This document discusses leadership challenges in a time of rapid global change. It profiles Gary Hamel, who argues that leaders must rethink assumptions about business structure and capitalism. It also profiles two London Business School alumni - David Pyott of Allergan and Tim Breedon of Barclays Bank - who have led companies through significant change and turbulence. Both emphasize the importance of listening skills, emotional intelligence, and creating resilient leadership teams to navigate disruptive times.

1. In a changing world, it’s time to adapt

2. The pace of change in global business has never been more relentless and successful
managers and leaders are the ones who innovate their style and processes. GARY HAMEL
sets the agenda in his new book “What Matters Now” and HELEN POWER speaks to two
London Business School alumni who occupy positions at the highest level about how they
have mastered upheaval.
With the global economy in a state of flux
and trust in financial institutions at an all-time
low, GARY HAMEL, London Business
School’s Visiting Professor of Strategy
and Entrepreneurship, believes good
leadership has never been more vital, or –
perversely – harder to deliver.
“In today’s creative
economy, audacity,
imagination and zeal are
the ultimate wellsprings of
competitive
differentiation...
Individuals choose each
day whether or not to
bring these gifts to work,
and as we’ve seen from
the data, they mostly
choose not to.”
PROFESSOR GARY HAMEL
IN WHAT MATTERS NOW
In his latest book, What Matters Now: How
to Win in a World of Relentless Change,
Ferocious Competition, and Unstoppable
Innovation, Professor Hamel, one of the
world’s most influential business thinkers
since the 1980s, calls on business leaders to
rethink fundamental assumptions about the
structure of their organisations and indeed
capitalism itself.
Professor Hamel, who has worked for
organisations as diverse as General Electric,
Time Warner, Microsoft and Nestlé, argues
that leaders are facing an unprecedented
period of change with once-innovative
companies close to extinction and 100year-old business models rendered obsolete
overnight thanks to the development of
the internet and social media.
The author also points to a change in attitude
of institutional investors, who are increasingly
willing to confront highly paid executives, and
amongst graduates, who are voting with their
feet when choosing employment, preferring
the culture of small start-ups to blue-chip
corporations. For Professor Hamel, the
answer is to throw out the old rulebook, foster
innovation and battle bureaucracy to outrun
change and reverse the global tide of
commoditisation.
Two School alumni – DAVID PYOTT,
MSc13(1980), Chairman and Chief Executive
of Allergan Inc., and TIM BREEDON,
MBA23(1987), Independent Director of
Barclays Bank and former Group Chief
Executive of Legal & General – have made
their own substantial marks on corporate
leadership in the last 20 years. Although
operating in two very different sectors – David
in healthcare and Tim in financial services –
the two men have presided over periods of
dramatic change at the companies they have
worked for.

3. David joined Allergan in 1998 and has
transformed the company from a small eye
care business into a global speciality
pharmaceutical and medical devices giant.
Allergan’s expansion was born in part out of
the Botox revolution, which saw the
cosmetic surgery procedure once only used
by Hollywood film stars become a globally
available must-have beauty treatment.
“Botox was an orphan drug for a rare eye
disease and we converted that into a
worldwide market where putting botulinum
toxin into your face has become a normal
practice,” says David. “And, by the way,
customers do it every four months.”
The California-based Allergan boss, who
was made a Commander of the British
Empire in 2006, has come a long way from
his native Scotland. But in fact his business
beginnings were much closer to Tim’s than
Botox is to insurance.
“I put a premium
on maintaining
an ability to listen.
People have their
patter but they also
have sensitive
issues they don’t
want to bring up.”
DAVID PYOTT
MSc13(1980)
Chairman and CEO of Allergan Inc.
“Way back then, I was actually a banker,”
says David. “And I like to say now that I’m a
recovering banker and management
consultant.”
Despite the sector shift, David believes the
analytical skills he gleaned in professional
services stood him in good stead, helping
him to deal with multiple stakeholders and
different constituencies within his business.
But he argues it is emotional intelligence
that is the key to being a leader. “For most
people being a leader requires a fairly broad
set of skills.
Some people are outstanding in one area,
but have a real blind spot,” he says. “That
can be a real problem, because you need a
good combination of IQ and emotional
intelligence.
“I put a premium on maintaining an ability
to listen. People have their patter but they
also have sensitive issues they don’t want to
bring up, especially when they feel this
could be interpreted as criticising somebody
else in the group. You need to be able to
find a different venue where you can bring
those things up.”
While some leadership qualities are
common to every walk of life – from politics
to the army to business – David argues
some essential skills are peculiar to the
corporate world.
“Political leaders have to invest a lot more
time and have the skills for coalition
building. If you have been elected as Prime
Minister, President or Party Leader, you
won’t have made it unless you have the
skills to work across various factions in your
own party, let alone across aisles,” he says.
“In the business world it’s better if you have
the fortitude to make tough decisions on
your own. That said, decisions need to be
sufficiently grounded so staff and
stakeholders can say, ‘It’s tough, but
intellectually, I can sign on.’ If the leader
does something that’s not aligned with the
organisation’s values, they will lose support
pretty quickly.”

4. “Most organisations are
set up for manageable
amounts of change but
find it difficult to cope
when the extent and
pace of change become
potentially overwhelming.”
TIM BREEDON
MBA23(1987)
Independent Director of Barclays Bank
For Tim and his new colleagues at
Barclays Bank, this skill will be particularly
important. Censured by regulators for its
role in the Libor-rigging scandal, shorn of
its Chairman and Chief Executive last
year and – like most big banks – generally
reviled by the public, Barclays as an
institution still has a lot of apologising to
do.
“The banks have an enormous challenge.
It is a sign of the commitment of Barclays’
new Chairman and Chief Executive to
repairing its reputation that they asked me
to join the Board. They knew that creating
a purpose-led organisation, with strong
values and principles, was at the core of
the culture-change programme I had
initiated at Legal & General five years ago
and probably felt that Barclays needed to
embark on a similar journey.”
Tim served 25 years at L&G, six-and-a-half of
them as Group Chief Executive before retiring
last year. In that time, the insurance industry
was at risk of being engulfed in the credit crisis
of 2008 and the subsequent banking collapse.
The L&G boss also became Chairman of the
Association of British Insurers (ABI), helping to
push the agenda of the insurance industry as a
whole at this critical time, including persuading
nervous regulators that the sector was not
exposed to the same risks as banks and was
therefore not short of capital.

5. He expects both these experiences to be
helpful at Barclays. “Most organisations
are set up for manageable amounts of
change, but find it difficult to cope when
the extent and pace of change become
extreme and potentially overwhelming.
Strong leadership really matters at these
times, as the choices made can have a
profound impact on a company’s direction
and future success,” he says. “If I look at
when I took over as CEO of L&G there
were a lot of drivers of change evident in
the financial services industry. It is clear
that those who positioned their companies
well, and navigated their way successfully
through a period of upheaval, have since
pulled away from their competitors.”
“It is very tempting, isn’t it, for leaders to
attribute failure to fundamental changes in
the market. But leaders are not only
responsible for anticipating change and
reacting to change, but also for shaping
the business landscape in which they
operate, taking into account wider social
and economic considerations. It is wrong
to say that the ‘rules of the game’ are set
by the market or by third parties and that
we therefore have no responsibility for
them. This is a key lesson of the banking
crisis, and an area in which insurance
companies did a far better job than the
banks.”
David, who is also the Lead Independent
Director at Avery Dennison, a
manufacturing giant founded in 1935,
believes the leaders of fast-growing
and mature companies need to utilise
slightly different skills. “I think I can add
value as a director of Avery Dennison, but
the compare and contrast makes me
remember how good it is at Allergan,” he
says. The only way Avery Dennison can
please Wall Street is to get cost
reductions and productivity improvements,
but I think I have a strong bent for that. I’m
a gene-modified Scotsman who was
trained by the Swiss [at Novartis].”
The two men agree that education is
crucial to leadership and that this is where
academic institutions such as the School
can contribute. “Here’s an observation,”
says Tim. “It seems to me that for many
years there was too much focus on the
science of management rather than
equipping managers to lead. This
changed in the 1990s, but then there was
an over-focus on the personality of the
Chief Executive. Leadership doesn’t just
happen at the Chief Executive level.
“Leaders should always be trying to
reduce the dependency of the company
on individuals, including themselves.
Creating an effective leadership team
through careful selection, training,
mentoring and effective delegation is
rightly seen as one of the most important
duties of a Chief Executive.
Done well, it increases organisational
capability and resilience by fostering a
culture of leadership, and creates
bandwidth to deal with the unexpected.”
For David, his academic studies taught
him valuable lessons about how to avoid
mistakes throughout his successful
career. “Good analysis and good work in
the academic community are really
important,” he says. “I think there are
always great case studies that you can
look at to emulate other peoples’
successes and hopefully to avoid the
banana skins. I don’t spend that much
time reading books on management – I’m
too busy reading reports on Allergan and
our competitors. I’ve only had a week of
formal education since my MBA at the
School, but I rely on what I learned in the
past and then go back to the listening
thing.”
This was first published in
AlumniNews, Issue 130, July 2013.
Find out more about our alumni
community at: www.london.edu/alumni