Anthony Habgood, Chairman, Reed Elsevier plc and Whitbread plc
Nicholas O’regan, Professor of strategy and innovation talks to Anthony Habgood about his successful career.
Nicholas: Anthony Thank you for coming down to Bristol
Nicholas: Just a few questions. You’ve had a distinguished career as a management consultant, Chief executive, Executive Chairman of Bunzal, Chairman of Whitbread and Reed Elsevier. To what extent do you think generic management skills are transferable across different businesses?
Anthony: I think without question there are alot of skills that are transferable, across different businesses. But I think there are some barriers which are more difficult to cross than others; for example if you are an executive in a distribution business, to transfer to a company which is building nuclear power stations would be a very considerable gap to reach because the decision making processes of the company is really quite different.
Nicholas: That leads me onto my next question, how important is specific industry experience in your view to successful management?
Anthony: I think it depends alot on the situation that your in. In this period of particular economic turbulence that we’ve been in. Some industry experience has proven very useful to people. Because when your in a very, very difficult economic position your immediate reaction is, you can’t take a time to learn about business, you have to act, you have to act quickly. And so industry experience can be very helpful to that.
Nicholas: You’re credited to helping Bunzel which is nicknamed Bungl by the city in to a highly successful business. You the chairman of a company that has successfully turned around, thats Whitbread and you’re in the middle of turnaround or midst of turnaround. What are the Key lessons for a newly appointed chief executive in charge of turning around a company?
Anthony: Well the important thing for a new chief executive is to really get on top of the business, so you have to spend a lot of time in the beginning listening to people. But you mustn’t spend too much time doing that because you’ve got to be bold and I think there are three times you can make important decisions.
You can be too early, just at the right time or too late. Well you’ll never be just at the right time and it’s better to be too early than too late, so be bold.
Nicholas: Reed Elsevier is a Anglo-Dutch company. Does this duality add management complexity and if yes how is it added?
Anthony: Well inevitably a little bit because we have two boards we are two separate companies that own the operating company. So we have two boards of directors, so we have two AGM’s.
We have different codes of governments in the different places, and we have to comply with both. Both companies are listed in New York so we have two parallel ADR listings as well. So are added complexities.
We have to have several board meetings a year in the Netherlands. We have a number of Dutch directors. Well we have, we have a big majority of international directors anyway so that’s not a hardship but it restricts the pool so you are; just having Dutch ones rather than perhaps German or French or whatever else you might have.
On the other hand the restrictions that, the complexity that is added there is I would guess probably less than the complexity that is being added to for example the WPP by having a trying to move its Domus isle to Ireland.
Nicholas: Turning into acquisitions, What factors contribute to success for acquisitions in your view?
Anthony: We as you know probably better than I 70% of acquisitions over the whole of my career have been by academic standards always said to be not successful or too of failed or whatever the definition exactly is.
So the way to be successful is to mitigate that risk more than anything else and in my view the way you mitigate that risk is by really knowing the company you’re going to buy or really knowing the industry it’s in. The more you know the greater amount you mitigate the risk and if you can get rid of the risk, falling 30% that’s good.