The impression was of a man who needed a deal
The impression was of a man who needed a deal.None of this is right, according to Taylor. He will not be outstaying his welcome at Barclays but there is a lot left to do before that time comes. And as for consolidation, he views that as inevitable as tomorrow’s dawn.. SUCCESSION PLANNING has suddenly become one of the key issues for owner-managers. Many entrepreneurs hope that their business is something they will be able to pass on to their children. All too often, though, the family’s “rags to riches” story ends with “. and back to rags again”.
A combination of poor planning, tax problems and family conflicts can conspire to prevent the original founder’s heirs ultimately seeing the full value of the business.American research shows that only one in three family-owned businesses survives from the first to the second generation, and a mere 15 per cent make it to three generations.
The European Commission estimates that around 1.5 million small businesses in Europe run the risk of failure through succession problems.In Scotland, around 90,000 businesses are owned and controlled by families. According to the Centre for Family Enterprise at Glasgow Caledonian University, half of Scotland’s family firms will pass into new hands in the course of the next 8-10 years. The relative investment positions of Barclays and NatWest have reversed. The City liked the last set of figures from NatWest, for so long the whipping boy of the sector, but was unimpressed with Barclays’.For some, the sale of BZW’s equities arm was a turning point. Most banking analysts agree it was the right decision, but it seemed a shabby and disreputable retreat. Undoubtedly it marked a change of heart for Taylor, who until then had been investing heavily in the attempt to create an integrated investment bank along Wall Street lines.
U-turns always damage credibility to some extent.So what is Taylor going to do next? When he accepted offer from Gordon Brown, the Chancellor, to head up the Government’s tax and benefit review, it was widely assumed in the City he had lost interest. Taylor’s belief is that the organisational and personnel changes he has introduced, the reforms in risk assessment and credit control, the attention to costs, will ensure that the down is very much less than last time round.Essentially, the City has bought the story But there are still doubts. If there is a recession, bad debts are going to rise again and profits are going to fall.Of that there is no doubt. I wanted it to become very much less formal, and more disciplined at the same time.”Nearly five years on, has he succeeded, or has he just ridden the upturn in the economy? Certainly his profits and share price have stormed ahead, but that is true of nearly all banks.
The organisation confused formality with discipline and professionalism, it assumed that because everyone kept their jackets on at meetings, knew their place, and conducted things only through the proper channels, that this was proof things were being done properly, whereas actually the business was not disciplined at all. It seemed to swing from the extraordinarily mean to the extraordinarily reckless, with not much in between.”But mostly it was the behaviour of the people which worried me. There was a rather strange attitude to money, which we didn’t recognise at all from the other side of the business fence. I wanted to get that down on paper before I became part of the tribe. Put it this way, Jeremy, if I had been so rash as to publish what I wanted to do with Barclays, I wouldn’t have achieved it yet.”So what struck him most? “Credit-risk processes and ways of thinking And then the way people behaved with each other.
