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Ask a CEO or chairman about a standout decision and nine times out of ten they'll tell you about hiring someone who made a tangible difference to the business. It makes perfect sense, given that winning strategies will be nothing but hot air if the people on the ground are unable to make it happen.

Vanni Treves
, who is now the Chairman of FTSE 100 business services company Intertek but was also famously brought in as chair of troubled assurer Equitable Life, says: “The best decisions I’ve made without question were bringing in a chief executive. I’ve always thought that the appointment of the CEO was the most important decision the chairman has to make, followed by the right finance director and divisional chief executives. When that’s done, everything can then fall into place.”

It’s a case of not settling for second best in terms of recruitment. Murray Hennessy, CEO of travel specialist The Trainline, firmly believes in holding out for the right candidate. “Whenever I look around and see things are going well in a company, I often find it’s because there is a good person running that area. Where there are problems, sometimes it’s because of legacy or history but often it can be because you don’t have the right person or the leader is wrong. If you hire the right leader, then they bring in the right people.”

Stephen Catling, the CEO of food specialist ABF Ingredients, says that “there is nothing better than making a fantastic hire and seeing them really flourish”. A similar point is made by Chris Merry, former CEO of financial institution Matrix Group: “Inspirational appointments make a huge difference to a business”.

Human jigsaw 

Kerstin Mogull
, Chief Operating Officer of Future Media & Technology at the BBC, was a driving force behind the introduction of the highly disruptive iPlayer. “The people you have working for you are the most important decision you make. No question whatsoever,” she states. 

Copious effort and hard work went into persuading people that the Beeb had the ability to blaze a trail in the area of new media. “The iPlayer was ridiculed at the time,” Kerstin tells Criticaleye. “My role was in strategy and people would make fun of it. Before the launch, we had to spend time to show it was a good idea and clarify thinking… I would say it was nine months to a year of work, shaping an idea and most importantly getting stakeholder buy-in and then taking it to get executive board approval. When the proposition is clear enough so everyone can understand it, and stakeholders are aligned, then you can present what you want and get the sign-off you need.”

Despite widespread scepticism, Kerstin recalls that the team behind the iPlayer were determined to see the project through. “In those situations, when you have an inner conviction, it’s about clarifying the proposition and bringing stakeholders with you.”

Strength in numbers

If the group dynamic works, it’s far easier for those at the top to call the shots. Bruce Cox, Managing Director of Rio Tinto Diamonds, observes that, although the company was initially hit hard by the global financial crisis, both he and his team identified in 2009 the huge potential in growth of luxury goods consumption in India and China.

They pushed hard for marketing programmes in these countries, agreeing to cut direct operating costs to fund investment. “Only two years later our business is incredibly well positioned with market leading and innovative programmes that have gained significant traction in both of these markets. The longer [term] views [of the] team have absolutely paid off,” he says.

The past few years have forced leaders to be creative. “The best decision [we made] centred around recognising our limitations and finding an alternative path to meet our objectives,” says Mark Robinson, CEO of electronics specialist Advanced Power Components plc. He recalls a decision in 2008 when the company had diversified into the green technology marketplace: “At that time it was clear that APC didn’t have the resources to be able to both develop a product and market it successfully on an international basis so we created a new entity, Minimise Limited, into which we attracted private investment from individuals who could add value to the organisation.”

Quality matters

When mistakes are made, it’s invariably over recruitment. Rather than allow a person’s incompetence to infect an organisation, the rule of thumb is to act quickly.

, who as FD and CEO was pivotal in the rescue of headhunting firm Whitehead Mann, says that not replacing or moving individuals on in a timely fashion can be catastrophic. “People who have been around a long time can be nice and may have done a good job, but as a business changes different skills and qualities may be required.

“This can be particularly true when you have the founder of a business. It can be hard to jump on the problem but you absolutely have to identify the blocker or blockers in a business. Once they are removed, it really can rejuvenate the whole organisation.”

This extends to advisors and suppliers too. Faisal Rahmatallah, Chairman of the AIM-listed manufacturer Plastics Capital Plc, says that bringing in a new broker late in the company’s IPO process proved to be a wise move. “The appointed broker did not seem to have the horsepower needed – market conditions were difficult – and a call had to be made with highly uncertain implications. My board and investors needed to be persuaded in very short order. In the end it made all the difference and the IPO was a success, which was obviously a big watershed for the company.”

As ever, the enemy of effective leadership is hesitation, complacency and working in isolation. “For a CEO, bad decisions are very often better than no decision at all. Sitting on the fence really isn’t an option,” adds Chris.

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