The Characteristics of Leadership, By Lord Watson of Richmond CBE FRTS, Chairman of CTN Group

For the past 20 years I have spent much of my time counselling capitalism. In practice, this has meant counselling capitalists—most of whom have been or are CEOs of very large, often interntional businesses. To do this successfully my necessary self-discipline is discretion.

A consultant’s task is to speak truth to power. To do this effectively, I need the trust of the people I advise. Often they will not agree with me. Often I have to say things they do not wish to hear. If I break their trust in my discretion it becomes much harder for them to take my advice and I would not give them advice

if I did not want them to follow it.  So please, do not read this article in search of gossip or scandal.

What I wish to share with you is my experience of the challenges of leadership and my perspective of the characteristics of great leadership in the contemporary corporate world.

It is vital to understand that the measure of greatness is not always solely success. Today, many CEOs don’t have that long in the top job. Many crash and burn before they are able to consummate the strategy they have for their company. Some fall from power because they are revealed to have no strategy at all. Others are simply submerged by crises with which they cannot cope—and many have terrible luck.

Or an industry can be caught, vice-like, by the rapidity of change not foreseen—witness supermarket retailing. Or again a company can be rocked from its foundations by cata- strophic accident—witness the oil business.

Let me take three examples from my experience to illustrate how it is that great leadership is not invariably rewarded or finally defined by the stock markets, the analysts, the quarterly results, by the share price, or the media—but may nevertheless be vital in ensuring the survival of a business.

Banking, and specifically the alleged greed of bankers, is held to be the villain of the recession. Thus when the former CEO of Barclays opined that the time for remorse was over, so was he. The successor CEO has yet to be finally rewarded by the market but his actions open the way to sustainable success and moral regeneration for the bank.

When disaster hit BP’s drilling rig in the Gulf of Mexico, the challenge facing the company’s new leadership was to anchor a new safety culture in the business, optimising the efficiency of a smaller company, contesting the continuing challenges in the US courts.

and other uncertainties for BP. Thus far, Bob Dudley has not been much rewarded by the markets or the media, but he has given BP the opportunity and the space to recover.

Take the case of Tesco. Following a decade of triumph, Sir Terry Leahy stepped down—knowing when to move on is one of the greatest skills in the CEO talent pack. In retrospect, many have discerned the dangers that faced Tesco. However, there was no denying Sir Terry’s achievement and the huge financial success of the company.

Within months of Phillip Clarke taking over he recognised that Tesco was not quite as the world had thought. It was challenged by a brutal conjunction of two kinds of competition—the German discounters and online shopping. The first profit warning, the imminence of a second warning and suddenly Philip Clarke had run out of time. Was his tenure an unmitigated failure? I think not.

The rest of this editorial will be published at a later date.