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Keith Hann column.

Byline: By Keith Hann

I've always had a soft spot for mavericks, which is just as well since I've spent most of my life working for them.

I particularly admired the way that Morrisons went on delivering consistent profit growth for 35 years while cheerfully defying City conventions.

Its annual report didn't contain pictures, never mind a ritzy mission statement. And where other companies held colourful presentations to City analysts and the media, Morrisons took telephone calls in Bradford.

All of which was fine so long as they were delivering the goods. But now the wheels have come off and those long spurned journalists, brokers and fund managers are queuing up to take a kick at the Morrisons management.

What lessons can we learn from this? First, don't start trying to make friends when you need them: it will be too late. Secondly, make sure that the City needs you more than you need the City. If you want to be free of irksome interference and hostile comment, aim for a strong track record and achieve it organically rather than by expensive acquisitions, at the same time preferably keeping borrowings low.

Beware the siren voices of City advisers who come knocking on your door with brilliant deals that will transform the prospects of your business.

Research suggests that most acquisitions destroy shareholder value, and the only sure-fire beneficiaries of any deal are the people collecting fat fees for executing it.

Thirdly, never underrate the importance of common sense. I struggle to run a bath, let alone a public company, but every now and then I have flashes of insight when I think `I could do better than this'.

One such was when I went into my local Safeway and saw notices proclaiming what its conversion to Morrisons would mean: more staff, shorter opening hours and lower prices. It seemed naive to wonder how that mix was going to make more money. Experience shows that it wasn't. Finally and most importantly, never forget that the key to success in business as in so much else is knowing when to quit. Sir Ken Morrison could have retired at 70 and been acclaimed a retailing genius and hero.

Instead he is stuck in a mire of profit warnings and abuse from teenage scribblers he doubtless abhors.

Keith Hann is a PR consultant (
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Publication:The Journal (Newcastle, England)
Date:Jul 6, 2005
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