Friday is dress-down day in our purchasing office at King's Cross so I'm in cords, a casual shirt and an old blazer. I guess I'm not the leading fashion statement in our office most Fridays. I don't really like dress down anyway as it means making a conscious decision at 6 a.m. in the morning. Suit and tie is much more straightforward.
I'm in the office at eight, as usual, but most unusually I get a call at 8.15 from a flustered-sounding Pat, Richard Delbridge’s PA. She's about to send me a fax, can I stand by the machine because it is confidential. "What's up?" I can tell something's happened. "Derek's gone!"
The fax is a letter from the Chairman confirming that Derek Wanless has agreed to fall on his sword, and that Sir David will immediately become Chairman and Chief Executive, with a new man, Ron Sandler, coming in as Chief Operating Officer. Derek going is not a total surprise, but the timing is unexpected, and I am most impressed that Richard was so discreet last night. He gave no hint that this was happening.
There's a new organisation chart attached to the letter. Among the other changes, Paul Myners appears to be back running Gartmore, Coutts etc. He was going, but I guess if the L&G bid is definitely dead there's still a role for him.
I am invited to a meeting over in the Lothbury boardroom at 9.30. Unfortunately, it is not a dress down day in Head Office. More fortunately, I have a spare tie in the office, so as long as I keep my legs under the table I might not look too conspicuous! When I get to Lothbury, a defence team IT meeting chaired by Mark Fisher is just finishing. As he comes out of the Boardroom, he sees Mike Newens (Director of Group Property) and I waiting to go in. Mark looks at us suspiciously.
"What are you doing here? It's the Chairman's meeting in here now!"
We explain that as functional heads, we are actually invited to the meeting, and Mark graciously allows us to enter the holy place. On the dot of 9.30, and as I sit at the back desperately try to conceal the cords and casual shirt, the Chairman enters with a dark, bespectacled man we assume is Sandler. Sir David Rowland speaks - precisely and fluently as usual despite the lack of any notes. He thanks us for coming.
Unfortunately, he says, the antagonism to Derek among investors was just far greater than he had realised. L&G in retrospect was clearly a mistake and he shares responsibility for that. He thinks that deal might just have gone through if there had been no intervention, but with the share price falling our board had become worried about a bid. However, they had not expected it to be Bank of Scotland.
After the Board meeting on Thursday, the non-executive directors had got together, and decided that for the good of the company, Derek had to go. There was no other way for the stand-alone strategy to have credibility with the press, investors and analysts. Then he delivers Derek's eulogy- but while it would be easy to be cynical, he does it with such sincerity I think we all believe every word. Derek is brighter than any one of us, he says. Sir David was looking forward to working with him; despite Derek's brainpower, David felt he could have helped him, as their skills were complementary. Derek was perhaps almost too clever; he sometimes saw too many options for a decision and indecisiveness could be the result. (That is clearly not one of David's faults!)
Ron is an old colleague of David's from the Lloyds of London days. Prior to that, he has worked in senior consultancy roles with Booz Allen and Boston Consulting Group, and was CEO of Exco. David hadn't wanted to bring him in- you should never go back and try to recreate past times. But when the bid came in, he decided he needed Ron to work alongside Derek. Derek had been totally on board with that plan.
Now, of course, that plan was somewhat different. Ron had been outstanding at Lloyds; they were friends, played golf badly together, and generally had a laugh, although it has to be said that, at first sight, Ron does not exactly look like a man for jolly japes. Ron is joining as Chief Operating Officer, while David will become Chairman and Chief Executive. (I think we are wondering why Ron isn't Chief Executive, but there is no real explanation.)
"I will not be beaten! "says David, and while this could come over as cliched, you believe him- he is extraordinarily impressive and persuasive in some indefinable way. He doesn't have physical charisma, but some underlying strength seems to shine through. The BoS bid seriously undervalues NW, he continues. We have a great future - it may be with someone else if it makes sense, and he acknowledges that may ultimately be the result. But it should not and will not be this bid.
Then Ron Sandler* speaks. He is low key, with bushy Denis Healey eyebrows, and a distinctive trace of a Southern African accent. He is somewhat stunned by what has happened - he had expected to be working with Derek. Some difficult decisions will have to be made but he very much hopes to get to meet us before then. (Good to know we get to have tea with our executioner before the noose tightens?) He strikes me as a “speak softly but don't mess me around” sort of a guy. He finishes and asks for questions. There is silence. Surely the cream of NatWest's management talent can think of something to say?
I finally give up waiting and decide to risk drawing attention to my trousers.
"What about reporting lines?" I ask.
Nothing has been decided, they are still looking into it, but there should be clarity soon. Bill Martin asks about the defence timetable, and then Tim Jones speaks.
"I'd just like to welcome Ron to this great company, with its great customers and great staff. I'm really looking forward to working with you and I'm delighted you've joined us."
This effusiveness is a little unexpected from a man who is supposedly very close to Derek and has long been tipped as "the next Group CEO." The odds of Tim achieving those heights seem to have lengthened significantly over the last 24 hours, but in business life a bit of "interpersonal sensitivity" to a new boss rarely in my experience does much harm. And I have to say, I think all of us feel we have just seen a masterly demonstration of those skills.
I meet Bernard at the lift on the way out. "Good question," he says. He must be unsure of his future- his title is Executive Director, Group Operations, which seems perilously close to Ron's Chief Operating Officer designation. We will see.
Back at my office I'm still struggling with the eProcurement project and the potential savings- are we now just interested in 2000 savings, or still the longer-term vision? I hold a team meeting to pass on this morning's information. The team are a bit dazed at recent events; Derek was generally popular with staff and was seen as a good guy, although there were differing views as his effectiveness. I'm presenting a positive picture- whatever happens, purchasing will be needed. Whether it is NatWest or a new merged company, cost savings are bound to be a key element of the future strategy - and that is where we can contribute.
We finally decide today that we have a very strong business case to close down our warehouse at Cheadle, near Manchester. We bring in stationery and printed items from suppliers, store it there and send it out to branches and offices. We operate it like a business, with a small call centre to handle orders, and a computer system that is the bane of my life.
We also, unbelievably, still make our own envelopes, as well as using the surplus space there for archive storage. The future of the SDC (Stationery Distribution Centre) has been under review for about a year, since it became my responsibility, so it is not a total surprise, but that doesn't make it much easier when we are talking about 80-odd redundancies. Many of the staff are approaching retirement and may feel quite happy about a decent pay-off, but I've never been a very convincing "macho manager". Anyone who likes giving people bad news is a bit sick in my book.
It has been quite a day (that's my excuse) so I go for a quick pint with M, my Head of Projects and his team at The Craic, an Irish bar around the corner from our office. It is beautifully situated, just opposite the gay porno shop (which is so discreet I thought it was an accountant’s or lawyer’s office), next to the sauna, massage and shower parlour. I could just about imagine going in to one of these places and asking for a massage, but asking for a shower seems to be abdicating any pretence at normality. What do you say? I feel a bit sweaty after a hard day in the office, thought I'd have a quick shower before I go home? Gosh, I didn’t expect that naked girl to get into the shower with me ...
M’s projects team work on a variety of mainly IT related purchasing activities for the various businesses. He has developed an excellent and fun team of bright young things. M himself could have made a good living as a stand-up comic, a folk singer, or an Irish priest- he's an Ulster Catholic and one of those ubiquitous and wonderful people who will drink you under the table then spend all weekend painting the Church Hall. His staff love him, and not just because there tend to be quite a few after work team meetings in various hostelries. We speculate as to whether Derek Wanless is having a few pints tonight. Not in an Irish bar in Kings Cross, I guess.
The Evening Standard reports the changes; Sir David calls Ron "very brave" for agreeing to join, and there is some speculation as to how much compensation Derek will get. Anthony Hilton writes a good piece; he believes Derek was underestimated and suffered because he didn't have the "mad axeman" image the analysts seem to like. Perhaps he was too nice. But to retain independence, investors have to regain confidence in the top team, so Derek probably had to go. Hilton also reckons that Rowland and Sandler did the impossible once at Lloyds; and just maybe they can do it again for NatWest.
2019 notes; Sir David Rowland died in February 2019, aged 85. The obituaries suggested an interesting , impressive and good man. Ron Sandler has continued to have a fascinating career - he ran Northern Rock on behalf of the government after it collapsed, and has chaired a whole range of firms. I didn't know he was a Queens' College Cambridge alumni either - I signally failed to use any "Cambridge old boys" connection to get close to him during the takeover period anyway!
