In 2004, a journalist noticed a familiar face queuing for an EasyJet flight. It was Charles Dunstone, boss and millionaire founder of Carphone Warehouse. That same year, the head of Royal Bank of Scotland (RBS) opened a shiny £350 million head office near Edinburgh. One was sending out a message about modesty and thrift; the other was showing his boastful, flashy side. By 2009, Charles Dunstone had led his company to become one of Britain’s most profitable businesses, and Fred Goodwin, boss of RBS, had led his business into the ground (Box 1).
As with many things in business, the wise person waits before answering this question — preferably for at least 5 years. In 2004, Fred Goodwin was ‘Fred the Shred’, famed for his ruthless but very successful integration of the NatWest bank into RBS. Business journalists treated him like a guru. He seemed to be a man with a mission (he took RBS from a small regional bank into the world’s top five) and a man who could turn a plan into successful action. People thought he was a great leader, and he was given a knighthood. Unfortunately, Sir Fred grew the business too far, too fast. In effect, he began to believe all the hype and praise — and thought he could walk on water. His final, extraordinary action — after the credit crunch had hit — was to pay £49 billion for the Dutch bank ABN Amro. This led to RBS’s collapse into state ownership.
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