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Harrison, 48, is part of a new breed of fortysomethings in charge at BZW a departure from the over-50s hierarchy that prevailed before. The new head of equities, Steve Harker, whose department employs 1,700 of BZW’s total headcount of 7,500, also fits this mould. “What you see is what you get with Harrison and [Barclays’ chief executive Martin] Taylor,” says Harker who doesn’t have any problems with that approach. Harrison is bold. His first few days in his new position were a blitzkrieg: he started on Tuesday, fired acting chief executive Donald Brydon on Wednesday, and restructured the management committee on Thursday. Not one to conform to convention, he “upsized” the latter to 10 people from eight and included, for the first time, the head of human resources. Only four existing members are left from the previous management committee. Energetic and bustling, Harrison’s management style, he says, is characterized by a player-coach approach. He supports the struggling English football club, Birmingham City. He is not a banker’s banker. He spent the early part of his career working in the no-nonsense oil industry, first for BNOC, then Tricentrol, finally joining j Henry Schroder Wagg in 1983. He then worked at Lehman Brothers for seven years rising to head of European investment banking, before becoming chief executive of investment banking at Robert Fleming in 1993. His style is described as mid-Atlantic. At Flemings, he encouraged the concept of cold-calling clients. According to former colleagues, he is more a deal-winner than an administrator. To alleviate this, he has promoted Patrick O’Sullivan to handle day-to-day administration as his chief operating officer. Perhaps the most visible example of the new style is the new-look morning coffee meeting which is held for senior managers at 9am each day at Ebbgate House. Under David Band, who had run BZW since 1988, these were a 10-minute formality. Nowadays the duration is less predictable. One senior executive missed an appointment because the morning coffee meeting lasted 55 minutes. But once Harrison has been in office for eight years like his predecessor maybe the meetings will have become a 10-minute formality again. Or maybe not. When did you first meet Martin Taylor? A while ago. I got approached for this job back in February. How was the approach made? Directly. Was it over a lunch? No. A telephone call? Yes. He’s pretty direct isn’t he? Very direct, yes. But I’d say thoughtful, and direct. A lot of thought went into the process of deciding what would be the next phase of BZW’s life, involving Andrew Buxton [Barclays chairman], Martin, Sir Peter Middleton [BZW chairman] and David Band [late BZW chief executive]. You share an industry background with Taylor. I was in the oil industry. I found that experience extremely helpful. Do you get on better because neither of you are out-and-out bankers? I wouldn’t read too much into it. But Martin is the sort of guy who takes these things into consideration. But I also think I’ve talked to him about it that Martin has a healthy respect for senior bankers. I’m a big believer in having industry knowledge within the firm. It helps us to come up with good ideas for companies, to develop strategies and add value. How often will you see Taylor? Oh, a lot. But it won’t be a forced thing. There are weekly group executive meetings. I’m on the board of the bank and there are a lot of meetings associated with that. And our paths will cross, with clients, for example. From my side that’s something I welcome, and I think he does as well. So it won’t be ad hoc? Much of it will be ad hoc. We will use the telephone and, though I won’t push it, I’ll take my chances getting in to see him [laughs]. I like to try to deal with issues there and then, through personal contact. That’s my style. Isn’t BZW just a second-tier firm? No, I don’t think we are. Our equities business is a major one, as is our structured finance business. And we are working to build our business in the markets area. We’ve been able to attract some good people to the firm in corporate finance. We’re moving up the league tables fast. I won’t use the hackneyed phrase “global” but we certainly do have a very significant international operation. When Taylor approached you, what gave you the impression he was really behind making this an important investment bank? We’ve seen a pretty good manifestation of that already. One of the driving issues was that we needed to be firing on a number of cylinders. I said I thought the markets/fixed-income business was very important. Of course, since then we’ve put words into practice and we’ve seen its practical manifestation in terms of bringing Bob [Diamond] in and giving him an opportuntity to build a team. That’s probably the best practical answer I can give. I firmly believe we are doing the right things, and that this is a very important part of the [Barclays] group and I hope to improve that position still further. Is there a line in the sand where he’s said, “Look, you’ve got three years and you can spend this much money”? No. There isn’t a line in the sand. It’s quite difficult for anyone to do that, and I don’t think he needs to. If this relationship works, as I believe it will, we can develop a sensible strategy for BZW without false time-frames. This is an unpredictable business. The best-laid plans can be blown out of the water by market events. We need to have a strategy which is workable, where you’ve got the people in place to make it work, and where you can create a culture where people can work together. I know integration has become an overused phrase, but I do believe that businesses feed off other businesses. Obviously I want it to happen quickly. But I think it’s quite dangerous to do it by formula. You’re hiring people such as Diamond and Tom Kalaris [new president of BZW Securities]. They cost money. I don’t want it to be thought I’m not systematic. I am a believer in budgets and business plans, and factoring in the costs of businesses. I don’t mean to give the impression that I’m going to turn up one morning, and say, “By the way, I’m going to sign up Alan Shearer” [an English footballer recently signed for the record sum of £15 million]. It’s not like that. We have a clear view of what we want to achieve, which businesses we want to be in, where we want to be in them, and whether we have the resources or whether we need to upgrade. Please don’t think it depends which side of bed we get out of. We are building a business here. I hope for the long term. And I want to be profitable. I don’t need Andrew [Buxton] or Martin to tell me this. Is the high-profile hiring you did over the summer unusual, or will you continue hiring in this way for the next few months? The important thing is to put in the components of leadership. The next phase is to develop the businesses. We’re not going to go on an all-out hiring binge. We have some very good people internally. Hopefully we’ll be able to hire people of the quality we’ve already brought into other parts of the business and bring on internal talent. This will be a catalyst for the rest of our staff. My job is to discover where we have a leadership issue, or a quality issue. I’m very encouraged by what I see. Was Diamond a Martin Taylor hire? Diamond was a Harrison-Taylor hire. It was our joint view that we needed to strengthen that side of our business, and we were fortunate that Bob’s circumstances were such that we were able to have an amicable conversation with him at the time. What made you think he would be good for BZW? He’s a good all-rounder, and it’s helpful that he’s worked in London for a significant part of his career, and very helpful he also knows the emerging markets business. He’s good with people and he’s hard working and he’ll work well with other businesses. He’ll form a good partnership with Steve Harker [head of equities]. Have you heard the analogy that he’s the Edson Mitchell and you’re the Michael Dobson? I don’t like those analogies. I’m not Mike Dobson. I don’t think Bob is Edson Mitchell, though I can’t speak for Bob [laughs]. People ask me, “who do you want to be like?” I want to be BZW. We’re not Goldman Sachs. We’re not Citibank. We are who we are. But there are similarities. You and Dobson are both English and investment bankers, Diamond and Mitchell are both Americans and from markets. Yes, but it doesn’t change my view. I think it detracts from what the strategies of individual firms are. Both Deutsche Morgan Grenfell and BZW have commercial bank parents. But they’re very different. I wouldn’t pretend to try to articulate the Deutsche Bank strategy. This is an industry going through significant change. What makes you think BZW will get into the global club? We have the resources, the geographical presence, and the products to give us a very good opportunity. That allows us to have that sort of aspiration. Quite frankly there’s another factor in all this called profitability. It’s not just a case of getting to the big boys’ table. I’m interested in profitability and return on capital. I believe we have the credentials and the raw materials to do all of those things. Is the US investment banking style the way forward? I don’t think of it that way. If you look at the corporate finance business, which is very much cross-border, a lot of capable people come out of essentially the UK market. It’s not a question of being American or British or whatever. It’s more a question of how you position yourself to do the business rather than a particular style. I am completely unselfconscious. But I do my best, I work hard. I have a background that happens to have taken me into UK merchant banks, industry, and bulge bracket American investment banking. I’ve tried to be the best I can be in a job and to take with me all of the good habits. You should not take your eye off one key ball, the client. You can appreciate client-focus as much with a UK merchant banking background, as from an American investment bank. How do you see your role as chief executive? An important component for me is to make sure we all work together as a firm, and that we develop a team approach. I hope I can make a contribution to the morale and motivation of our people, and I believe in being quite hands-on in that respect. It’s important to lead from the front. I believe that part of my job is to face the outside world and to provide my full commitment to the firm in situations we are very interested in winning. So it’s really a broad mixture of strategy, motivation, implementation of a team approach, and to interface the bank. Martin Taylor said when he hired you that the one area you’ve missed out on is markets. I’m not sure what he actually said. We had a pretty big fixed-income business at Lehman Brothers, and I ran the European investment banking business. No doubt about it, in terms of actual practice I’ve done more M&A deals. But I’m not uncomfortable with this. I think I have a background which covers quite a lot of our businesses one way or another. How important is the management committee in the way you manage? It’s going to be very important. We’ve got a good set of people on the committee. We’ve created a collegiate group. This is critical because I want to develop our businesses in a way in which we they feed off each other. That’s the bottom line. It will meet every week? Yes. Will you appear on the trading floor? Yes, I’ll wander around there. Are you the sort of person who likes to get on first-name terms with people? Yes. But not “Hail fellow, well met” just for the sake of it. I won’t force it. After the Bank of England deal [a $2 billion floating-rate note] I got a real buzz out of being down on the trading floor. We had the first meeting at 5.45am, when the sales team was briefed. Great. But I’m just as happy walking on the corporate finance floor at nine at night, where there are often people sitting around, banging out spreadsheets, presentations and the like. I intend to see as many of the offices overseas as I can. With Flemings, I used to go to Asia a lot. But I won’t be visible just for the sake of being visible. When the restructuring was announced you said the new management was going to take the firm onto the next level. What is the next level? I mean the next stage of our growth. Let’s not take anything away from the fact that we’ve had a really exciting 10 years. But we must steepen the gradient of our client service and our overrall performance. We need to encourage the next generation of management and, in the case of markets, to develop a business where perhaps we were not firing on all four cylinders. So it’s a combination of being very keen on profitability and to fulfil our potential. I think with our product base we have a marvellous opportunity. I don’t have a crystal ball, but I’m quite optimistic about what we can do. When you arrived, you didn’t mess around. Donald Brydon went very quickly, for example. Is that your philosophy? Get things done fast? I had a real opportunity to think this through. Quite carefully. Having thought it through and having tested my views on colleagues, I believed that I needed to move on those views. There’s never a perfect time, but I think its fairer and easier in many ways to implement it quickly. But a tremendous amount of thought went into that process. A lot of the time it’s easier to leave things as they are. It is. Is this a signal that for bold decisions there’ll be no more dithering at BZW? Let’s be careful what we mean by bold decisions. It’s important to be clear about what you’re trying to achieve and how you get there, and therefore be decisive. But thoughtfully decisive. That’s how I put it. All these things are important and require a lot of thought about their implications. I just think that’s the right way to go. If you call it bold, maybe it’s bold. I just try to be clear and decisive. Are you a new broom with a new culture? It’s not new broom for the sake of a new broom. There’s a real purpose to it. I think a culture comes out of common purpose and teamwork. Actually there’s more of an underlying culture here than sometimes seems apparent outside the firm. My job is to make this an effective cohesive firm. Being clear helps to create that, because it gives people a clearer sense of direction. We’ve just appointed our graduate intake. We had 95 graduates in here. I saw as many of them as I could. They’re very bright. And that’s the next part of building the culture. The clarity of thought and management these guys see is going to be very important. That’s a lot of trainees. It’s not really, and our plan is for that to increase slightly going forward. Were they not intimidated when they met you? No, not these guys today. They read the news, they ask you questions: “By the way, what’s your view of that bank, or so and so? I read this story about them the other day.” These guys are pretty sharp. They’re on the ball. Martin Taylor is consistently talking about shareholder value. But investment banking has traditionally been a business which is better for employees than shareholders. That must put a lot of pressure on you. I think Martin’s dead right to put an emphasis on shareholder value. I’ve not got any argument with that. There are inevitable choices to be made in businesses like this about resources: how much you commit to individual parts, to research and development, for example. You’ve got to get the balance right. At the end of the day, there is pressure to perform, and meet shareholder value criteria. British industry has always been very short-term in its investment. You have the chance to reach the big league. But investment is required. Will Martin Taylor invest or will he decide the returns are not good enough? What you’ve seen in the recent past is sensible investment. I am all for that. What we’re paid to do is to use our capital in the right businesses in as effective a way as possible. I believe Martin is behind a sensible strategy for this firm. We’ve got to use capital sensibly, and profitably and balance the short term with the long term. If I had an open cheque I would probably find it more difficult…. I’m not saying I want to climb Mount Everest without ropes, however. But I certainly feel that prudent investment is the right way to go. I don’t have any trouble with that. Do you think league tables are important? Yes, they are. Companies read them. Being credible whether by league tables or some other qualitative measure is important. But it’s no good being top of the league tables and being unprofitable. That combination doesn’t work. Do you have to be top five? No. But I accept that the need to be there or thereabouts is important. |
