John is Chairman of Timpson Ltd, the family-owned retail chain. He is a member of the Women’s Business Council, a Trustee at Uppingham School and a former Trustee of ChildLine. John writes a weekly column for The Daily Telegraph and has authored several management books.
What would you do to make UK boards more effective?
I would do three things.
First, I would forbid decisions from being taken at board meetings. Board meetings should be used to discuss ideas, exchange views and to check that plans are taking shape within the business. Of course, you may want to formalise a decision at a board meeting but you shouldn’t try to actually reach a decision there; the thinking must happen around the meeting.
Secondly, I would make sure that non-executives are in touch with the business. It seems ludicrous how distant non-execs can be and yet still try to interfere with the operations. As Chairman, my time is largely spent visiting our shops and meeting our colleagues. I’ve been to two of our stores today and I’ll visit one more before I catch the train home. Looking at the figures comes at the bottom of my list. You learn much more by getting out there and talking to your team.
Thirdly, I’d make sure that the board is clear about how their business makes money and I’d keep them focused on this. It’s surprising how little clarity many directors have about the main purpose of being in business.
As Chairman, how do you keep your board focused?
Our board pack helps. Most boards are drowning in reports about past performance but we always open our pack with papers that are focused on our future.
I was so fed up with the standard box-ticking exercise of the risk register that I produce a “what if…?” paper to stimulate thought and we put this at the front of our board pack. For example, “what if our CEO were injured and we hired a professional manager as interim who did a once-over of our finances and decided to cancel our birthday-off policy and company holiday homes…”
Now and then I’ll also write an Annual Report for our business in 15 or 20 years’ time; it’s far enough ahead to feel unconstrained and it’s a great way to allow your imagination to run riot. The last time we did this, it shaped our internet strategy.
What government policy would you like to introduce for the benefit of Britain?
I would overhaul our tax and benefits system.
Whatever your age, gender or employment status, under my system you would receive £400 a month and £200 on your birthday. This would replace all other state benefits (apart from those with disabilities who needed extra support) and the rest you would earn through work.
Next, I would make all tax rates 20%. Income tax, death duty, capital gains and VAT would all be the same to create a simple and level playing field.
And finally, if not rather controversially, I would insist that not everyone should work. We aren’t all cut out for the workplace. I only employ people who want to work and organisations waste too much time on managing those with bad attitudes. It’s not good for them or us.
If the world stopped for a moment and you could reboot it, those are the changes I would make.
What is the smartest business decision you’ve made?
Resisting the temptation to float Timpson in 1991. As my wife so wisely pointed out at the time, I would not have enjoyed the City breathing down my neck.
What book is on your bedside table?
I read books that inspire me and I have quite a pile by my bed.
First of all, I have The Nordstrom Way by Robert Spector and Patrick McCarthy. This tells the story of the US department store famed for its customer service and it inspired one of the core features of our culture at Timpson: our ‘upside down management’. This inverts the traditional hierarchical pyramid so that customers are at the top and the board is at the bottom. I don’t like being told what to do, so there’s no reason why anyone else should. Our store-staff understand our customers the best, so we’ve put them in charge. Management is there to support and empower our staff and this rolls up to the board. The board must appoint the right executive team and help them be as effective as possible.
Secondly, I have Boo Hoo: A Dot Com Story by Ernst Malmsten which tells the story of VC backed boo.com and the irrational exuberance that characterised the dot.com bubble. If you think such things can’t happen, read this book!
I then have The Richer Way by Julian Richer of Richer Sounds. Thanks to him we offer our staff the use of holiday homes, which is just one of the many good ideas that you can read about in his book.
And finally, I have The Mayor of Casterbridgeby Thomas Hardy, which offers a lesson in the perils of forgetting where you’ve come from.
What is your golden rule?
Don’t get into debt! It can be tempting to borrow money, especially when interest rates are so low. But don’t be fooled. There is no such thing as cheap finance – everything comes at a price. To grow a business organically from cash flows may take a lot longer but that’s not necessarily a bad thing. Why is everyone in such a hurry?
If you could rip up the rule book, what would you do differently?
At Timpson, nothing at all. As a private company we’ve long since done things our own way. But for plcs, I’d scrap the current formal annual reports – they’re daft. Who on earth reads them?