Warren East finds it’s a different game at Rolls-Royce
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Your support makes all the difference.It’s striking how far and fast Rolls-Royce has fallen. Here was a poster child for British manufacturing, debunking the myth that it was something this country just couldn’t do.
Things look very different now that chief executive Warren East has unveiled yet another profit warning.
He may, of course, be indulging in a little kitchen sinking as he gets to work on a turnaround plan. Those who like having something on the UK stock market to invest in that isn’t a bank or a natural resources company had better hope so.
Prior to joining Rolls-Royce, Mr East spent nearly two decades at Arm Holdings, which was the poster child for the British IT sector and which he left in great shape.
He’s a clever chap, having been educated at Oxford and Cranfield School of Management. He’s also a fan of the Welsh rugby union team. Those who follow its English equivalent will be well aware that the skills learnt in the other code – rugby league – don’t always transfer. Of course the inclusion of Sam Burgess, who made the switch, in England’s World Cup squad was by no means its only problem. But his rapid return “home” tells you all you need to know.
Fortunately for Mr East, business leaders are somewhat less exposed than top sportsmen (although they are fond of pointing to the pay of the latter to justify their own). They tend to have a small army of people around to help them, and if they pick the right ones, their own shortcomings can easily be masked.
Not that I’m suggesting Mr East has shortcomings when it comes to Rolls-Royce. But we will only really find out in a couple of years’ time whether he has successfully switched codes.
One of his first steps has been to announce a raft of cost-cutting measures, which is what executives in his position always do. A lot of managers are going to lose their jobs as a result, and that’s no bad thing given the state that the company has got itself into.
Rolls-Royce has been dealt a tough hand by its markets – which is something Mr East never really experienced at Arm – but all is not lost. He just needs to be sure he has what Sam Burgess didn’t after he’s finished swinging his axe – he needs a strong team around him.
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