Turnaround: The leadership of John Harvey-Jones

'During the last twenty years at the beginning of each year I have taken a few hours out to write down on a pad which I keep in my desk drawer the hopes and aspirations that I had for achievement in the coming year.'

That's a classic example of personal focus on results. The writer, Sir John Harvey-Jones, used his own focus to transform the results of the company he chaired - Imperial Chemical Industries. One of his predecessors had remarked that 'You can't turn a large company like this round every 18 months.' This blinkered attitude goes a long way towards explaining why, in 1981, ICI ran into a crisis that required a massive turnaround - and Harvey-Jones achieved that well within 18 months.

He threw aside the negative and accentuated the positive in his determination to make ICI 'the best chemical company in the world'. It was no necessary part of that ambition to focus on one specific result: the target of earning a British record profit of a billion pounds in 1984. But the number (which Harvey-Jones knew was feasible) gave a tangible expression to his ambitions for the group, and helped to focus attention, inside and outside ICI, on its transformation.

Quantifying a qualitative ambition - focusing on a real, large result - has the same concentrating effect on individual minds. But there is yet another solid reason for naming an objective in hard, financial terms. It provides a benchmark, a measure of progress, proof that you've done what you set out to do. When ICI made that billion it was a proof of its success and, for that matter, its chairman's. He had made things happen at ICI, as promised. Hence the title of his management book, Making It Happen, subtitled Reflections on Leadership.

That billion pounds result, of course, was the outcome of many decisions, starting with redefining ICI as 'a chemical service company' - taking it away from production, round which the group had always been centred, and towards the customer, from whom profits now had to be won. That clear and rational decision about what ICI's business truly was - where its true core lay - was the start of the chairman's drive to turn ICI's lumbering bureaucracies into faster-moving, more profit-conscious commercial organizations. The turnaround rested on an eight-point programme:

1. Leadership is the fulcrum: either that of a single leader (the most likely) or of a tightly knit group of like-minded people, or better still, both - which is what Harvey-Jones sought to achieve at ICI.

2. Nothing is sacred: crisis gives a Harvey-Jones the licence to kill any aspect of the organization that gets in the way of its restoration - that included closing down two businesses, bulk polyester and polythene, which ICI had actually pioneered.

3. Decisions are taken firmly when and where they must be made: at ICI, that started with the top management, which Harvey-Jones forced into a decisive, proactive mode.

4. Necessary action is taken equally decisively and fast: again, emergency acts as a forceful spur - and Harvey-Jones thus instituted sweeping changes at the top of ICI as soon as he gained power.

5. What is being done, why, and with what results, must be clearly communicated - inside and outside the organization: here the ICI chairman was aided by the natural gifts that made his TV appearances in The Troubleshooter and other programmes so effective.

6. Change must be facilitated and strongly symbolized by unmistakable actions: Harvey-Jones was frustrated in his symbolic wish to close down ICI's monumental HQ at Millbank, but he did use lesser, still powerful symbols - such as abandoning the old Imperial board room (and personally sporting loud ties and flowing locks).

7. The basics of the business (starting with the management of its cash) must be as efficient as human beings can make them: they always deteriorate over time unless somebody deliberately tightens them up - and ICI was no exception.

8. The future lies ahead. Management must look beyond present objectives (indispensable though they are) to future aims (like that billion-pound profit), no matter how hopeless the present abyss may seem. At the nadir of Britain's military history, ringed by defeat and despair, with nightly bombardment threatening collapse, Winston Churchill was already planning the post-war settlement to follow victory, which American entry (then not even secured) would, he knew, make inevitable.

Without the heroic element injected by a charismatic leader like Harvey-Jones, the eight-point programme may seem bloodless. But it is universally effective. Moreover, study it carefully, and a compelling truth emerges. This isn't just a programme for corporate renaissance or turnaround, it is the essence of creating and sustaining a company which never needs turning, whatever the starting point, whatever the core.

1. Leadership
2. Challenge
3. Decisiveness
4. Speed
5. Clarity
6. Change
7. Basics
8. Objectives

They describe a sequence. The new leadership takes charge, defines the challenge, moves decisively and fast to meet the challenge, communicates clearly what is happening, and institutes sweeping change in all operations - including the basics - as the organisation moves towards the new objectives. Within that overall results focus, the whole organisation is guided by the drive for measurable and measured outcomes.

What did drive ICI so rapidly and decisively from a quarterly loss to annual profits of over a billion pounds? Nobody could doubt, after meeting him, that much of the answer lay with the chairman himself - not least with a frank, warm, forceful personality. Bottle Harvey-Jones, and you could make a fortune from seekers wanting distilled management effectiveness. Hear Harvey-Jones the orator describe to a conference how he revitalized ICI, about the processes by which he cured ICI's version of the English disease, and the impact of this image-breaker on a habit-ridden corporate bureaucracy comes vividly alive.

In a long, late-starting career with the multinational giant, Harvey-Jones had made no secret of his inconoclasm, even as he followed the standard success pattern - progressively more important posts leading to the top of a major division, followed by elevation to the main board, and, in his late 50s, to the summit for the usual limited period. The uniqueness lies elsewhere: not only in the radical change that Harvey-Jones injected into ICI, but in his emergence as a charismatic communicator who, more than anyone before, could make industry and management come vividly alive.

Yet his autobiography, introspective in a most uncommon way, describes an apparently different ideal, one he sought to approach: a sort of Boy's Own Paper composite, the archetypal British gentleman - simultaneously strong and compassionate, stiff-lipped yet emotional, courageous both physically and morally, doing incessantly to others as you would be done by yourself. Leading ICI and helping to try to arrest Britain's industrial decline were crucial in this pilgrim's progress, but were not the ultimate results on which the pilgrim focused.

In fact, he found his 'years as chairman, despite their apparent success, and the excess of praise which I received, one of the hardest and least enjoyable periods of my life.' That's an odd contrast with his emergence as management superstar, a rare breed in any country - especially since Harvey-Jones's stardom wasn't thrust upon him: he deliberately used a high profile to further the sorely needed regeneration of ICI and its image. But while the heroic role suited his needs and talents, Harvey-Jones was uncomfortable wearing the purple: just like his Boy's Own Paper ideal, no doubt.

His autobiography continually refers to the Jekyll and Hyde tension between the outwardly bluff and successful leader and the cowering small boy who lurks within, painfully aware of his inadequacies and longing for the respect of his own father. This human sensitivity must have contributed powerfully to the first successes of Harvey-Jones as a professional naval officer at sea, as an operator in the secret world of naval intelligence, and as the welder of ICI's huge, incoherent Wilton site into a harmonious whole.

Yet for all the personal insecurity, for all the slightly tortured feeling that life (including an adored family) is more important than work. Harvey-Jones never refused a challenge, never took his foot off the ladder, and never, on his own account, hesitated to act vigorously, even when starting from positions of serious ignorance. A superbly self-taught manager, he was well prepared for the chair by his own critical observations. Many of his heresies were formed as a main board director, when he found himself underloaded for the first time in his career.

He titled that phase 'The Bored Years'. The board, by no means untypically, combined great theoretical power with strange weakness. How many other companies would allow divisional heads, led by Harvey-Jones, in his pre-board days to form their own committee - an act which some directors understandably thought 'subversive and even insubordinate'? The truth is that Harvey-Jones is subversive by nature and mind. The Boy's Own Paper ideal doesn't include the humorous, trouble-shooting iconoclasm that piloted its possessor throught the convoluted coils of ICI's workings to a position where he could and did straighten some of them out.

Harvey-Jones thus genuinely gave ICI, the largest manufacturer in Britain, the chance for greatness. His successors, unable to maintain the momentum, settled for another solution, partly under the pressure of a predatory share purchase by Lord Hanson's empire: they split ICI into two halves - the basic chemicals businesses, and the higher technology lines, led by pharmaceuticals. Probably, Harvey-Jones had been given too short a time (five years) in which to apply his rare quality of being the anti-bureaucrat in the bureaucracy, the individual grit in the collective oyster.

In normal circumstances the oyster spits out the grit well before the gritty executive reaches the top. The circumstances at ICI, however, were abnormal: as they were for most of its major contemporaries in British industry. The recession of 1979-80 had exposed horrible weaknesses, not only in ICI, but in great companies like Courtaulds, Vickers, and Thorn-EMI. The sufferers had sometimes been led towards their difficulties by managers who failed to build management structures or to develop business strategies that could cope with a quarter-century of rapid change.

Whether these leaders survived personally or left the scene, their companies needed to find new people, new ideas and a new professionalism - and it's now notorious that many didn't. Too many replacement managers - successors, but not successful - showed inability or disinclination to take their companies onwards and upwards. Bureaucratic 'success' for them personally was accompanied or followed by failure for their businesses at a time of acute challenge - not just from recession, but also from the accelerating threat of international competition.

At ICI, the mounting business difficulties, culminating in financial loss, led the board to turn to Harvey-Jones for rescue. He repaid the compliment by promptly halving the board's numbers, and dispensing with its two deputy chairmen. Whether he would have been elevated (doubtless, not) without the urgent stimulus of crisis isn't an academic question. Cometh the moment, cometh the man - or woman. Margaret Thatcher's genius for leadership would likewise have lain unused but for the failures (like losing the 1974 election) of her predecessor, Edward Heath.

Disgruntled Conservative MPs, intending to administer a mere rebuke, did so in such numbers that they accidentally brought Heath down. The matching of moment and man is always accidental. But only a Thatcher could have exploited that chance regicide so ruthlessly; just as, at ICI, only somebody able to match Harvey-Jones's powers - like ex-naval bluntness, a keen and far from naval business sense, and natural genius for public relations - could have turned the corporate supertanker so many degrees.

It proved less easy to turn the wardroom or boardroom. 'Very upset' by the news that Harvey-Jones was to write his memoirs, his former board colleagues insisted that they should not be mentioned by name, 'or in any way that any of them could be identified as individuals'. What made these men so afraid? Even five years, it appears, is not long enough to change a corporate culture at main board level. After his retirement, moreover, former colleagues were heard to disparage his contribution: but it can hardly be ignored.

He had successfully treated symptoms that were truly alarming: nobody was looking after the interests of the company as a whole; the cash was being controlled, but not managed; new business wasn't being generated fast enough; creeping centralization was following in the wake of bureaucratic swelling; and managers were simply not profit-conscious. But Harvey-Jones had made no secret of his iconoclastic remedies, and he took the unanimous vote that elected him chairman as a mandate for action on precisely those lines.

That in itself was a sweeping innovation, given ICI's previous strange shyness about having a single chief executive. As noted, many board members felt personally the immediate consequences of their vote. The remaining directors were taken away for a week to reconsider the entire basis of the company. From that strategy session (whose repetition became a regular event) flowed many critical decisions. Among them were removing all layers of management that were not making a unique contribution, treating the redefined 'chemical services' company in terms of individual businesses (and not as 'divisions'), and placing a tightly knit executive octet at the summit of 'a federation of free men coordinating themselves'.

The philosophy is difficult to separate from the personality of its architect. That ex-naval bluntness was brought to bear on the business as a deliberate hallmark of his style - 'blunt to the point of painfulness', he likes to say. The executive octet was to discuss everthing as a group, with no holds barred and nothing sacrosanct, including their own performance. The business heads received simple, one-sentence objectives - like stay in the colours business, improve your performance, make a specified contribution to the centre and live off your retained cash flow. More, they were expected to meet their objectives and, if they failed, to explain themselves in front of their peers.

It sounds like a breath of fresh air, and it blew through ICI as a hurricane of change. It also sounds like a textbook example of result-focused management. Interestingly, though, the ICI salvationist has no entries under 'management' in Making It Happen. Here, Harvey-Jones makes a curious bed-fellow with another iconoclast, H. Ross Perot, the computer services king who made life miserable for the General Motors directors after they purchased his company: and then badly bothered George Bush as a Presidential candidate. In a Fortune critique, Perot unrolled a hypothetical action programme for GM which included, 'Starting today, the word "management" will no longer be used...'. It was to be replaced by 'leadership'.

Yet Harvey-Jones surely doesn't mean to convey any disapproval of management science, technique and theory. On the contrary, he calls management 'an absorbing interest. Industrial management, perhaps above all, has depths of fascination which few other callings can enjoy.' He stresses, however, that there is no real management without action, without 'making things happen', without focusing on results. Action, of course, must be preceded by careful thinking that establishes the focus:

'Before the ICI main board goes away for one of its regular strategy discussions "off campus", an enormous amount of time is spent working out the balance of the meeting, and how it should be carried out. It is essential that the time is used to best effect, and this means structuring the meetings so that there is an adequate input of fact.'

But it's equally important to understand that 'small actions have a tremendous catalytic and change effect'. That's why the day that Harvey-Jones assumed responsibility as chairman, instead of meeting, 'as we always had done, in the ICI boardroom, an imposing but somewhat impractical room, we met in what had been my office'; there he could better organize 'free and uninhibited' discussion. What worked for ICI from that day on will work for any company, great or small - as the Troubleshooter TV series demonstrated.

It's fashionable to argue that Harvey-Jones got most of the Troubleshooter cases wrong. In fact, his diagnoses and prognoses were largely correct - because, unlike his subjects, the troubleshooter sought to focus the businesses on results and to put in place solutions that would achieve those outcomes. The assorted and troubled British companies which he held up to the light, though, neither focused on results, nor (unsurprisingly) achieved good ones. The end doesn't justify the means: but without having an end in view, preferably a highly ambitious one, you won't even know what means to adopt.