SUNDAY 26TH SEPTEMBER 1999: Are We Doomed? And Lord Blackwell Inspires Us ...
On my way from Bank station to Lothbury on Sunday morning I run into Norman Blackwell, who joined NatWest a couple of years ago as Group Strategy Director. He is actually Lord Blackwell, courtesy of John Major, for whom Norman worked as a policy guru or general right-hand man during his time in Downing Street. Norman is a very unassuming chap in looks and behaviour who does not appear to be a typical Lord (whatever a typical Lord looks like these days.) He's not the world's best communicator and must have made John Major look like Mr. Charisma in comparison. But he obviously has a brain the size of the planet, and I have always found him very straightforward and good to work with.
Did he expect a bid? He says he realised we were getting vulnerable when the share price dropped so far, but certainly didn't expect Bank of Scotland to be one of the likely aggressors. They weren’t even on our radar. We get together again in the Boardroom. There has been some attrition from yesterday, but a new bunch of eager, enthusiastic faces has replaced others who couldn't take any more excitement. Bernard welcomes and thanks us - he is always unfailingly polite with everybody in my experience - and then, Bernard asks Norman to say a few words. He does what I assume is an attempt at a motivational rallying cry. The press is coming around to our view; things are looking better for our defence and so on.
This might be effective if it were not for two things; firstly, it is palpably untrue, as all the Sunday papers are saying that NatWest is doomed. It may not be Bank of Scotland who eventually wins, but most of us have read something this morning that says there is no chance of independence. Secondly, Norman's idea of a motivational speech is to stare resolutely at the table, intersperse every few words with an Urn or an Ah, and generally sound about as convincing as the drunk assuring his wife he's only had the two, honeshht. Asking Norman to do the motivational speech is not exactly playing to his undoubted strengths. It is probably a good job for the Tories he was working behind the scenes rather than in front of the cameras. They could have been down to single figures.
Sunday is more of the same, but with various interesting moments. Mark Mayhew, a director of the Card Services business, turns up to find that under the wonderful new structure knocked together yesterday, his business doesn't exist- it's been broken up and put into several different places. Mark restrains himself very impressively, but asks Bernard if anyone has talked to Patrick Boylan about this.
"No”, Bernard replies. "Do you think we ought to?"
"I think we should," Mark says with considerable understatement.
"Shall I do that, or would you like to?" asks Bernard.
I have a feeling I know the answer to this one. Mark, who as I suspected is not stupid, suggests that maybe Bernard would care to have the pleasure of that particular conversation. I am sure Bernard relishes the challenge.
Patrick Boylan is the Managing Director of Card Services. Depending who you talk to, he is either our most brilliant MD, with a superb track record, an American Vietnam veteran with great leadership, motivational and management skills, or a power-crazed, inconsistent egomaniac who does whatever he feels like doing and ignores Group direction. Both views are held within NatWest, but there is no doubt that Patrick has done great things over the few years he has been at NatWest; we are catching Barclaycard, the market leaders, and in some areas are already ahead of them.
However, I would rather listen to the collected works of Celine Dion while gargling mud than tell Patrick his business has gone. His reaction will be volcanic I suspect. But Bernard is saved (at least temporarily) when nobody can find Patrick's new phone number as he has moved house. That does not say much for our emergency contingency procedures, but at least Bernard lives.
Tim Jones turns up at lunchtime- he is MD of the Retail Bank, the biggest single part of the Group but also arguably one of the main problem areas in terms of recent performance. Tim also expresses some concern about some of the stuff we have come up with, but is told by Mark Fisher, fairly politely, to shut up, as he hasn't been around all weekend. This is interesting as Mark works for Tim. Perhaps Mark knows something I don't about the future management structure, or perhaps he is braver than I would be with my boss.
I spend most of the afternoon with a couple of others writing a document to implement some immediate cost saving measures. There will be an immediate freeze on recruitment and pay rises, we will try and get rid of contract staff where possible, cut back on consultants, travel and training. There is a danger this will look like a panic reaction, but we have to make absolutely sure we hit the targets (revenue, profit and cost) for this year.
Andy Lister is extremely important in putting this together. He is a youngish guy from HR, and knows everything about the cost of employing staff, the bonus schemes, pensions and company car costs. That sounds really boring, but he manages to be humorous and dynamic as well. One of the few good things about this process is I'm getting to meet or see a different side to colleagues whom I don't normally work with this closely. Some are very impressive; some would be straight out the door if I were running things.
There is much debate about the wording for the note to go out to staff on the cost saving measures. We have some arguments over the positioning of it - is it in response to the bid, or would we have done something similar anyway to ensure the '99 targets are met? The honest answer of course is both, but everything issued from now is going to be looked at with an air of paranoia - how could our enemies in the press, or the analysts, interpret this? The cost document could be seen as a knee-jerk reaction to the bid - does NW only manage costs once we're under attack?
We can't really tell the truth in one sense; everyone in the Group has a stake in hitting these targets, because it is fairly clear that the last resort if we are not hitting targets will be to cut the staff bonus payments. Oh, and Derek Wanless doesn’t turn up to thank us for our hard work.
* 2019 notes; Norman Blackwell has had a stellar career since NatWest, in government and business. He is chairman currently of Lloyds Banking Group, and was chairman of Interserve, leaving in 2016 before it hit big financial problems.