:00:07. > :00:12.Ahmadinejad. Now, it is time for The Bottom Line.
:00:12. > :00:16.You know the feeling. Just when you think everything is sorted out, the
:00:16. > :00:22.world has an annoying habit of delivering a nasty shock, forcing
:00:22. > :00:25.you to sort it out. As it is in business, especially for my three
:00:25. > :00:29.guests. They each run companies that have had to reinvent
:00:29. > :00:34.themselves. They live to tell us the tale to thought they will tell
:00:34. > :00:37.us what our children should learn in school.
:00:37. > :00:47.Influential business leaders gather for the BBC Radio 4 programme The
:00:47. > :00:56.
:00:56. > :01:02.Bottom Line and now you can see it We will start by taking a few
:01:02. > :01:10.minutes to meet each of my guest. First is Rooney Anand who was chief
:01:10. > :01:15.executive of the pub retailer Greene King. Main grounds? Greene
:01:15. > :01:25.King IPA, Speckled Hen, Hungry Horse, Old English Inn, Loch Fyne
:01:25. > :01:27.
:01:27. > :01:37.and the pubs? Dog and Duck. One of our destination sites. Hungry Horse.
:01:37. > :01:38.
:01:38. > :01:44.If I said to you, what is your business? What portion is beer?
:01:44. > :01:49.We started in -- as a brewer in Suffolk. In the last 20 years we
:01:49. > :01:53.have accelerated towards being a pub retailer. There is a huge
:01:53. > :02:01.debate about a minimum pricing for our core. To that effect you or are
:02:01. > :02:09.you over the minimum price range? would hope that we are. I know we
:02:09. > :02:16.are. It is 40p per a colicky net. It would help you? I don't think it
:02:16. > :02:20.would wipe out... There has been a profound change in the use of
:02:20. > :02:27.alcohol in the UK. The subject of binge drinking has been widely
:02:27. > :02:35.reported. It is a threat to society. It is a threat to administer if --
:02:35. > :02:41.administrative cost in terms of health and safety. I took my father
:02:41. > :02:49.to a pub last DN was stunned at 4am to see security guards protecting
:02:49. > :02:54.the staff. -- at the hospital. It is a society issue. The price of
:02:54. > :02:58.alcohol in supermarkets and convenience stores has become
:02:58. > :03:05.perilously low end is accelerating the advent of binge drinking. We
:03:05. > :03:09.are very much against it. We are in favour of setting a minimum price.
:03:09. > :03:16.Also with us is Rupert Gavin who is chief executive of Odeon and UCI
:03:16. > :03:24.Cinemas Group.. Describe to worse you business. It is substantially
:03:24. > :03:30.UK. In increasingly, we are across the whole of Europe. We are the
:03:30. > :03:34.largest cinema chain in the UK. Also the largest in Spain and Italy.
:03:34. > :03:41.Substantial in Ireland, Germany, Portugal. We are the largest cinema
:03:41. > :03:47.chain in Europe. The fifth largest in the world. You are owned by
:03:47. > :03:52.private equity. The founder of terra firma had one of my favourite
:03:52. > :03:57.ever quotes in business. He was fed up by the number of cinema managers
:03:57. > :04:01.who are flying to LA fought movie premieres. He said, my managers
:04:01. > :04:06.think they are in the movie business. I have had to explain to
:04:07. > :04:10.them they are in the popcorn business. We have always known we
:04:10. > :04:14.are in the customer service business. We are providing films
:04:14. > :04:19.and good-quality films as well as an increasing range of food and
:04:19. > :04:24.beverage. We have just started our first in screen dining cinema where
:04:25. > :04:31.someone can have a gourmet meal while watching a film. That is an
:04:31. > :04:37.idea of the scope of the journey. We have gone from popcorn.
:04:37. > :04:42.manager of an individual cinema, day job... To they have any say
:04:42. > :04:48.whatsoever about what films happen in the cinema? They have a lot of
:04:48. > :04:51.views. They have local knowledge. That is fed into the system. But it
:04:51. > :04:55.is essentially determined and we have relationships with the studios
:04:55. > :05:02.which we also have to work with. It is an interesting interactive
:05:02. > :05:07.process. When we had the Iron Lady plane, our manager of the Liverpool
:05:07. > :05:12.cinema was pretty clear that within Liverpool, whatever it was going to
:05:13. > :05:18.do nationally, it was not going to play well in Liverpool. A film
:05:18. > :05:22.called The Goon outsold the Iron Lady in Liverpool. Every film has
:05:22. > :05:27.its own particular characteristic. You have got to understand your
:05:27. > :05:33.demographic. As a manager, you have to understand your audience. It is
:05:33. > :05:37.very rapid. The first weekend, then it can be off if it is not working.
:05:37. > :05:42.The life cycles... It is the most Darwinian market I have ever worked
:05:42. > :05:48.in. Somebody works for years, spent hundreds of millions, you start on
:05:48. > :05:53.a Friday and if by Monday morning it is not working, it is over.
:05:53. > :06:00.Beautiful, isn't it? Finally with us is Ian Livingstone who is the
:06:00. > :06:06.chief executive of BT Group. I asked the others what the business
:06:06. > :06:13.is, pubs or brewing, popcorn or movies. What is your business?
:06:13. > :06:20.has changed. People know us as a company with the telephone in the
:06:20. > :06:24.hall. We have changed a bit. 10% of our business is making voice calls.
:06:24. > :06:29.The quarter of our business is outside the UK. Half of our
:06:29. > :06:33.business serves multinational customers. That is a huge chunk. I
:06:33. > :06:41.have read this so many times and I don't understand. What do you mean
:06:41. > :06:45.when you say that? If you are somebody like Nestle, Fiat,
:06:45. > :06:51.Phillips, you are around the world. You need somebody to connect your
:06:51. > :06:57.network. To protect your data and manage your network. But your own
:06:57. > :07:03.cables so you are selling cable space. A lot more. We have the
:07:03. > :07:09.cables connecting but we also have to work to get the last mile in a
:07:09. > :07:18.factory in Israel, or in South America. But you're not digging up
:07:18. > :07:21.roads in Israel. Around the world, be provide network for the
:07:21. > :07:28.Brazilian Post Office. We are putting satellite dishes around a
:07:28. > :07:31.lot of Brazil. We do a bit of that. We also work with the local
:07:31. > :07:37.partners who have got the services and make sure it is for our
:07:37. > :07:44.customers. He talked about how BT Group has changed which gets us to
:07:44. > :07:47.a discussion about reinventing businesses. Pubs, cinemas, telecoms
:07:47. > :07:53.services, all very different. They say there are two approaches to
:07:53. > :07:58.life. Change the world so it suits you, failing that, changes of to
:07:58. > :08:03.suit the world. That is what you have all done with your businesses.
:08:03. > :08:07.What is it that has changed that has driven the need to alter or? We
:08:07. > :08:12.will start with you, Rooney Anand. The change has been operating at
:08:12. > :08:19.two speeds. The long-term change has been going on for 30 years if
:08:19. > :08:25.you think of how people in the UK behave and treat paths. The typical
:08:25. > :08:30.vision would have been an industrial worker, factory worker,
:08:30. > :08:37.coming in after work to a pop, the first three or four pints were
:08:37. > :08:40.fluid replacement. The last few were enjoyed, and that few after
:08:40. > :08:45.that were not remembered. That has changed in the last few years
:08:45. > :08:49.profoundly. The number of people who are more concerned about their
:08:49. > :08:56.diet... People who are concerned about drink driving, women working
:08:56. > :09:02.instead of staying at home. shift pattern is changing as well.
:09:02. > :09:07.Huge social changes. The pub industry has been trying to group
:09:07. > :09:12.gently. The credit crunch in autumn and summer of 07 was as though
:09:12. > :09:20.somebody put a big finger on the fast-forward button and bought
:09:20. > :09:24.those dangers home to roost very early. It was very noticeable for
:09:24. > :09:31.me in await, some of the high- street retailers were talking about
:09:31. > :09:37.a real change. I was wondering what was going on, say we noticed those
:09:37. > :09:41.they changes as early as autumn 07. When the images on breakfast TV of
:09:41. > :09:47.people queuing on the pavement to get their money, p 4 felt scared.
:09:47. > :09:52.They stayed instead -- stayed indoors and staggered home. A huge
:09:52. > :09:56.change in customer taste. Food has become a huge part of your business.
:09:56. > :10:02.Food you would think, people would say they would save money by eating
:10:02. > :10:09.in, but they are eating out. When we went into the recession, food
:10:09. > :10:15.was a 27% of our retail turnover, it is now 47%. In the course of a
:10:15. > :10:21.few years. Another 20% of our turnover is food driven.
:10:21. > :10:26.changes in your business card technology and customer, Rupert.
:10:26. > :10:31.Yes. The brief history is that competition has to ramp up
:10:31. > :10:38.exponentially. In the late 40s, there were 200 million visitors a
:10:38. > :10:44.year but no commercial television. No video recorders. The Pit came in
:10:44. > :10:48.the light -- the late 80s. It had gone up to 60 visits a year in the
:10:49. > :10:54.whole of the UK. Everyone was then saying it was under the pressure of
:10:54. > :11:01.commercial television. They were saying it was a war that is over.
:11:01. > :11:05.It has ended. Since then, we are that close to 200 million visits.
:11:05. > :11:10.It has more than tripled. We have been getting higher than inflation
:11:10. > :11:16.rate increases in ticket prices. We have invested in seeds and screens
:11:16. > :11:23.and IMAX technology. The three-day, we have taken the whole of our
:11:23. > :11:30.business and made it digital. Every single one of our screens is a
:11:30. > :11:33.wholly digital experience. That is what to us his reinvention. You
:11:33. > :11:38.have got to understand the technology. What can it do? Then
:11:38. > :11:43.what does the customer want? Hit rate between those two to get a
:11:43. > :11:51.business model which keeps you alive. As a result of that, we now
:11:51. > :11:57.do theatre life. We do opera life. 3D sport. A friend that, you get a
:11:57. > :12:03.flavour of the different experiences. We are about out of
:12:03. > :12:09.home leisure. We are not about film necessarily. We are about people
:12:09. > :12:12.having an affordable evening out to enjoy themselves. We have got the
:12:12. > :12:17.same comment about an infrastructure capability and using
:12:17. > :12:24.it for a lot more things. It is about leisure rather than any
:12:24. > :12:27.individual product. The leisure experience. Both of them have
:12:27. > :12:34.obviously up credit the catering over the decades as people have
:12:34. > :12:39.tended to buy more food out than in. But your business must have changed
:12:39. > :12:44.the most. That figure of one-tenth of your business is what it really
:12:44. > :12:49.all that is a voice calls. That is incredible. It has changed a lot.
:12:49. > :12:53.When I was growing up as a kid, you would remember the phone bill
:12:54. > :12:59.arriving with a time of fear and loathing. I was banned from using
:12:59. > :13:04.the phone for the rest of my life. You could not call before 6pm
:13:04. > :13:10.unless someone in the family had died. Even then you would need a
:13:10. > :13:16.medical certificate to prove it. Things have moved on. Are you
:13:16. > :13:23.comfortable with where BT Group is now? Fixed-line calls, broadband,
:13:23. > :13:28.for retail in the UK. We have got a lot more to go. What we are doing
:13:28. > :13:34.in the UK, we are up rolling it out across 100,000 homes per week. That
:13:34. > :13:40.is pretty quick. 200,000 people are employed to do that. That will open
:13:40. > :13:46.up a whole new lot of things. There will be opportunities coming from
:13:46. > :13:50.that. We are a very early stage of seeing what, for instance,
:13:50. > :13:56.broadband Kent do for people. We have started a journey but there is
:13:56. > :14:02.a long way to go. Everyone will get very excited about a video to PC.
:14:02. > :14:07.They will be able to watch I player. That is great. But bringing
:14:07. > :14:13.interactivity to your TV, you will be able to do a lot of things. We
:14:13. > :14:19.will start a revolution. It is early days yet. The future is very
:14:19. > :14:27.exciting. Any business for a moment which says, I have done it, and now
:14:27. > :14:31.I can go to bed... That is why they end up bankrupt. I was at BT Group
:14:31. > :14:37.when they finished changing everything from analogue to digital.
:14:37. > :14:42.That was a five-year programme. At the end of it, we regret to the
:14:42. > :14:47.supplier. It became the marketing department. That was the big
:14:48. > :14:53.cultural change. We went from being a supplier to people demanding
:14:53. > :15:00.things to an organisation that was going to have to market things. You
:15:00. > :15:07.have to just keep... And other three vintages. The 200 different
:15:07. > :15:12.competitors. Just to finish this segment, Kenya over to the change
:15:12. > :15:17.think? Can you jump too soon? I can imagine cold pubs that chug along
:15:17. > :15:21.perfectly well. The traditional work are still going to them in
:15:21. > :15:26.large numbers. Some fancy person with a suit and clipboard says it
:15:26. > :15:36.is time to move on... Actually, it's sometimes the best thing to do
:15:36. > :15:45.
:15:45. > :15:50.Probably not. It is the change in the environment and it may seem
:15:50. > :15:54.impossible to move in the right direction. As a result, it would
:15:54. > :15:58.not give a rate of return that we're happy with. The right
:15:58. > :16:02.decision in that scenario is every time to set. But your question is a
:16:02. > :16:07.good one. You can move ahead of your customer sometimes. You could
:16:07. > :16:11.be changing too quickly. The timing of the change is as critical as the
:16:11. > :16:17.nature of the change itself. Businesses are behind their
:16:17. > :16:21.customers tend to face extinction. But you can be ahead. We have tried
:16:21. > :16:27.to move ahead of the customer in terms of the speed in which we have
:16:27. > :16:36.converted a pub of from what we call is wet lead to very food
:16:36. > :16:42.eccentric. We have lost customers. The traditional view is the back
:16:42. > :16:46.have a pub which is food orientated or when that is much more male and
:16:46. > :16:54.sport orientated. What we have found that is helpful is being able
:16:54. > :17:01.to do both under the same roof. And had a type of manager that can run
:17:01. > :17:06.that business. A lot of it is about how to keep your traditional
:17:06. > :17:16.customers. Many have gone wrong because the traditional did not get
:17:16. > :17:26.
:17:26. > :17:29.the new. Don't lose your old. If Take a break from growing your
:17:29. > :17:35.companies. Imagine you are in charge of something far more
:17:36. > :17:38.important. A school. Even better - all our schools. You are in charge
:17:39. > :17:44.of the national curriculum. What would you like our children to be
:17:44. > :17:54.taught? Business tends to have a view that education has gone to
:17:54. > :17:54.
:17:54. > :17:59.hell. What would you like to be taught in schools? I would be
:17:59. > :18:07.slightly contentious. I would make quite dramatic changes. I would
:18:07. > :18:12.reduce the obsession with testing and examining children every week.
:18:12. > :18:19.We have a whole educational system focused on getting results as
:18:19. > :18:26.opposed to teaching people. Then we have to ask what do we wish to
:18:26. > :18:33.teach our children for. It is for life but it is also for the health,
:18:33. > :18:41.success of the country. I cannot see anywhere - a strategic decision
:18:41. > :18:46.of what this country should be good at. And what we should be packed --
:18:46. > :18:50.prioritising - training and teaching our children. It is a very
:18:51. > :19:00.broad education a week give. It is ever focused on numeracy and
:19:00. > :19:08.literacy. Over focus? I had never heard anyone argue that.
:19:08. > :19:17.Unsuccessfully at -- over focused. Failing to produce the creative,
:19:17. > :19:20.the financial services focus on what our country's strengths are. I
:19:20. > :19:25.am not saying anything that has not been said before. The last
:19:25. > :19:32.government looked over these. They had a wonderful team of educational
:19:32. > :19:40.and visionary mines, they submitted a report in 1999 and it was
:19:40. > :19:45.immediately thrown away. It was too difficult to think about. I am not
:19:45. > :19:49.quite with him. I think maths and English have to be at the core. If
:19:49. > :19:54.we are ever focusing on it, we're not doing it very successfully.
:19:54. > :19:58.We're looking for 500 applicants and we had over 20,000 applicants.
:19:58. > :20:03.About one-quarter of the people could not fill out the form. But
:20:03. > :20:09.the people we recruited, we are looking for grade C in maths and
:20:09. > :20:19.English. We had to change a significant portion it in maths and
:20:19. > :20:21.
:20:21. > :20:27.English when they joined us. What age is this? 16 to 18? Yes. 16 to
:20:27. > :20:34.20 probably. We got some great people who just needed some help.
:20:34. > :20:41.Our apprentices are absolutely Fabulous. We need to get the call
:20:41. > :20:47.and then get people to see what they wanted to. My wife was in
:20:47. > :20:54.business for many years like me. Then she became a teacher. IDG
:20:54. > :21:04.about opinions on this subject with alarming regularity. -- I get to
:21:04. > :21:10.
:21:10. > :21:15.hear about. The debate in this has been too political. There is a
:21:15. > :21:22.basic question - I had this idea met with my wife Pre's friends and
:21:22. > :21:28.is a French teacher and has spent the last 24 years teaching - she
:21:28. > :21:34.compare and contrast to the French education. My basic question is
:21:34. > :21:40.what is the point of education? Is there to ensure you have been
:21:40. > :21:46.crying minds? I like to think it was both. You might think it is
:21:46. > :21:56.this about equipping business. can't have an either or.
:21:56. > :21:58.
:21:58. > :22:08.problem is, you really do not know. To setback caused at 11, 13, 15 or
:22:08. > :22:14.
:22:14. > :22:19.even 18 is tough. We have over 20,000 employees and over one third
:22:19. > :22:26.of them are under 25. The basics and a good enough. The quality of
:22:26. > :22:32.the basics in terms of numeracy and literacy are to know. There we are
:22:32. > :22:38.good again in test scores. That is but we're getting the polarity of
:22:38. > :22:45.what we're hearing which is we are getting better results but when we
:22:45. > :22:50.are looking abroad intakes, they cannot do it. Under tested, under
:22:50. > :22:55.port. That is what I fear. We're becoming world exports at hitting
:22:55. > :23:00.test scores. That is very different are being educated. Let's talk
:23:00. > :23:04.about how the way you would structure education. Is there an
:23:04. > :23:07.analogy about what you're talking about. How much power would you
:23:07. > :23:15.give to the locals to run the businesses they want and how much
:23:15. > :23:21.the bring into the centre? Is there a teaching issue? The most
:23:21. > :23:25.important thing is the manager in business. It is the same as the
:23:25. > :23:30.teaching. Giving power to the teachers is very important. Great
:23:30. > :23:34.teachers are the most important thing for any kid in the classroom.
:23:34. > :23:40.Studies showed that is the biggest variable. You want to give them
:23:40. > :23:45.more power. But to give them more power you need to make sure you
:23:45. > :23:50.have a really good people. This is similar to business. We have to
:23:50. > :24:00.give more priority to teachers. And Barry teachers are a lot more, it
:24:00. > :24:10.is the same as business. But now we have gone through this road of and
:24:10. > :24:12.
:24:12. > :24:21.list test. -- endless. Great teachers make the difference.
:24:21. > :24:27.Empowering them is the border been. Lead straw the end to this
:24:27. > :24:36.conversation. Time to thank our guest. I will be back with more