. Claire Miles was appointed chief executive in 2019 and said she was “impressed by how it’s been successfully reinvented in digital”. The company looked to introduce monthly subscriptions but in 2020 Yell’s head of recruitment confessed there are “one in three customers leaving us each year, one in four customers complaining about us, and a range of poor reviews across a variety of external platforms”. Yell described its performance in 2023 as “very disappointing”. The parent company,

C A S E

Yell Holdco Ltd, reported a 6 per cent drop in annual revenues to £111 million and a 44 per cent drop in underlying profits to £13.4 million for the year to the end of March 2023. Average monthly visits to the Yell platform fell 13.3 per cent to 7.2 million. The competition is now fiercer than ever, with younger generations turning to Google Maps, Facebook, Instagram and other social media sites to search for online businesses. However, Yell “could and should have been Google before Google”, according to David Pattison, who has more than 30 years of experience in scaling and restructuring companies and is the author of The Money Train. “With little competition, it was easy to just keep doing what they were doing but they

‘Yell could and should have been Google before Google’ should have invested in the coming digital opportunities much earlier and didn’t,” he said. “It was such a recognisable platform, but they chose to return profits to shareholders rather than invest and innovate. I can see why at the time but that is why they are where they are. A narrow business in a narrow sector.”

S T U DY

Mikko Arevuo, a senior lecturer in strategic management strategy at Cranfield School of Management, blames the “many nimble competitors” that can offer additional services, such as website design, site optimisation and digital marketing. “It is often the case that incumbent legacy firms underestimate the speed of technological change and its impact,” he said. “They don’t possess the resources required to work in the digital environment.” Christian Stadler, a professor at Warwick Business School, said the leadership at Yellow Pages was not to blame for its challenges and that the company had to deal with a fundamental shift in how consumers behaved. “You can’t make a horse carriage attractive next to a car,” he said.

TIMELINE 1966

Yellow Pages is published as part of the General Post Office Directory in Brighton

2005

Yell acquires TransWestern Publishing, a US directory publisher, for $1.57 billion

2009

Bob Wigley is appointed chairman. Yell announces an alliance with Google for search marketing.

1973

National rollout

2003

Yell floats on the London Stock Exchange

2011

Yell reports losses of £1.4 billion and spends £160 million on interest payments

2023

Mark Clisby and Luke Taylor become co-chief executives

1983

Yellow Pages rebrands with a JR Hartley ad and becomes more than a emergency-only resource

2002

Yell acquires McLeodUSA for approximately $600 million

2012

Yell Group changes its name to Hibu, focusing on a digital-first approach

2021

HIG Capital acquires Yell’s sister company Hibu and its US-based business assets

1984

Becomes part of BT. BT privatisation leads to the launch of Business Pages

2001

Yell demerges from BT. It is sold to Apax Partners and Hicks, Muse, Tate & Furst for £2.1 billion

2013

Hibu restructures to cut its £2.3 billion debt. Yellow Pages revenue falls 27% to £163 million

2019

Final edition is delivered in Brighton, ending a 53-year run. Claire Miles becomes chief executive

1987

First electronic version of Yellow Pages is launched alongside Talking Pages

1996

Yell.com is launched and introduces transactions a year later

2014

Hibu reverts to Yell in UK after backlash. Relaunches with updated website, pay-per-click ads

2017

Chief executive Richard Hanscott announces the end of the printed Yellow Pages directory

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An extract from the award-winning book Right Kind of Wrong by Harvard professor Amy Edmondson

Every kind of failure brings opportunities for learning and improvement. To avoid squandering these opportunities, we need a mix of emotional, cognitive, and interpersonal skills. I define failure as an outcome that deviates from desired results, whether that be failing to win a hoped-for gold medal, an oil tanker spilling thousands of tons of raw oil into the ocean instead of arriving safely in a harbour, a start-up that dives downward, or overcooking the fish meant for dinner. In short, failure is a lack of success. I define errors (synonymous with mistakes) as unintended deviations from prespecified standards, such as procedures, rules, or

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policies. Putting the cereal in the refrigerator and the milk in the cupboard is an error. A surgeon who operates on a patient’s left knee when the right knee was injured has made an error. The important thing about errors and mistakes is that they are unintended. Errors may have relatively minor consequences while other mistakes, such as the patient who received the wrong-site surgery, have serious repercussions. Finally, violations occur when an individual intentionally deviates from the rules. If you deliberately pour flammable oil on a rag, put a match to it and throw it into an open doorway, you are an arsonist and have violated the law. If you forget to properly store an oil-soaked rag and it spontaneously combusts, you have made a mistake. All of these terms can be so emotionally loaded that we may be tempted to simply turn and flee. But in so doing, we miss out on the intellectually (and emotionally) satisfying journey of learning to dance with failure. Maybe you are one of the many people who deep down believe that failure is bad. You’ve heard the new rhetoric about embracing failure but find it hard to take it seriously in your day-to-day life. Maybe you also believe that learning from failure is pretty straightforward: reflect on what you did wrong (not trying hard

IMAGE CREDIT: Evgenia Eliseeva

Why failing also matters

enough in maths class, steering the boat too close to the rocks) and just do better next time, whether by studying more or ensuring you have the latest maps for accurate navigation. This approach sees failure as shameful and largely the fault of the one who fails. This belief is as widely held as it is misguided. First, failure is not always bad. Today, I don’t doubt that my failure to find support for the simple research hypothesis that guided my first study was the best thing that ever happened to my research career. Of course, it didn’t feel that way in the moment. I felt embarrassed and afraid that my colleagues wouldn’t keep me on the research team. My thoughts spiralled out to what I would do next, after dropping out of graduate school. This unhelpful reaction points to why each of us must learn how to take a deep breath, think again, and hypothesise anew. That simple self-management task is part of the science of failing well. Second, learning from failure is not nearly as easy as it sounds. Nonetheless, we can learn how to do it well. We need to accept ourselves as fallible human beings and take it from there.

B U S I N E S S

Three key points 01

You are a fallible human being Thriving starts with accepting our fallibility. Fallibility is part of who we are and learning to live comfortably with that affords us certain freedom. We have to be brave enough to be honest with ourselves because then we can be honest with others. Learning to fail well means preventing basic failures, anticipating complex ones, and cultivating the appetite for more frequent intelligent failures.

Forgive ourselves … and others

L E A D E R

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A CLASSIC READ

Stephen Robertson on Crowning the Customer by Feargal Quinn

I jumped into retail mid-career, joining B&Q as chief marketing officer. My pals in consumer brand marketing said I was a poacher-turned-gamekeeper; it felt more like poacher turned pheasant. Great customer service looks so straightforward until, that is, you join the board of a retailer. And then the god of retail took a hand and, seemingly by chance (a recommendation from a colleague in The Marketing Society), I read Feargal Quinn’s brilliant, simple, damn right, unputdownable work. A book, published in 1990, full of so many timeless and self-evident customer truths that none of us needs to read it – right? Here’s a man who started a small grocer in Dundalk and by applying his boomerang principle (the easiest way to make money is when every customer comes back) developed the legendary Superquinn chain. Here’s the executive summary: get out

of your office, watch your customers shop, talk endlessly to your customers, try new stuff, treat your team like family, be forever curious. Surely not too tricky? Quinn knew needed every one of his employees to have just the same desire to engage, to feel, to sense today’s customer so they could be just that bit better tomorrow – and never to lose a customer. Great culture beats McKinsey every single time – and it’s so much cheaper. Mind you, he was a terrible thief. He loved reading trade magazines and visiting stores around the world. When he saw an idea he slid it, metaphorically, in his pocket to try at home. The book hit the bullseye for me in every chapter. It’s about his passion, getting stuff done and his business philosophy – the chapters are collections of anecdote, wisdom and insight that show us that insanely good customer experience is the magic sauce that makes us money. Stephen Robertson is a non-executive director at Timpson Group and chairman of Retail Economics

We have to be willing to forgive ourselves and, just as importantly, others for mistakes we make, Edmondson believes. Failure brings an opportunity to apologise. A good apology can wield almost magical powers to repair the damage to relationships failure causes. And, according to research, “thorough apologies” increase positivity, empathy, gratitude and forgiveness – as well as reducing negative emotions and lowering heart rates. .

Master the science of failing well Failing well is not an exact science. When you stretch to try new things, it necessarily brings the risk of failure. The more risks, the more failure. The more you experience failure, the more you realise you can still be OK. In fact, you can thrive. It helps to incorporate a few basic failure practices — persistence, reflection, accountability, and apologising — into your life.

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T H E

D E B R I E F

B U S I N E S S

L E A D E R

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‘Everyone has a plan until they get punched in the mouth’ Mike Tyson, ex-heavyweight boxer

‘In real life, strategy is actually very straightforward. You pick a general direction and implement like hell’ Jack Welch, former chief executive of General Electric

‘The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks’ Mark Zuckerberg, chief executive of Meta

‘Culture eats strategy for breakfast’ Peter Drucker, management consultant

‘Everyone is in a rush to be the first. But sometimes it helps to be second. Second-movers have the advantage of watching and learning. Then you can correct and adapt’ Richard Harpin, founder of Homeserve and owner of Business Leader’s parent company

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