Leadership is a subject that has been frequently on my mind in recent months. Looking at the political and economic landscape of the UK and the rest of the world, it’s apparent there are many forms of leadership that exert a huge influence on people’s lives here and abroad.
Politically, we have seen the example of Theresa May clinging to the leadership of the UK Government. Economically, there have been some interesting variations when you look at the retail sector and the Bank of England.
Finally, we have seen a different and very interesting type of leadership displayed by some unlikely sources in different socio-political contexts.
It’s tough at the top
Like her or not, Theresa May is still in power. The Tory party backed away from a change in its rules that would have enabled it to oust her. She has refused to call a General Election. She even had the strength to sack her Defence Secretary, Gavin Williamson.
Whatever else you say about her, you have to give her credit for the resilience she has shown in digging her heels in, despite fierce criticism and opposition.
On Brexit, we are no further forward than we were three months ago. It went quiet over Easter and it felt good that we all had a slight break from the ‘B’ word. Hopefully that enabled a few secret-squirrel chats between 10 Downing Street and the EU so that, between now and summer, something can be done.
I think it’s fair to say that, regardless of whether you are a Remainer or a Brexiteer, most people want a resolution sooner rather than later.
And yet, despite all this uncertainty, after the first full quarter of 2019 we can be fairly relieved and pleased at the state of the British economy.
Employment is incredibly high, with 76.1% of over-16s believed to be in work, the joint highest percentage on record. At the same time, unemployment is incredibly low, down to just 3.9% of the workforce in the three months up to February. That’s the lowest ratio since the start of 1975*.
A leader you can Bank on
Meanwhile, the Bank of England has upgraded its 2019 growth forecast, from 1.2% to 1.5%**. This may not sound like much, but the fact it has gone up at all has to be a good thing.
If you had told economists a couple of years ago that by mid-2019 there would be continuing uncertainty over Brexit, they would surely have predicted the economy would have stalled or even gone into recession.
Once Brexit is resolved, the Bank feels interest rates could rise – but for now they are staying put. House prices are falling at the moment and, to put a positive spin on things, if you are a young first-time buyer the combination of low rates and dropping prices means there’s an opportunity to get on the housing ladder.
The Bank has started the process of recruiting a successor to Mark Carney, who has been a well-respected Governor. We could see the first woman to take the position and the Bank may look overseas again for the person to follow Mr Carney, a Canadian, in this important role which demands steady, firm leadership.
The retail sector continues to face major challenges. We recently saw the merger of Sainsbury’s and Asda blocked, and on balance I think that’s a good thing. It has to be good for the consumer when there’s genuine competitions.
I see parallels here with the position of the Big Four accountancy firms – Deloitte, EY, KPMG and PwC – who dominate their sector, but have come in for stern criticism in recent times. One parliamentary select committee even suggested they should be broken up***.
This may sound drastic, but then you look at big firms like BHS and Carillion, who have been given a clean bill of health by one of the leading firms and then fallen over. If a doctor gives you the all-clear the day before you keel over, it’s clear something is going a bit wrong.
Elsewhere in retail, Next posted surprisingly good figures. Lord Wolfson, who runs the company, is well respected by the City and his example shows that with strong leadership you can come through difficult times. Debenhams, meanwhile, identified 22 of the 50 stores it’s going to close.
When you look at certain business figures, they demonstrate that you can on the face of things be successful but, if you don’t treat people well, you lose the moral argument.
Financial success isn’t enough. Long-term, sustainable growth comes from acting honourably. Otherwise, after a while disgruntled employees will break their NDAs and speak out.
Greta captures the imagination
That leads me on to a sector where people are getting very excited, which is clean energy. I’ve had meetings with clients who clearly think this could take off in a big way very suddenly.
Governments could crack down quite quickly and heavily on providers of traditional, dirty energy rather than it being a gradual process.
It was interesting to see, in the eco-friendly context, that shares in a vegan burger maker went up 163% on their first day of trading in Wall Street****.
You would think that the person to lead a successful campaign on climate change might be someone in their forties in a position of political power, not a teenager.
But Greta Thunberg has caught the imagination. The 16-year-old from Sweden who started the “school strike for climate” movement now has international recognition and it will be very interesting to see how the agenda moves forward from here.
Leadership doesn’t always come from elected representatives. With their standing across the globe at an all-time low, there are people in different parts of the world coming through who are potentially filling the vacuum.
History is full of charismatic, inspirational figures who exerted great influence and change and Greta has the same quality.
Another example of great leadership is Jurgen Klopp, the manager who guided Liverpool to one of the most extraordinary comebacks in the history of football this month when his side overturned a three-goal deficit against Barcelona to reach the Champions League Final.
I’ve seen a wider world view in the context of Eton Bridge Partners too. I recently spoke to a client, from a fintech business, who said: “I’m always keen to see the candidates other companies overlook.”
Sometimes, the whole story isn’t told in a CV and it can be rewarding to think outside the box and dig a little deeper for the right qualities.
Leading the way in Q1
I’d like to sign off with the extremely pleasing news that Q1 was a record quarter for Eton Bridge Partners. This was a team effort; all parts of the business contributed to this success.
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