ONE of Scotland’s most successful entrepreneurs has warned too many large companies are run by “control freaks” whose outlook affected long-term business growth.
Sir Brian Souter, who co-founded the Stagecoach bus firm, dubbed these company leaders "emperors." He added these people would lead to poor long-term growth as they were averse to risk and trying new ideas.
In a speech to chartered accountants in Glasgow yesterday, the tycoon suggested it was a shame there were not more entrepreneurs at the head of big firms.
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He said: “Entrepreneurs have ideas bursting out of their heads, are creative and willing to take risks. Emperors are not interested in doing anything else.”
John Anderson, former chief executive of the Entrepreneurial Exchange and now a director at the Hunter Centre for Entrepreneurship at Strathclyde University, backed the assessment.
Mr Anderson said: “Having presided over the Exchange awards for a long time what I saw latterly were people like Bob Keiller and Colin Robertson who had come out of very large corporate but just had something in their make-up which made them really brilliant leaders and had a tolerance of risk.
“They were able to see big opportunities, go for them, build the team around them and be successful.
“Some people are terrified to do anything in case it affects their share price. I’ve seen that before when an entrepreneurial leader falls foul of opinion in the City.”
While Sir Brian, who co-founded Stagecoach with his sister Ann Gloag, was dismissive of the “emperors” he did admit the best leaders needed a mix of qualities.
But he went on to suggest the proliferation of emperors in senior roles will actually stunt the potential for faster economic growth.
He told the Chartered Accountants of Scotland annual conference at the Radisson Blu hotel in Glasgow: “The more emperors we have the more staid our growth will be for the longer term.”
Speaking more widely about the environment needed to foster more creative business people Sir Brian said “entrepreneurs need to be encouraged” and there needs to be a “fiscal system” to do that which is simpler than the one currently in place.
Sir Brian, who described himself to the audience as a serial entrepreneur, said changing social behaviour and the shift towards digital technology are among the biggest challenges facing the businesses he is involved in.
He cited the example of when he first started out in transport working as a bus conductor when most companies would not answer their phones to customers and nobody did any marketing.
Sir Brian said at the launch of Stagecoach he made sure phones were answered and they launched the Magic Bus brand in Glasgow with an employee in a rabbit costume.
He predicted that 20 years from now people looking back will find it hard to believe that any large corporates chose not to engage with their customers using social media channels.
He said: “You either work out how to be part of it or you are going to be left behind. I do not know what the solutions are going to be yet.”
From the perspective of Souter Investments, his private equity vehicle, Sir Brian said the prospects on digital were “how can we get a piece of this” and “what parts should we be investing in”.
Asked by the audience what he would do if he were to start again Sir Brian said: “If you have an interesting idea that you can take digital then that is where the smart money is.”
Questioned why he continues to be involved in business even though there is no financial need for him to be he said: “I just need to do this stuff and I still really get a kick out of it. I really like working with people.”
Earlier, Institute of Chartered Accountants Scotland (ICAS) chief executive Anton Colella called for business leaders to place ethical behaviour at the heart of what they do.
Mr Colella said individuals need to take more personal responsibility to rebuild customer trust in the wake of the wide range of corporate scandals seen in recent years.
He told delegates ICAS is launching a new initiative called The Power of One and is also proposing to add a moral courage principle to the body’s code of ethics.
He said: “Regulators, rules and codes of conduct can only achieve so much. For business to restore its reputation in the eyes of the public, we need leaders at every level, to stand up and be counted.
“That means taking personal responsibility and doing the right thing, especially when they encounter dubious or unethical behaviour.
“Corporate failure often begins with personal failure. Our aim is to place personal ethical behaviour as the number one priority for individuals.”
Asked about tough ethical dilemmas he had faced Sir Brian related one European franchise bid when the company was asked to give €1.4 million to a local transport commissioner and had to walk away as a result of being unwilling to do that.
He said you should “never compromise on honesty”.
Mr Colella added that he believes the 21,000 ICAS members around the world can act as a “force for good” by always following the highest ethical standards.
He added: “They can also influence those around them, and help shape the culture and values of their organisations."