Archie Norman: “There are no monuments of chief executives”

“Instant change is no change,” he remarked at our football-business conference, Touchline to Boardroom. “If you give the impression that you can transform a failed business in 12 months, then you’re defining your own failure. Too many chief executives want to declare victory too soon.”

Entrepreneurs shouldn’t be afraid to tell employees the truth about the state of the business, said Norman. They will have been waiting years for someone to tell them the hard facts.

“When I went into Asda, I admitted outright that I wouldn’t be able to improve profits for three years," he said. "Patrick Gillam [former non-executive chairman of Asda] and I would walk into meetings with the shareholders. I’d launch into a speech about the fundamental problems with the business and the fact we were running out of cash, while Patrick – who’d spent 28 years at BP where nothing ever went wrong – would pass me notes under the table saying, ‘Can’t you be more upbeat?’ But that’s the wrong thing to do. Shareholders want you to be tough and direct. It’s not a popularity contest. Chief executives today sometimes look like they’re running for an election.”

Norman drew on his experience of having to make 5,000 employees redundant within the first 18 months of joining Asda. “We closed stores. We sold all our future store-development programmes. We changed 190 of the top 200 managers in the first five years. That’s not a nice thing to do.

“But you have to do the tough things first.”

Read his full speech in the November edition of Real Business. Subscribe for free here.

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