Morning:
8°c
Andy Hornby is sitting in a Starbucks. At 42, he's just been made chief executive of one of our biggest, best-known businesses, Alliance Boots. But he's not wreathed in smiles and high-fiving it over the lattes.
This is a subdued Hornby, someone who says he is acutely aware that there are those who think he should not have got the Boots job, that, given his recent past, running HBOS, he should probably never work again. "I don't want to be seen to be jumping up and down," he says.
The past few months, which saw him leave HBOS after it was taken over by Lloyds in February and appear before MPs on the Treasury Select Committee, had been "very tough, because you're living through the stress and tension of all the events, but then you're trying to rebuild both your future career and making sure your family is OK". He adds: "I feel both grateful and humble to get this opportunity."
To be fair to Hornby, he never was one of the worst villains of the banking crisis. Yes, he ran HBOS, which was one of the biggest wrecks of the drama. But he also presented the most contrite public apologies and unlike some, he didn't leave with a pay-off or giant pension pot. "It was a very tough experience. I did take very seriously what happened. I fully understand why there was a lot of anger."
He didn't take the money because "I felt it was the right thing to do". He points out, too, that "every single year I ran HBOS my bonus was paid in shares. I didn't take anything out - I suffered along with the company."
When we look back at the trauma, Hornby will be singled out as possible proof of what went wrong, that he wasn't a banker at all but a retailer, ex-Asda, who took over the vastly complex task of directing one of our largest banks. Stefano Pessina, the Boots chairman, got it about right when he said of Hornby's reputation: "As a banker, it wasn't particularly brilliant."
In many ways, his appointment, from overseeing George at Asda to marshalling the combination of the Halifax and Bank of Scotland, can now be seen as the nadir in the whole, desperate saga. While Hornby was good on the touchy feely Halifax side, having been well-schooled in the art of customer service at Asda, his young, "ask Andy" manner did not translate well to the capital markets and risk-taking. Looking back, he argues that nobody foresaw that the wholesale money market might freeze. "I, among others, wish I'd seen it more. Clearly, I wish there had been the possibility of seeing well ahead. We did end up with a model that was too weighted in one direction."
What about the charge that his lack of banking experience meant he was unable or unwilling to rein in some of the excesses of his senior Bank of Scotland colleagues, notably their concentration on UK commercial property lending? "It's very difficult to be drawn on that. I don't want to cast blame on others. I accept that some of the parts of the operation were harder hit but I'm not going to apportion blame." (It was that refusal to accuse that made him appeal to Pessina.)
Hornby never was one of the Scottish banking Mafia who failed so spectacularly. The son of a headmaster, he grew up in the West Country and read English at Oxford. After university, he joined the Boston Consulting Group, spent three years there and then went to Harvard where he came top of his year of 800 MBA students.
His first front-line business job was at Blue Circle, then he was headhunted to join Archie Norman's team at Asda as corporate development director. Later, he ran 36 Asda stores with 14,000 employees before taking over the George clothing line.
Sir James Crosby alighted on him to manage the Halifax's High Street branches. In 2003, he was approached to become CEO of Boots. He turned it down - Crosby tied him in with a lucrative deal and made him chief of the whole HBOS group. In the end, the Boots job went to Richard Baker, another Asda alumnus.
Roll forward to this year to an out-of- work Hornby. While his reputation as a banker was shot to pieces, his record as a retailer was untarnished. He retained his non-executive directorship of Argos and Homebase operator Home Retail Group. Plus, other offers were made to him.
But, he says, "I'd always known Boots, ever since 2003." And once he was contacted by Pessina and KKR, the Italian's backers, and went to see them, "I immediately thought it was an interesting, exciting fit. Where Stefano wants to take Boots impresses me a lot."
He doesn't start until 1 July and maintains it's far too soon to say whether there will be an early "Andy Hornby effect".
At Asda, Friday was "Thank George it's Friday" day, where all the senior executives kitted themselves out in George clothes; shops were described as "theatres" - lively, destination venues rather than boring supermarkets; job titles were banned, so that everyone - no matter how junior or senior - was a "colleague"; meetings were held in branches around the country and were often conducted in huddles in the aisles; and managers were trained to use the computer and backroom systems so no corner of the enterprise was beyond their scope.
What he can say with certainty is that he will "work with Stefano to continue to manage the growth Alliance Boots has been achieving since Stefano took it private two years ago". Ironically, at the same time, Baker, his former Asda workmate, left with £12 million. Here we are now, with Pessina hiring someone not unlike Baker. One of the attractions that became apparent in what he says were lengthy discussions was that "I'm going back to an environment where I hope I can deliver in a very straightforward management way. I will be part of a team, in retail and wholesale - Alliance Boots is a fantastic brand, a fantastic business. I'm very comfortable and happy to be part of the team under Stefano."
Pessina was looking long-term - something that married Hornby's wish not to be chopping and changing so soon after the HBOS debacle, to be seen to be making a real go of his next job. Alliance Boots is also privately owned. "Given what I've been through it's a positive rather than a negative to be out of the public limelight," Hornby says.
The money - his pay is high six figures - will also help. Mostly, though, what comes across is a sense of relief. He doesn't want to dwell on it but there must have been moments when he wondered if he would ever work in a senior capacity again.
Hornby insists he is a better manager for what he went through with HBOS. "Everyone who was working closely in the financial crisis should have learned a hell of a lot."
On another, positive note, he laughs, he's had more time to run (he is a fitness fanatic). But he's quickly serious again. "I don't feel like gloating. I'm just really pleased to have a chance to get on and do some good work."
Reader views (6)
He's a disgrace he is. No shame there. Talk about a brass neck! "Every single year I ran HBOS my bonus was paid in shares. I didn't take anything out - I suffered along with the company". It makes you want to puke that. These guys are completely deluded and utterly out of touch with the real world. They really do need a good kicking. I was a HBOS as an employee for 12 years and left 3 months ago - of my own volition. Hornby had no business getting involved in banking. He's a greengrocer and should stick to it. For all his qualifications he doesn't seem that astute. Just another arrogant bighead who thinks he knows it all (Like so many of these MBA idiots). As Jim says he should be struck off and forced to leave the country. We don't need his type running banks into the ground. I'd strongly advice Boots to get shot of him immediately before he bankrupts you lot too.
- Paul Sharkey, Edinburgh
I have an MBA and understand therefore how pumped up and arrogant they often are and among the last sort of leaders one would want to avert a crisis.
Whilst many have lost jobs and pensions because of HBOS, by being able to step into a role at Boots, Hornby has effectively lost nothing. This is unbelievably unprofessional and morally wrong and provides no disincentive to similarly arrogant and business ignorant MBAs to wreak potentially even worse havoc in organisations in the future. If CEOs do damage that potentially brings an economy to its knees surely they should be struck off in the manner dentists, doctors, lawyers and accountants would be?
- Jim, london
Hey, Spandavia, you are onto something. I feel a song coming on, one by Paolo Conte which with minor alterations could be Andy Hornby's song . . . Via, via, via con me, it's wonderful, it's marvellous, Good luck ma baby, I dream of you, Boots, Boots, Boots . . . dootchy bum chi bum bum
- Nick Cotton, West Sussex
So glad he's learned "a hell of a lot." Many of us who had the misfortune to have dealings with HBOS would say we've "lost a hell of a lot.
Well done Boots - and consider this old Italian joke - ha perso billioni - no, di pu, millioni!
- Spandavia, UK
Although Hornby has a right to work i think he has made a terrible mistake in accepting the Boots position. It makes him look arrogant and isolated to the world. He should have taken 6 months off and done some work for a charity.
Also Pessina is a snake. All this talk of making Boots a bank smacks of back door asset stripping for hedge fund shenanigans. Again another reason why Hornby should have taken an extended vacation to sort out his head. Expect more drama.
- Sebastian, Brent
As with J. Ross, there is no such thing as bad publicity. Let that be a lesson to other aspiring executives and narrow-minded headhunters and their clients.
- Nickcotton, West Sussex UK
