Episode 5 The Bottom Line

capacity for enriched uranium. Now, The Bottom Line. We will not be

talking about any estate agents, car mechanics, or financial

advisers but we will be talking about them. They, like so many

people, sell specialist knowledge. But they are also perversions we

also grumble about. So today, the curious business of expert advice.

Plus, what is the place of religion in work? Each week, influential

business leaders gather for The Bottom Line. Now you can see it as

Let us start by spending the next few minutes by meeting our guests.

The first is gather MacGregor. -- Gavin. He is also the author of the

Mrs Moneypenny: -- Mrs Moneypenny column. We are very low volume. We

for lot less than 100 jobs a year. It is a specialist business. We

sell specialist services. Each member of staff helps recruit four

people. Yes. We are not in the recruitment business. We are

between a management consultancy and a private detective agency.

your speciality his third relations business. Communication spot

stopped communicating to any body and needs it. We work for many

foundations. All sorts of public companies. Anybody who needs to

communicate. It is people we deal with governments. A roaring trade

in Brussels. People who need to communicate to share holders

already body. That business, the communications business, is there

any sign of it beginning to dip again? No. The times people need to

high-rise is when they get away size where they want to spend more

time working out what the cost of capital is. You Ryder -- you either

cut down or you get somebody to do it. Rupert Soames is the chief

executive of Aggreko. You have had some interesting business in the

last year. Let us talk about the Japanese tsunami. Your services

were in demand. We provided for people when they needed it. The

Japanese example was when they needed both. They needed a huge

amount of power and they needed it quickly. We mobilised to very large

power stations. We got it there within three months. Built the

permanent equivalent of that and it would take you five years. We have

our kit in containers ready to go and we do everything from A

farmer's market on a damp Saturday morning through to the Olympic

Games up to providing power for whole countries. The power is boil?

Yes, gas and diesel. You would take five years to do what you do.

build a permanent one. What price of energy and electricity are they

paying for the fact you have managed to do it so quickly? Five

times the long-term price? It is not far different in terms of the

equipment. It is very efficient. The cost of the fuel is different.

Permanent power stations, you will have great big gas pipelines. A lot

of these run on diesel. People do not hire us because we are cheap.

They need us very quickly and because they need us for a short

period of time. You started off as a disc-jockey when you're younger,

a college student. Glastonbury. was a DJ at a nightclub. That was

in my youth. One of my most valued customers was Michael Eavis at

Glastonbury. A bank here. Finally, Gavin Oldham. He is chief executive

of The Share Centre. That is a retail stockbroker. Talk us through

what service you do provide. You give some advice and also transact

for people who want to buy some shares themselves. I have been

passionate about encouraging personal share ownership in the UK.

20 years ago, I set up The Share Centre and The Share Centre helps

people who choose their own investments. We do provide advice

for them as well. We look after about 300,000 customer accounts and

we have 150 people in Buckinghamshire. What is the

difference between The Share Centre and other stockbrokers?

traditional one is a wealth manager these days and they take decisions

on behalf of their clients and does a wealthy people. We look after

people of whatever their means are all their experiences. We have

practise accounts, loads of information on how to do things and

we walk alongside the investor all the way. One is a practise account?

You can buy and sell and see how well you do? You can put �15,000 a

virtual money in your account and a salad at your heart's desire. He

won't make any real profits but you will get a lot of experience.

us talk about serve and expertise. In some sense, you were all

somewhat in that business. -- are. I'm a buyer. I do not know what is

wrong with my castaway asking mechanic. He tells me I need an

expensive repair. Economists are obsessed with information. The

difference between the purchase her and the seller of the servers. It

is a common revelation. You seek advice from the person selling you

the product because they know more about it and you do. It can be an

electric shock or anywhere. I am wondering whether these markets,

there is a symmetry of interest on knowledge, whether these markets

work very well and what you do was people who sell expertise? What do

you do to make the market work well? Rupert, I am guessing you do

have to specify. To defy % of our business is emergencies. People are

desperate. -- 25%. I jolly well hope our salespeople know more

about what to do than the customers do. It is very simple, in my mind.

It depends if you want to be in business for five minutes or 50

years. We have opportunities every day to go and talk with our clients

when they're under stress or need stuff but we have been in business

or 50 years because we do not and what the normal day-to-day

relationships are, they're fine, you do that every day and they're

easier when you have a continuing relationship. What is difficult is

when you have a long-term depression, like a lawyer. --

profession. How would you choose which is the right one? You hope

you're not going to have to deal with one. Most services, like the

car mechanic, you go at your local garage and if they give you a bad

service, you go to a different garage. That's all well and good if

you're going to a mechanic. If he went to the car salesman, a

salesman whose interest is too silly that car, you can't go to

somebody who was going to act on your behalf and say the difference

between this and that car, who was going to -- who is going to sell

you that car. -- to sell you. He is going to get a bonus. You must

eliminate that conflict of interest. You were talking about it before.

When people have an emergency, you explain their options and what they

can do. In our business, 30 years, not as long as Aggreko but like you,

I came into this business and I bought it because I believed in

what it did and it has eliminated, we do not pay any about in the

pitch will people a percentage. -- any of our individual people. That

is unusual for our industry. It would be helpful. Not selling one

make. What other brands do you represent? That is an example. In

our industry, we have gone through real change. In 1986, the single

capacities, as we call them, the difference of people dealing on the

road account and advising and walking alongside others, that was

done away with. -- on their own. As a result, it has led to the kind of

excesses but in investment banks and banking generally which I

believe has been a very large part of the financial crisis because we

put these together, there are immense conflicts between

businesses and people and as a result, we have all kinds of

problems. What I want to know is this. The

reason why these markets in information and expertise and

advice, one reason why they may not worked very well is that if you

were, let's say, the estate agency. If you like the honest estate agent,

you're not going to do very well. Rupert, you talked about reputation.

That is what you work for and you want to be in business in 50 years.

If I am an honest estate agent, and I am not exaggerating, I am not in

business for five minutes. A good on -- example of estate agents is

you have three estate agents to value your house, which one do you

pick? The one who exaggerates. Not the one who says, I'm terribly

sorry. Clearly, I wouldn't make too much of it in terms of the estate

agents or the motor mechanics. We have got to the place we are being

with these sorts of complexities of the last 10,000 years and we kind

of model prove. The conflicts we are talking about in these large

institutions was never before existed, the financial institutions,

Ra more recent occurrence. -- which. -- are a. People are very savvy at

buying. Why aren't there more car mechanics? Why do they not make

more money? This car mechanic and that, can it. It is the reason

people would ask for you instead of somebody else. Who was your

principal competitor? We have lots of competitive. And no peers?

think it's been about understanding that people buy from people, that

is what it comes down to. personal recommendation of the

person was used that mechanic previously and got a good service

means everything and that is how you align the person buying your

service and you because if anybody in my business blows up our

reputation, that is 30 years down the drain. You were absolutely

right. It is very difficult to go by that quality of service if your

interest is directly against the interest of the person who you're

actually dealing with on the side. It does need to be very Clear who

you are dealing with that. Is he really acting on behalf of you or

acting on behalf of himself? There is such a thing as probation will

epics. Lawyers, for example. -- professional ethics. Doctors.

Professionals to sell expertise. They are expected to behave in a

certain restraint kind of way. There are rules against advertising

in the medical services. There is a Hippocratic oath. All sorts of

stuff that makes doctors feel like, my job is not about selling. This

whole area of epics is really important. If you're generally

doing something for the person you're trying to serve, you're a

big sum in the right place. That is what a doctor is trying to do. --

your ethics. That is what a lawyer is trying to do. I think that

really does lead to the whole issue of actually directing people and

the care that people have for others. That ought to underpin

every good agency relationship where basically people are doing

You do have this problem. If you have these are great ethical things,

ultimately, people organise things for their own convenience. You are

20% more likely to have serious consequences and die of an ill the

-- any on Saturday rather than Monday to Friday. Because the

consultants are out playing golf. You have to be careful. These

relationships we have a customer hiring a professional - it is very

general. In some ways, your sharers a point you as experts to run their

companies, don't they? You do not have shareholders? Might company by

all the shares. The other two, you have shareholders? In any

commercial company, the directors get comfortable with the

shareholders of a company. The shareholders want a long-term,

successful company and they will only get that if they look after

their customers proper. Rupert has had a business which has been

around for many years. He has done that because he has been looking

after the customers and the shareholders. There is a

convergence of interest. If you can get it to work, it is very good.

You are an agent of your shareholders? I always say to

people. I am a hard -- who hired hand. That has been a really say

she -- relationship. Management treat shareholders like mushrooms

and they keep them in the dark and occasionally throw money on them.

Over the last 30 or 40 years there has been these dual track approach.

One of getting managers to have been just an to have improved

governments. On the whole, and direction of both of those had been

correct and have corrected a problem. In the 1960s, there was no

connection between a ownership and management. I would like to cambers

your views on religion. There is a debate going on in this country

about the role of religion in the state. A local council was told it

was not allowed to have prayers before council meeting. What place

does religion have in business? Gavin, you're in the Church of

England? The General Synod. I am a member of the advisory group.

us that affect your day off work when you go into the office?

much is made of the symbolism of religion and not enough of the

values which underpin it. Let me explain what I mean, in most

businesses, we have the values we based the business on. To treat

others as you wish to be treated yourself, for example. It was

brought about as a result of canvassing all the staff. Can you

see a bit of a relationship they between love your neighbour as

yourself and basically treat others as you would treat yourself? There

is a commonality. When you look at the Gospels, they are about how we

should behave with one another and that is one the teaching is. It is

not about the symbolism, what we wear, whether we were any closer a

head gear, it is about how we behave with people that we meet and

come across day by day. Everybody does that on the street. Yawn

normally this - you're normally ethical in new business life and it

reflects your religious content without having to be explicitly

Christian in your behaviour? way you should behave in a decent

society is to care about others and have respect for them. One of their

core value is respect for others. Come on, you'd soon. In Aggreko we

have about 6,000 people. I stopped counting the 22 religions. We need

to be sensitive about that. But we do not let it impinge into our

daily business for a couple reasons. First of all, CEOs to think they're

geniuses at business are bad enough but if you also -- if they also

think they are gone it makes some really bad. But I agree that it

does not stop you having a real strong foundation, a strong ethical

and moral foundation. Be at the 10 Commandments - they have some

pretty strong things. Do not cover it somebody else's things. Adultery

is it bad thing and it is lethal in in the office. I am all in favour

of having an underpinning of morality about the way you do

business but not pretending that we are ourselves of God. It's hello,

what about you take? His religion something that can be tolerated,

promoted? We work for companies all over the world, candidates all over

the world and therefore you have to be respectful of people in the

workplace. I was raised in a strong Anglican household and I hope I

have raised my children in a similar way. It is all about doing

something else for other people before you ever think about

yourself. This is what happens. Would not your shareholders...

not have any shareholders. Wouldn't they say I expected to do things

for the company? Shareholders are investing for the 25 years. You're

night, who are about 50, will not be able to draw a pension for

another 25 years. In those 25 years they would be best served if we do

good to other people. Couldn't it will split up, good said look for

me where things are nicer and it was said look for me with things

are nasty. Do not leave them because wants to say goodbye to me

you'll never see me again. People do unconditional things other

people. They genuinely have that care and personally I feel that is

part of the unconditional love which is God, which is flowing

through people, and if it goes free, it is the most wonderful experience

and interestingly, it is not in any way dependent on what religion you

practice. The incredible presumption that God only talks

through Christians... God will talk to anyone got wants to talk through.

You are talking through a liberal - - as a liberal-minded Christian,

there are Christians to a more hard? Of the Anglican

interpretation is often seen as being based on the three-legged

stool - tradition, scripture and reason will stop it is true to say

that some people weigh more heavily on the tradition and particular

bits on -- of the scripture then the logic. The logic to me is the

unconditional love. That is what underpins all sorts of businesses.

If you act like that you will have a good reputation, people will

recommend you and you will be around for 50 years. When you do

the calculation, you can get an extra three hours a week for 50

other people by forcing them to work on the Sabbath or coming up

with a dependent policy, the cost benefits tell you is not worth it.

This is not the only issue as pertaining to mothers, part-timers,

there are lots of challenge us and in every case, the thing to do is

to be tolerant, respect for and help somebody else. In its to be

brave enough to encompass what people want to do. But it does not

want it to be so broad that people coming in sneakers and at one pair

of jeans. Certainly not in my business. I notice you do not have

a tie on today. On that night. Let us draw to a close. Just time to

thank out guests - Heather MacGregor, Rupert Soames and Gavin