Tony Cocker fronts up at Eon following Ofgem’s £12m penalty

May 16, 2014

Tony Crocker, The chastened CEO of E.on, heads for the media studio circuit to be grilled on the failings in the company following the record £12m penalty for systematic mis-selling

The BBC interviewed Mr Crocker as a follow-up to its own reporting on the fine:

Energy giant E.On is to pay a record £12m penalty following an investigation into mis-selling by the industry regulator. Ofgem has carried out a series of mis-selling investigations, and in December imposed a £3.5m penalty on Npower. Ofgem says E.On’s penalty is the biggest supplier pay-out to customers, reflecting the extensive rule breaches, both on the doorstep and by telephone. The energy supplier apologised for the “completely unacceptable” failings.

Moderated contrition

At an interview on BBC Five Live radio [16th May 2014], a well-prepared Tony Crocker just about managed to balance contrition with rejection of accusations of leading an ethically corrupt company engaged in a sanctioned policy of misleading customers to agree poor deals.

The great leader arrives

Utility Week had produced a sympathetic and admiring profile less than a year ago [September, 2013].

The story reads as ‘clever but nice guy comes in, quickly sees weaknesses in company’s relationship with its customers, sets up participative ‘listening scheme’ which fixes the problems’:

Tony Cocker is not your typical chief executive. Down-to-earth, friendly, fiercely intelligent, he doesn’t seem to possess the ego that usually goes hand-in-hand with a corner office. That may be why he was able to so quickly perceive that something was very wrong with the relationship between UK energy suppliers and their customers when he returned from a stint in Eon’s German HQ to take the reins in 2011.

Cocker decided that the situation called for a total reset of Eon’s relationship with its customers, and in January 2012 launched the “Reset” programme to do just that. A six-month initiative entailed a 28,000-strong customer panel, intense research with frontline staff and the launch of the customer council.

Eon drafted in business big shot and former Asda chief executive Allan Leighton to chair the council, who was not a man to compromise. Staff across the business, from the front line to Cocker himself, reported back to Leighton and the council, having what Cocker calls with a smile “very challenging discussions”.

By the end of the Reset period, Cocker had fully assembled his management team and board, and they were ready to plan further ahead. “We spent some time with our teams reviewing our strategy off the back of Reset. What we’d inherited as a team was a much more complicated set of strategies. It was 57 pages and simplified it down to one page, [which could be summed up as] “becoming our customers’ trusted energy partners”.

The article ended with a quote from Mr Cocker saying his plans were progressing nicely:

I would say we’ve made good progress, so come back and let’s have a chat in a year’s time. We’ll be there, eager to see if doing the right thing can really translate to a competitive advantage in today’s stormy energy market.”

Before Utility Week had a chance to accept his offer, Mr Crocker is admitting his plans are not progressing as smoothly as he would have liked.

Five down and one to go

To date, the industry regulator has found five of the six major energy suppliers in the UK to have been in breach of regulations and fined them accordingly. A spokeswoman indicated that their investigations are not completed, so the ‘one’ remaining supplier is not necessary operating to higher ethical standards.

Outrage and the path to reputational hell

Politicians and the media in the UK are finding the utility companies a convenient set of targets for their sense of moral outrage. Public sentiment retains enough loathing of greed and corruption among the privileged to have some to spare for leaders of our private and public organizations. Regardless of his good intentions, Mr Crocker has a long road to ridding himself and his company of the on-going damage to their intertwined identities.

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Tough Calls: Allan Leighton’s philosophy on business and how to fix the economy

September 22, 2011

Allan Leighton has distilled his experience as a successful business leader into a how to do it book. He talks to BBC’s Radio Five of the book and his views on how to fix the economy

Not a Book Review, by Tudor Rickards

Allan Leighton has written a book on business as a matter of making tough calls. This post followed Mr Leighton’s appearance talking about his new book on a radio interview [BBC Five Live, Sept 22nd, 2011]

The high-profile leader

Allan Leighton has had a track record of considerable success as a corporate business leader. He is widely credited for the successful transformation of Asda. LWD subscribers will have followed his more turbulent time at Royal Mail. You can see a range of posts dealing with the period 2007 on as he battled with the challenges of transformation in the State owned organization [Use the LWD Search box opposite inserting the tag Allan Leighton]. According to reports at the time, his leadership style was no-nonsense, and popularist (or unpopularist if you crossed him). His successful career justifies attention when he turns his attention to offering business advice.

No business jargon

Mr Leighton spoke with impressive confidence. The absence of business jargon was noticeable This differentiates him from business leaders whose public utterances often suggest too much coaching, over-rehearsal and acceptance of someone else’s script-writing.

The key ideas

Three key ideas were clearly expounded.

[1] ‘Most business decisions are ultimately simple’
[2] Work from understanding consumer needs and motivations
[3] Stick to your Business DNA. [Shades of the advice given several decades ago by Peters and Waterman, ‘stick to your knitting’]

George Osborne or Allan Leighton?

The interview shifted to the Tough Calls facing the Chancellor of the Exchequer. Mr Leighton suggested that the Government’s focus should be on renewing consumer confidence which had been eroded by high levels of inflation. Confident consumers are spending consumers.

Within an hour there was a powerful exchange of views between two industrial commentators, one taking the view that confident financial analysts were more important than confident consumers for long-term economic stability. Not such a simple decision, perhaps?

Tough Calls reviewed

I came across a fine review of Tough Calls written by Tom Otley, in The Business Traveller:

Books from business leaders seek to draw general rules from specific experience. For us to read them we have to believe the person is successful, and they are able to distil the knowledge they have gained from their careers into a form we may learn from.

One obvious advantage his high profile has given him is that for a book like this he can speak with dozens of very well known, influential and respected business leaders and learn what they think about decision-making. Everyone from Sir Terry Leahy (Tesco) to Martin Sorrell (WPP), Sir Stuart Rose (Marks & Spencer) to Charles Dunstone (Carphone Warehouse) is here, and it’s immensely interesting reading what they have to say.

The disadvantage of Leighton’s approach is that each one of these business leaders has their own receipt for success, and they don’t always agree with one another. Nevertheless, Leighton concludes by offering a sequence of actions on the part of the decision maker:

“1. Step in. 2. Collect and digest the best information available at the time. 3. Make the decision. 4 Communicate the decision. 5. Make sure it happens. 6. Move on.”

…Many of us over the years have had bosses like this, who distil their considerable wisdom to the point where it’s obvious.

The reviewer mischievously then illustrates the point with a quote from the currently beleaguered James Murdoch:

“I have been following a lot of journalists and commentators tweeting and blogging about News Corp. … They’ve been out to dinner, they’ve had a drink and then they are on Twitter. It is just madness. You have to have rules about engagement in these areas.”

Follow That

I’m not sure if I can add much to Tom Otley’s review. However, the book is available at a very reasonable price on Kindle, and I may well attempt my first review of an e-book.

Watch this space.


How Long Will Adam Crozier Keep His Job?

October 22, 2009

AdamCrozier

The first day of the Postal Strike saw the question raised. How long will Royal Mail CEO Adam Crozier keep his job?

During the 2007 strike I suggested that the Royal Mail issue was too hot to handle for Prime Minister Gordon Brown, or the opposition’s David Cameron. I went in for gloom and doom, muttering about lions led by donkeys and the horsemen of the economic apocalypse.

Little seems to have changed since then. The battle lines are now drawn up over implementation of the fragile agreement reached after the last dispute. The various players in leadership roles appear to be digging in for a fight with few obvious winners. Billy Hayes of the Communications Union (CWD) provides the rhetoric of Trade Union leaders of two or three decades ago. It is unclear whether there is much to be gained, beyond keeping faith with the anger and frustration of his membership.

According to The Communications Union (CWU) [Oct 13th 2009]

Royal Mail is rolling out those changes with little or no concern for the views or interests of our members, the hard-working postal staff .. Worse still, we have seen an alarming rise in bullying and harassment cases with managers using the flimsiest of reasons to sack postal workers with long service. The CWU has offered a three-month no-strike deal in return for negotiations and a suspension of the current changes which are forcing postal workers into industrial action.

The combined challenge of competition, pensions and the need to adapt to a rapidly changing world of communications makes change necessary. Royal Mail’s current approach clearly isn’t working so we’re seeking intensive talks to establish a national agreement that will pave the way for rolling out the change that the company desperately needs.

The Leadership of the Royal Mail

Nor is Royal Mail demonstrating convincing leadership in this matter. If there is a strategy, it is about keeping a low profile. A colleague charitably suggested to me that its CEO Adam Crozier may be deploying a do-nothing strategy, letting the Union self-destruct. It must be a very subtle strategy. It flies in the face of conventional wisdom which suggests it important to demonstrate that corporate leaders are pursuing a sound plan.

Mr Crozier is regarded by many as asmooth but ruthless business operator. His initial appointment might have been over-influenced by his bravura display in his previous job at the Football Association. There seemed little to justify the Royal Mail appoitment in a CV showing time at Saatchi & Saatchi, and Pedigree Petfoods.

At the time that it may have made sense as part of a tough double act of Leighton and Crozier. One tough and abrasive, one tough and smooth.

In an earlier blog I suggested that

Allan Leighton has an appetite for self-publicity as inspection of the Royal Mail website reveals. He presents himself as a dynamic (and somewhat terrifying) leader. In public he attempts to soften the image by implying he is very much one of a team, operating closely with CEO Adam Crozier.

Maybe Leighton saw in Crozier a promising sidekick in a double act. But those skills become less valued when a leader has to act as solitary lightening conductor for political storms…

Which might be the position Mr Cozier finds himself in, now that Allan Leighton has been has replaced by the equally decisive Don Brydon.

Adam Crozier, Royal Mail’s chief executive, could be forgiven if he were a little apprehensive about the Government’s appointment of Donald Brydon as chairman of the state-run postal service. Mr Brydon, who becomes a non-executive director of Royal Mail immediately and is to take over the chairmanship from Allan Leighton at the end of March [2009], has a history of disposing of chief executives. In a recent interview, Mr Brydon, 63, pointed to three examples: the chief executive of Allied “got chopped”; the chief executive of ScottishPower “got chopped”; and he “changed” the chief executive at Smiths, the engineering company, of which he remains chairman

What Next?

Mr Crozier will sooner or later make an appearance above the battlements. One influential commentator, Kevin Maguire of The Mirror, is already calling for his head.

There will be other losers in and outside Royal Mail. It adds up to a potentially gory tale of leadership and its challenges.