Hit the road Positive leadership for troubled times - ICAEW

FINANCE & MANAGEMENT
poor as ever,” he explains. “So if they go
into a store and they’re not really clear
what it stands for, they just walk out.”
FIND A NON-AUSTERITY VISION
This lack of direction and loss of focus
usually starts at the top. “When I joined
Selfridges in 1991 it was like Grace Brothers
from Are You Being Served,” Williams
recalls. “The lighting was dour, the
escalators were 30 years old, parts of the
store weren’t connected properly, the
merchandise was horrible, the floor was
covered with frayed carpet – and yet all that
was happening in a beautiful building,
probably one of the finest places for
retailing anywhere in the world. We needed
to create a raison d’être for the business.”
Shifting Selfridges’s focus from home to
fashion proved to be a masterstroke.
Williams and his then chief executive
Vittorio Radice (who later enjoyed an
ill-fated stint at M&S) repositioned the
Selfridges brand as a powerhouse on the
High Street. But more importantly,
management was able to reconnect staff
with the business.
“Every business needs a story,” he says.
“When all these businesses, whether
retailers or consumer brands or whatever,
were first created, there was a reason why
they existed – because there was some sort
of opportunity or gap in the market.
“In a turnaround, you need to stop the
haemorrhaging and deal with money going
out the door and all the rest of it,” he
continues. “But you also need to build a
story about why the business is going to be
progressing. If you can’t do that, nobody’s
going to invest in it and the talent will
gradually drift away because they think all
they’ll be doing for the next three years of
their life is cutting costs.”
“The CFO is
looking at the bank
statements, at the
cash flows, he’s
the poor guy who
knows something
has got to be done”
MR MOTIVATOR
However, given the urgency of most
turnaround situations – creditors making
ominous noises and the like – is there ever
really time to truly inspire staff? Is fear
of oblivion not a more effective
motivational tool than vague hopes of
revitalising a brand concept?
“Well, you have to provide hope because
people can’t forever live in fear – that’s
extremely debilitating,” Williams says.
“And hope is a positive thing by definition,
it provides people with a future. Fear is
different. They’ll say, ‘Well, I’ll put up with
this for another couple of months and then
I’m off’. So I think hope is more important
– although you sometimes have to use the
fear factor to get the urgency.”
And of course, there’s a crucial role for
the finance function. Williams’s strong
financial background – he joined Andersen
after qualifying in the mid-1970s, then had
financial controller stints at Aiwa UK and
Freemans before the Selfridges post came
up – must give him an insight into the
unique position the CFO has in a
turnaround scenario.
“It’s difficult, because the chances are
the CFO is the one who’s having to blow
the whistle,” he says. “Some CEOs are slow
to own up to a problem because they don’t
believe it – or rather they don’t want to
believe it – or they don’t want to admit
they actually caused it. Yet the CFO
is looking at the bank statements, at the
cash flows, he’s the poor guy who knows
something has got to be done.”
So what advice can he offer any
fellow finance professionals who find
themselves on the wrong end of an
emerging turnaround situation? The
answer is simple: be even more honest
and straightforward than you’ve ever
been before. Just so long as you don’t
go overboard.
“There’s a danger that you go completely
‘sackcloth and ashes’ and say, ‘well, let’s
assume we’re never going to make another
sale ever in the store’,” Williams says. “And
that, of course, is not true. Having a CFO
who is controlling the cash and giving an
accurate report as to where the business
stands is the most important thing.” But
without hope – even in the finance
function – all is lost.
“I think hope is more
important – although
you sometimes have
to use the fear factor
to get the urgency”
12
MAY 2012 FINANCE & MANAGEMENT