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 Sir Gerry Robinson is one of Britain's most
successful businessmen. He's run some of the country's biggest and mist
high profile companies, including Allied Domecq and Granada, and
chaired the Arts Council. But even for someone with his knowledge and
experience, his new project must be a daunting one - he's taking on the
recession!
It's all part of a new series for Channel 4, Gerry's Big Decision.
Amid the gloom and the worst economic outlook for generations, Sir
Gerry is riding to the rescue of several companies across the UK –
armed with his business knowhow, his finely tuned instincts, and his
personal cheque book. Here, he explains more about the series, how it's
proving to be an emotional roller coaster, and why it's lonely at the
top.
What's the concept behind your new series, Gerry's Big Decision?
Well,
it started off because we were thinking about the number of companies
in the UK that were going to be in trouble. I have to say, since we
started, the reality has exceeded every possible imagined number! And
we felt that there were a number of situations where, with just a bit
of help, and a bit of cash in some cases, you could turn the businesses
around. So the object of the series is to look at a couple of
businesses every week, and generally choose one (although it could in
theory be both, or indeed neither) to help out with advice and money.
It's based on that sense that under current circumstances a lot of
people who are running perfectly good companies are going to go under
when actually they could be saved and go on to be productive and
produce things and create employment and everything else that goes
along with that.
So you're helping them out with business nous as well as with the possibility of an investment?
Yes.
Obviously as part of the decision-making process, you do get to talk to
people, you get involved with them and you get them thinking about
things irrespective of whether you end up helping/investing in the long
run. You hopefully set them off on a path which will improve things for
them anyway. There is something about somebody coming in from outside
with no axe to grind that actually gets people to look at something
really cleanly again and take a different approach.
How did you go about choosing the companies taking part? Did they apply to be on the show?
Yeah,
most applied either through stuff that was put out on the internet or
local newspaper advertising or articles, and there were a couple of
articles in the national press. So people applied – and as you can
imagine, we had a fair number.
Did you limit the types of businesses involved to certain fields?
No,
we didn't, although I personally have a feeling that, with the pound
the way it is, we should be trying to help manufacturers – by no means
exclusively, but a slight leaning towards manufacturing. Because there
is a chance that we could get back to manufacturing things in a serious
way in the UK, because the pound is now a competitive currency, and
there are a lot of skills still lurking around. For example, in the
series there's a furniture manufacturer that's been in business for 160
years, and they're in deep, deep trouble. Clearly this is a skill
that's been around for a long, long time, which wit a bit of help, some
financial but mostly managerial, could genuinely get their act together
and go on to survive for another 160 years. But as they stand at the
moment, they're quite likely to fall by the wayside.
Bearing
in mind you're dealing with all sorts of different fields in this
series, is it important for you to know about a specific field, or is
it more a matter of implementing certain universal business rules?
When
people talk to you, they always talk about how special and different
this particular trade or industry is. In my own experience, whilst
there are things that are particular and specific, most problems are of
a far more general nature than that, and can actually genuinely be
sorted out without that detailed specific knowledge. Because people
stay in the same industry for most of their lives, they end up thinking
that things only apply to their specific industry, and they really
don't.
The fact that your putting your own money into
some of these companies will have people drawing comparisons with
Dragon's Den. Is that a fair comparison?
Of course there
are comparisons, because nothing's completely new. It's somewhere
between The Apprentice and Dragon's Den and something else,
everything's a hybrid, really. But the sums of money involved are
greater in this. What is fascinating is that putting in money really
forces you to think very clearly about what it I that you're thinking.
It's about being absolutely certain that what you're setting out to do
has a real chance of working, and that the quality of the people
involved is right. It's been a real learning exercise for me, so far. I
think I approached this like you do most things, you think about it in
a semi-casual way. But then two things happen. One is, you get hugely
involved with the people concerned who, almost by definition, are in
quite a lot of trouble, and so the desire to help is quite high. And
secondly you have this horrible reality that you have to put money into
it, and if you're putting money into it, it has to be right. It's quite
an emotional roller coaster, it really is, because you can see how
desperate people can be. The series' potency lies in that.
Is it difficult for you to be dispassionate, when you've met the people whose livelihood is at stake?
I
think it's impossible, completely impossible. That doesn't necessarily
mean you make the wrong decision. But it's impossible to be
dispassionate – you're totally caught up with them, and because of the
nature of some of the companies – they're quite small – you're caught
up with their families. It's impossible to be dispassionate.
When
you invest your money in these firms, do you only do so if you're
fairly certain you'll get a return, or will you be happy to take a bit
of a risk from time to time?
I think you always have to
take a risk. Any investment is a risk. You're making a reading that
there's a reasonable chance of getting a return – hopefully you get it
right more times than you get it wrong. But you are fundamentally
investing in the capacity of someone else to deliver. Have you got the
right person, and if you haven't, can you get the right person in to
help? Most problems arise because somebody isn't capable of getting it
right. You're often looking at the need to change people within the
organisation itself.
With that in mind, you go in to each company and talk to people from the top to the bottom, don't you?
Yes,
very much so. You get a total feel for the whole business if you talk
to everyone, from the person who runs it down to someone on the shop
floor.
Will you be implementing new strategies and plans as you're assessing the businesses?
Yes,
because part of assessing whether you've got people who can do things
is often just saying 'Here's a few thing I'd like to happen in the next
week or fortnight' and then just seeing what happens.
Is that really just to see if the people involved have the flexibility and adaptability to make changes?
It's
predominantly that, but it can also help you test out theories. For
example, you could be looking at a new market, so you could give
somebody the task of trying to go and sell to X, Y and Z. That will
tell you whether they're capable of selling, but it also tells you what
kind of additional marketplaces might be out there. And it can also
include a test of a product, you get someone out to sell a product and
see how that goes. It gives you a reading of whether you're dealing
with a good product or a product that's questionable. So the new
strategies have all sorts of implications, but the main implication is
that test as to whether or not you've got people who can actually
deliver.
When you're deciding which companies to invest in, what will you base your final decision on?
It's
quite a simple question, but it's a very difficult one to answer.
Principally it's about a belief that this is a company that will not
survive without this help, but with this help could go on to do far
better things than they're doing now. You may find with a company that
you look at that although they're in a bit of trouble, with a bit of
organising themselves and looking at things differently and at the way
they set themselves out or collect moneys in or whatever it is, can
actually sort themselves out without extra financial involvement. For
me the main drive is to invest in something which, without my
investment, probably will collapse.
So there will be
instances where you don't invest in a company because you feel it
doesn't need investment, just a bit of guidance?
There will
be instances of that, and certainly there are some right on the cusp of
that, where it's difficult to know whether they genuinely need
investment or not. But mostly it's pretty clear whether something is
absolutely going to fall over without our help or not.
Some
people would say that businesses going under is simply a matter of
survival of the fittest, sorting out the weak from the strong. But you
would say there are definitely viable businesses out there who should
be given a bit of help?
Yes, I think that's true. But
almost always you need to make changes in some of the roles that people
have and some of the ways in which they do things. It's not just
finance that's the issue. There's a tendency to think now "Oh my God,
the world's falling apart, nothing can work, the banks aren't lending
any money, lots and lots of good businesses will go to the wall because
they'll run out of money despite the fact that they're well run." These
companies mostly have a need for some finance, yes, but they also have
a need for some sorting out. So it's not true to say they're
necessarily weak businesses, but nor are they necessarily just hampered
by a cash flow problem.
You mentioned The Apprentice.
When people think of businessmen on TV, Sir Alan Sugar is sure to loom
large in their minds. I imagine yours is a somewhat different style
from his.
I love The Apprentice, I'm a huge fan of it. I
think it's a great programme, but I don't think it's very
representative of business, to be honest. I think it's just an
intelligent piece of television which makes more people connect to
business than otherwise would have done. I don't think business is that
and cut and dried, and I certainly don't believe that you have to be
that hard. I think you can genuinely help people even if you don't end
up backing them financially. I honestly believe that. I think in most
instances, somebody coming in from outside with a bit of experience,
because they've not axe to grind, really can help. If you're involved
with something that you've been involved with all of your days and
you're frightened about it going under, sometimes you just can't see
the obvious.
So when you pick one company to invest in
over another, it's not as simple as one being a winner and one a loser,
because they've both benefitted from the process.
That
would certainly be the aim. In the end, the object is to try and
benefit everyone taking part, so that the companies can go on to
survive even if you don't invest in them. But definitely it's not about
trying to say "A are all idiots, they lost, and B are terrific and
they've won". It's not that at all.
On a more generic level, is it lonely, being a boss?
I
think it is. In the end, somebody has to take decisions, and to take
decisions you have to be detached enough from everybody else involved.
I think that, by definition, puts you slightly out on a limb. And if
you're not prepared for that, you probably shouldn't be doing it. I'm
not talking about being totally separate and aloof or anything daft
like that, but in the end people won't treat you exactly the same,
because part of your role is to make decisions and to give leadership.
What's your impression of the economic outlook?
I've
never been through anything like it. We're all in strange territory.
What's different this time, even compared to the 30s, is that we've got
a banking crisis. When have you ever asked yourself before how secure
your bank is? It wouldn't have been a thought in your head. To be
honest, the one thing the governments need to do. And it's what they're
seeking to do, is to protect the banking system. Whatever happens in
the longer term, in terms of looking at regulation in a different way,
changing the culture and all that debate, the one thing that really
matters is that the banking system stays alive. If that stays alive
we'll all come out of this probably a damn sight healthier for it, but
not that quickly, I don't think. I think we'll be very lucky to see the
banking system start to lend money in a serious way by the end of 2009,
and we're probably looking at 2011/12 before we're back at any
normality, and even then I'd be surprised if we were back at they
heyday of that we all participated in.
What advice would you have for businesses in the current climate?
Don't
just bury your head in the sand. Go and talk to the people that you owe
money to, go and talk to your banks, and get out there and try and
change some of the things you're doing now, because whatever happens,
the market place is going to get more difficult, and the companies that
survive are going to be the one that are active, that are out there,
that are doing things and not accepting that it's all just impossible.
This sense that the world's falling apart is misleading. There's always
something you can do.
Gerry's Big Decision airs on Channel 4 at 9pm on Thursday
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