:00:05. > :00:14.in the capital, Damascus. Now on BBC News it is time for The
:00:14. > :00:18.Bottom Line. Can you turn a mediocre manager
:00:18. > :00:26.into a brilliant boss? Self-help books may try. Good leaders are
:00:26. > :00:35.still hard to come by. I will ask my three guests what leadership
:00:35. > :00:40.skills consist of and if they have them? How would we cope to use 20%
:00:40. > :00:50.less of everything. Each week we have guests on The Bottom Line. Now
:00:50. > :00:57.
:00:57. > :01:01.As always, we start by spending a few minutes meeting each of my
:01:01. > :01:06.three guests. First up, Martin Gilbert, chief executive and co-
:01:06. > :01:11.founder of Aberdeen Asset Management. It is Scotland's
:01:11. > :01:16.largest money manager, Martin? is. Not that that's much
:01:16. > :01:21.competition. We're still number two to Schroeders. I would love to be
:01:21. > :01:26.bigger than them. That is my ambition. You ae had a good year?
:01:26. > :01:31.It' -- You've had a good year? been fantastic. We have been in the
:01:31. > :01:35.right place at the right time. We are one of the leading asset market
:01:35. > :01:42.managers. The world is putting money into emerging markets and
:01:42. > :01:45.especially Asia. So, if someone in America or the UK or Europe decides
:01:45. > :01:50.to put money in there they will usually come to us and give us the
:01:50. > :01:55.money. Our problem is we have too much money to invest, which is a
:01:55. > :02:00.fantastic problem to have. OK, ten years ago, I mean the company did
:02:00. > :02:08.sink, didn't it. I think people wondered whether it would survive.
:02:08. > :02:15.There was some kind of mis-selling scandal. We were the leading market
:02:15. > :02:20.leader in trusts. I did two Treasury Select Committees and an
:02:20. > :02:25.investigation by the regulator. Our share price went down 95%. It was
:02:25. > :02:32.really quite a difficult period. We almost, most of the world didn't
:02:32. > :02:40.think we would make it through, but we did and recovered strongly.
:02:41. > :02:45.Most CEOs don't survive a 90 fall. I survived a 95% fall. So, it's
:02:46. > :02:51.been a remarkable recovery. Just last week, we got in the FTSE-100.
:02:51. > :02:56.So it has been quite a turn around actually. Were you running the
:02:56. > :03:00.company when it got into this mess? Sadly. I offered my resignation,
:03:00. > :03:06.hoping the board wouldn't accept it and they didn't, thank goodness. So,
:03:06. > :03:12.they told me, look you got us into this mess, you sort it out. With us
:03:12. > :03:17.also is Allan Leighton, chair of the set-top box maker Pace. Allan,
:03:17. > :03:22.you have been a non-executive director on so many boards we would
:03:22. > :03:32.fill the programme listing them. Pace makes set-top boxes hofplt is
:03:32. > :03:33.
:03:33. > :03:37.the biggest mer? Most of our -- Boxes. Who is the biggest mer?
:03:38. > :03:42.is based up in Yorkshire. It is the biggest set-top box producer in the
:03:42. > :03:44.world we are proud of the fact that we have some great engineers.
:03:44. > :03:48.People talk about engineering and things like that. It is all around
:03:48. > :03:53.the world. We think that up in Yorkshire we have some of the best
:03:53. > :04:01.engineers in the world. It's had a difficult year. I would have
:04:01. > :04:05.thought it's - conditions are good for set-top boxes, in contrast to
:04:05. > :04:10.Aberdeen Asset Management. You've had the good year and you've had
:04:10. > :04:14.the bad year. Set-top boxes is an industry which continues to grow.
:04:15. > :04:20.Pay TV around the world is growing. And will continue to grow. We've
:04:20. > :04:26.had a difficult year, for a number of reasons. I think we,
:04:26. > :04:31.unfortunately, had this tsunami in Japan, which affected the parts.
:04:31. > :04:34.Even worse was they land, because the drives are made in Thailand.
:04:34. > :04:40.Most of ours were under 30 foot of water. They are reasons, but not
:04:40. > :04:46.all the reasons. I think the business needed a sort of different
:04:46. > :04:50.direction. I sort of came in the middle of year. We did a strategic
:04:50. > :04:54.review. Everybody talks that business will die, over the top
:04:54. > :04:58.will make a difference. It's all complimentary. If you go to the US
:04:58. > :05:03.and see how it works, that's how it works. We are confident about the
:05:03. > :05:09.industry. We just need to use our engineers in a better way. We need
:05:09. > :05:12.to be a bit more, not just the set- top boxes, but what is described as
:05:12. > :05:18.the middle way, user interface, which make it easier in people's
:05:18. > :05:24.homes to do things. You do manufacture in Britain as well?
:05:24. > :05:30.All our manufacturing is done overseas. All of the engineering
:05:30. > :05:35.work, which is.... I am going to simplify it, the manufacturing, in
:05:35. > :05:41.a strange way, is the easy bit. We have people, up in Yorkshire, in
:05:41. > :05:45.India, in the US. It's a pretty global business. Talking of
:05:45. > :05:48.manufacturing and engineering, my final guest is Nigel Whitehead, who
:05:48. > :05:54.runs the operations BAE Systems, the defence contractor here in the
:05:54. > :06:00.Nigel, why don't you spell out the range of things that BAE Systems
:06:00. > :06:05.does? Across the world we are a preemyeer player in defence and
:06:05. > :06:11.security. In -- premier player in the defence and security. In the UK
:06:11. > :06:16.we have ship building, military aircraft, principally in the north-
:06:16. > :06:21.west of England. We provide siber security to customers. We have �7
:06:21. > :06:27.billion Port of business in our UK facilities, of which just over half
:06:27. > :06:31.goes into the UK Government and the rest into export markets. The US is
:06:32. > :06:36.not actually the biggest market for BAE Systems? In fact our biggest
:06:36. > :06:41.market is the United States, where we have 50,000 employees and
:06:41. > :06:46.deriver half our profit. We have other markets in Saudi Arabia,
:06:46. > :06:55.India, Sweden. It feels like it has been a difficult few months for BAE
:06:55. > :06:58.Systems. The big decision to close the Brough factory.
:06:58. > :07:04.Governments cancel contracts and you are left with factories that
:07:04. > :07:08.you cannot run. What has been happening? Everybody would say it
:07:08. > :07:11.is a difficult industry to be in, full stop. If you look at what has
:07:11. > :07:15.happened over the last couple of months, it does appear there is a
:07:15. > :07:19.lot on the list. The reality is that we are responding to changes
:07:19. > :07:24.in our marketplace. Our customers are deTyneing what it is they want
:07:25. > :07:28.to spend money on. They are putting money into cybersecurity. Spending
:07:28. > :07:33.less on some traditional defence methods that have been used in the
:07:33. > :07:38.past. We are responding to that, matching supply to demand. Yes, we
:07:38. > :07:45.announced some potential job losses back in September last year, which
:07:45. > :07:48.included the cessation of manufacturing in Brough and we have
:07:48. > :07:51.been in consultation in that industry. For something in this
:07:51. > :07:55.industry, it hurts. I am having to deal with the size and the shape of
:07:55. > :08:00.the industry I have grown up in, from that point of view, well
:08:00. > :08:05.positioned, to actually understand what the consequences and make sure
:08:05. > :08:10.we have a long-term viable future, not just aircraft, but in
:08:10. > :08:14.submarines, warships. All right. Let's move to our first
:08:14. > :08:22.main topic, which is leadership. Now a huge number of books have
:08:22. > :08:26.been written on this, including two by you All arc n. Tough Calls and
:08:26. > :08:31.On Leadership. I confess to being sceptical about all this talk. It
:08:31. > :08:37.is a topic that if you need it explained to you, you probably
:08:37. > :08:44.don't have it. High don't you set out your thesis of leadership.
:08:44. > :08:49.sceptical as you are. The reason I wrote the books, other than to
:08:49. > :08:54.raise money for Breast Cancer Care. I had read and seen so many booblgs
:08:54. > :08:59.about leadership, written by -- books about leadership, written by
:08:59. > :09:04.people who have not done it. The idea in it was to take people who
:09:04. > :09:09.do it. I was, I learnt how to lead by watching other people. I mean,
:09:09. > :09:12.there's no magic. You have some skills. You get training and then
:09:12. > :09:18.you develop. And so my whole thing on leadership is, look at the
:09:18. > :09:24.people who are good at it. See what they do and learn from them. One of
:09:24. > :09:28.your presents is that good leaders keep it simbl. They strip out the
:09:29. > :09:35.complexity and get to the essence rather than being bogged down in
:09:35. > :09:41.the detail of it all. Absolutely. We talked before about jargon. It
:09:41. > :09:46.is just terrible. You know, the art of leadership is
:09:46. > :09:51.to create follow-ship. It is about making it clear what people need to
:09:51. > :10:01.do and talking with them, not at them, in a way in which they can
:10:01. > :10:06.
:10:06. > :10:13.understand what you are putting out. So, I am very anti-all the talk.
:10:13. > :10:17.is EQ rather than IQ. Emotional? Emotional intelligence, especially
:10:17. > :10:22.in the business I am in, the fund management business, where you are
:10:22. > :10:27.dealing with people. There are no assets. All we have
:10:27. > :10:32.are these top fund managers. They are not these sort of confident
:10:32. > :10:36.figures everyone thinks they are. They are like, they are like normal
:10:36. > :10:41.people. When they go through a bad time, that is when you have to the
:10:41. > :10:49.old arm around them. I always think fund management is a bit like
:10:49. > :10:56.football. Sir Alex Ferguson is my hero, you see. Alex Ferguson, to me
:10:56. > :11:02.epitd tommiezs man management. At about der dean he had a team of 21
:11:02. > :11:07.-- Aberdeen, he had a team of 21. He developed this skill and learned
:11:07. > :11:11.how to handle it. That is what leadership is about. It's about
:11:11. > :11:15.having that ability to handle people differently from, so you
:11:15. > :11:19.don't have one formula. Each person needs to be handled very
:11:20. > :11:23.differently. EQ is something you cannot teach. You can teach other
:11:23. > :11:27.skills. One thing I have learnt over the years and we probably all
:11:27. > :11:32.have is delegation. When you first start you do everything yourself.
:11:32. > :11:38.Then you quickly realise if you continue to do that you'll be dead.
:11:38. > :11:42.How about it? I violently agree with everything they have said.
:11:42. > :11:48.He's also from Aberdeen. Surrounded!
:11:48. > :11:52.In particular to the issue of can you learn from a book? I think that
:11:53. > :11:59.most of the leadership skills are innate. There is a lot you can do
:11:59. > :12:03.to improve your leadership skills. But seldom is that done from the
:12:03. > :12:11.book directly. Our experience is that if you give people experience
:12:11. > :12:15.in leadership roles, give them exposure to big leadership
:12:15. > :12:18.conundrums and learn from those who have led in different circumstances
:12:18. > :12:23.then a lot will rub off. People will concentrate then on some of
:12:23. > :12:27.the key things we have talked about, such as clarity, as something which
:12:27. > :12:30.is important for role of leader to. The issue of fellowship, I think
:12:30. > :12:34.that is essential. If you have the list of all the courses you have
:12:34. > :12:39.been on, all the opportunities you have had to learn, but if people
:12:39. > :12:42.don't follow you, you are not a leader. One thing you have to do is
:12:43. > :12:47.recognise people will judge your motives or try and work out who you
:12:48. > :12:51.are, what you are likely to do next. If you communicate naturally. If
:12:51. > :12:55.you are somebody who is relatively straightforward in dealings, the
:12:55. > :13:00.chances are that you improve your chances of being a leader. I want
:13:01. > :13:05.to ask whether you think you are good leaders? Allan you set out the
:13:05. > :13:09.distinction of being a good manager to being a good leader.
:13:09. > :13:19.I think the Aberdeen guys are really good.
:13:19. > :13:26.
:13:26. > :13:34.I am a good communicator. I do have some glaring weak mixers, I am lazy
:13:34. > :13:38.and so on, but I am a good delegate to. And the clarity, you can stand
:13:39. > :13:44.back and be clear? I am not as clear as some of the people who
:13:44. > :13:50.work for me. Sometimes you have to temper the real clarity because it
:13:50. > :13:54.can be brutal. Sometimes you have to temper that a message. Give
:13:54. > :14:02.people different messages, because you have got to treat everyone
:14:02. > :14:08.different leaf. Nigel, are you a good leader? I find that difficult.
:14:08. > :14:14.A good leader has to be modest. recognise some people think I have
:14:14. > :14:19.a positive effect. But I wrestle with issues all of the time. And
:14:19. > :14:25.wrestle with being on top of your game all of the time, been way you
:14:25. > :14:29.need to be all the time. Seeing those leadership decisions,
:14:29. > :14:35.wandering why people think you don't always take them. It is a
:14:35. > :14:40.real struggle. It would be wrong for me to say I am a great leader.
:14:40. > :14:46.I think I am somebody in a leadership role that has a lot of
:14:46. > :14:52.expectation on me. You write about it obviously? I say to everybody, I
:14:53. > :15:00.am not cheap executive officer anymore. It is probably the best
:15:00. > :15:06.job in the world, but it is the hardest job. It is 247. And anybody
:15:06. > :15:13.who does not do that, cannot do it. I say to people, even the best
:15:13. > :15:19.leaders I know I'll write 70% of the time. And that is a good strike
:15:19. > :15:24.rate. You have to realise, which is pretty good, because you are wrong
:15:24. > :15:30.a third of the time, and it is a liberating. It makes it easy for
:15:30. > :15:37.years. Often you have to change your mind. I put myself in the pack.
:15:37. > :15:41.I'm probably right 70% of the time, and I am probably wrong 30% of the
:15:41. > :15:47.time. And it is when I am wrong and how quickly you fix that which is
:15:47. > :15:57.probably the test. Martin, you are on the board of BSkyB, and non-
:15:57. > :16:02.executive member? A recent edition. I took over from Alan. You have got
:16:02. > :16:08.both of us here. While we have got you here, we should ask you about
:16:08. > :16:12.BSkyB because it has a leadership headache at the moment, because it
:16:12. > :16:18.is chaired by James Murdoch who is entangled in the affairs of News
:16:18. > :16:24.International. What is happening? Jeremy Darroch is one of the most
:16:24. > :16:28.outstanding people. The chief executive? The chief executive and
:16:28. > :16:33.as the lead it is outstanding. have had him as a guest on the
:16:33. > :16:37.programme. Top guy and you wouldn't think it when you first meet him
:16:37. > :16:40.and speak to him. He is an incredible leader and spends his
:16:41. > :16:46.time motivating people in the business. It is an incredible
:16:46. > :16:56.company. What about the issue of the chairmanship? James Murdoch has
:16:56. > :17:02.not noticed, apparently, a major scandal? James was a very, very
:17:02. > :17:09.good chief executive officer. He transformed the business. It was
:17:09. > :17:16.entirely right that he step up to chairman. Take Jeremy, who he
:17:16. > :17:21.recruited, he recruited the whole top team running Sky at the moment.
:17:21. > :17:29.Obviously there is a lot of publicity at the moment over the
:17:30. > :17:36.whole thing. If is particularly over the management skills, who was
:17:36. > :17:42.apparently unaware in his own company... I am not sure I read
:17:42. > :17:52.every e-mail to the bottom. I feel for him. He is a good chairman and
:17:52. > :17:55.
:17:55. > :18:00.he got active by the majority of shareholders. We will have to wait
:18:00. > :18:04.until the select committee reports. Do you think his company would be
:18:04. > :18:11.strong if it was not linked to News Corp, the global operation led by
:18:11. > :18:15.Rupert Murdoch? Would it be a stronger company? We did beat a
:18:15. > :18:20.strong company? It wouldn't be as strong as it is today if it wasn't
:18:20. > :18:27.for the amount of effort the Murdoch empire had put in and
:18:27. > :18:32.supported it. If Ofcom came along and said in order to remain a fit
:18:32. > :18:36.and proper licence holder, you shouldn't be connected? It is a
:18:36. > :18:42.stand-alone company, with its own management team with James as
:18:42. > :18:46.chairman. But no management influence. It is a superb
:18:46. > :18:54.management team. I know I keep saying that, but they do run it for
:18:54. > :18:57.the benefit of all shareholders. was on the board for 13 years. I
:18:57. > :19:04.remember when the business lost a billion pound. The transformation,
:19:04. > :19:08.I go back to a half-empty, half full, the transformation of that
:19:08. > :19:14.company has been tremendous. What is the most important thing is the
:19:14. > :19:21.company, how it as chrome and the value it has generated for what it
:19:21. > :19:27.shareholders. -- groaned. We have to remember news is a minority
:19:27. > :19:35.shareholder in the company. Two thirds of the company is owned by
:19:35. > :19:39.institutions. And the vast majority over a period of time, the running
:19:39. > :19:48.of the company and the performance of the company and value for them
:19:48. > :19:54.has been first class. We will have to see how things develop. But it
:19:54. > :20:00.is... Remember the lead in the company is always the chief
:20:00. > :20:04.executive officer, it is not the chairman. A new exhibition at
:20:04. > :20:13.London's Design Museum it asks us to think about how products would
:20:13. > :20:19.look if we use 20% less material in making them. Could we survive?, how
:20:19. > :20:26.would it affect your business if it would -- if you were presented by
:20:26. > :20:32.that challenge? We have a manufacturer, a service company in
:20:32. > :20:37.asset management. Could you reduce the amount of material you used in
:20:37. > :20:45.products? Energy costs in terms of running factories, huge
:20:45. > :20:49.consideration. The site on the North West of England has a �7
:20:50. > :20:54.million electricity bill. There is a business incentive to reduce it.
:20:54. > :20:59.Anything we can do their reduces that energy consumption makes a
:20:59. > :21:07.material difference to the efficiency of the business.
:21:07. > :21:11.Recently I builds a new building at Salisbury. It replace 38 old
:21:11. > :21:16.buildings and the energy costs of the old buildings which dated back
:21:16. > :21:22.to the 50s and 60s, is wiped out. What we saved on the energy costs
:21:22. > :21:30.paid for the new building which houses 1,600 people, pays for
:21:30. > :21:40.itself in two years. We should be pulling old buildings down all over
:21:40. > :21:48.the place. I have some 70 sites around the UK. Not particularly
:21:48. > :21:53.nice office accommodation but cheaper to run. Even I can
:21:53. > :21:58.understand the economics. It is not a green agenda, just good business
:21:58. > :22:05.economics. When I first started in the industry, you can imagine the
:22:06. > :22:14.heat generated by the screens. Now every screen is switching off at
:22:14. > :22:18.7pm at night. But 10 years the paper that was delivered from
:22:18. > :22:26.brokers' research, was up to here. Now it is all electronic so there
:22:26. > :22:32.has been a massive reduction in waist. Ken Morrison of Morrison's
:22:32. > :22:38.supermarket. When I started in the supermarket business, he was a hero,
:22:38. > :22:46.in a strange way. I went to see him in Bradford and we were walking
:22:46. > :22:51.round his office, and he said to me, have you notice something? I said,
:22:51. > :22:56.what is it? He said have you noticed how few photocopiers I have
:22:56. > :23:02.got? I said, I don't think I have. He said when you go back to your
:23:02. > :23:06.office, count how many photocopiers you have got, and how much paper is
:23:06. > :23:14.on the bottom. If you cut them by heart you'll save yourselves
:23:14. > :23:20.millions of pounds. He was right. - - cut them by half. In the back of
:23:20. > :23:25.supermarkets, things are racked with string. There is a lot of it,
:23:25. > :23:29.and it can get in the way of the Compaq does and block them up. He
:23:29. > :23:37.had all of his string made in that you could never use more than a 12
:23:37. > :23:42.inch piece of string. And so, before you get to packing, there
:23:42. > :23:50.are so many things that really are the nuts and bolts that make a
:23:50. > :24:00.difference. He was the leading expert. He did get down to the
:24:00. > :24:04.
:24:04. > :24:14.detail. It was amazing. We could make the programme 20% shorter, but
:24:14. > :24:15.
:24:15. > :24:21.it is already compact enough. To my guests, thanks for coming. I will