Sir Alan Sugar: Amstrad and The Apprentice
The Amstrad founder and star of The Apprentice talks leadership, TV and business
Lessons in leadership
With Gordon Ramsay and you around, is there still space for more diplomatic forms of leadership?
Ramsay has a certain style. I’m not sure how much of that is for the drama of the programme and how much is his way. From my point of view, when we do The Apprentice, for each programme we have 100 hours of tape for each episode, filmed by five or six crews. The boardroom is a three-hour session. It’s reduced to 10 minutes. In my case the lightheartedness and humour is ditched on the cutting room floor. They keep the aggressive side, although you can’t show something I haven’t said.
Part of the fun is understanding how the TV production company is getting on and getting one over on them. I do get angry and tough with people, but I’ve got 80 or 90 core people around me. You might get eight years for murder now, but they choose to stay. I’ve got people who have been with me for 15, 20, 30 years.
Donald Trump is an effective businessman and he’s not humble. How does he lead so well?
I am a simple man. Simple upbringing. I’m a great believer in giving something back to the community. I’m not an artist, musician or teacher in an academic sense. All I can do is instil entrepreneurial spirit in young people. On the other hand I’m a businessman and not running a benevolent society. The aim is to make money. Some may argue that is crude and not acceptable. But it’s important one has humanity. I give it back in mentoring young people.
Where does integrity rank in leadership skills?
It’s something that Branson places a lot of stock in. Richard has a very similar philosophy: I would not sell something I haven’t got my heart in. That’s very important. People who’ve been in business as long as I have know it’s not a stroke of luck. We produce good-value products. We’re not Rolls-Royce, but it’s there and does what it says on the tin. I read about a businessman who ran his life as a scam and has been banned from being a director by the DTI. Those people are short term. All business leaders are not short term. I would never knowingly produce something where I cannot put my head down at night.
Some companies have values, but even though they’re profi table they don’t live up to them.
Business is driven by shareholders who want a return. If I had an oil well in the back of my house I’d make as much money as I could. But if I had a water well I wouldn’t tell people it was oil.
The best leaders are Olympic standard at one or two things. Is this true?
The answer is so boring, but the amount of times people come up to me with an idea and my computer brain goes straight to how much money we can make. I can see if it’s flawed from the minute they open their mouth. The focus is not there – bottom line, how much money, how long to recover the money we’ve spent. I do that within seconds.
Which businesses and contemporary business leaders do you admire and why?
I’m a great admirer of Rupert Murdoch. I’ve known him since 1987. I like his cavalier approach. Richard Branson is a similar age to me and started in business at a similar time. He has a way of not getting involved in detail – he recruits lieutenants who understand it. I could tell you where the last bolt in my company is; what room, which drawer. It’s not clever, but it’s something I do.
I admire Philip Green. He’s become a retail giant of this country. And I admired Arnold Weinstock who ran GEC. He was a very clever man, but just before he passed away he watched the mother-inlaw drive the Ferrari over the cliff. All these clever people at the Stock Market. People used to tell him about telecommunications and he’d mumble, “piss off” under his breath. They brought a ‘brain surgeon’ in. Within a year this person pissed £4bn up the wall and built up £4bn worth of debt by following what the Stock Market wanted.
Life in business
What was your biggest mistake and your key learning from it?
You learn from your mistakes. I would sign up to that 100%. In the US the stigma of being bankrupt or going to Chapter 11 is not looked down upon or frowned on as it is in Europe – as long as it’s not fraudulent and happens despite good intentions. Some of the biggest billionaires say they’ve bankrupted three or four companies on their way up.
You haven’t got enough time to listen to my mistakes – like the gambler who tells you how much he’s won. In my case, business is a gamble and I’m ahead of the game. In the rest of your life you will not earn 10% of the money I’ve lost. Make a mistake, move on. Fortunately I’ve never had to bankrupt any company.
When have you had to change or adapt?
When I finished swearing at Bill Gates once, I realised I’d have to go about it in a different way. When I started, I would pick up the phone to Stanley Kalms of Dixons and agree a deal, boss to boss. Now there are layers of management. They can stretch conversation to a month and cock it up royally.
Within five minutes you have a feeling of whether there’s a deal or whether you’re flogging a dead horse. At the moment you’ve lost that feeling because you’re dealing with MBAs, wet behind their ears. They decide whether a project has legs. Some may be able to remember back to 1984 when I brought out the word processor. It was an outrageous product. They would have looked at it and compared it to Wang, saying, “It’s only sold 500 a year, it’s not a consumer brand.” We sold hundreds of thousands and made a lot of money.
Unless you bypass the bureaucratic crap of arsecovering you get nowhere. Tesco by sheer critical mass can come in and take it away from everybody, but they never lead. I’m not a retailer, I’m a product innovator and manufacturer. Product delivery is becoming an insurmountable task. It’s suppressing innovative products.
What effect did your relationship with Tottenham Hotspur Football Club have on people’s perception of you as a businessman?
Take Richard Murray at Charlton. He’s not vociferous. He doesn’t appear to have been involved in a football club to be seen publicly. I had a particular passion for the club. Tottenham were going bust, down the tube, and I stepped in. When you started to see the archaic way the business was run I had to. It was a period where there was great growth.
I hold the record of going into a club with money and leaving with a handsome profi t – it is a good business if run properly. That was refl ected in results on the pitch, though. I was a regular at Premier League meetings and a lot of what I was preaching has come to light. They’re all skint these clubs, with the exception of three or four.
Any advice for managers hiring new talent?
That’s difficult. I used to have an employment officer running PAYE. That changed to fancy names like human resources officer. There’s a HR officer that only allocates two hours a day to actually working. They spend more time organising meetings to organise the next meeting and what food they’d like and how to get away on time to miss the traffic.
With that HR tosser, you’ve got to pass the dustbin test with your CV in order to get a chance to project your personality. Like it or not, people come with MBAs and I tell them I don’t give a shit. All it tells me is they’ve got a certain level of absorption. You’ve got to get GCSEs, A-Levels and don’t forget your gap year – it gives you strength. It’s difficult to get a sense of someone in a short space of time.
When it comes down to creative people – software engineers, for example – it’s a blind science and the biggest frustration, watching a room full of people with spiked-uphair flicking elastic bands at each other. The question is, ‘Are you nuts or mad?’ If you are, good, you’re hired.
How do you make money from property?
Like any other business, you have to be experienced. It’s a dangerous time now. It depends whether you’re referring to residential property or buying Buckingham Palace with £500m from HBOS. In the past eight or nine years, you have to have been braindead not to have made money from it, with an over-supply of money to spend.
All of us are trying to work out whether that’s it. Is this the peak? No, it’s still going. It’s a dangerous environment for a new company. There’s no such thing as a bad buy in property, so long as it’s with your money. I’ve bought some terrible things in my time, but as I wasn’t borrowing, I got away with it.
Being Sir Alan
Who or what would you give credit to as the driving force behind your success?
Me. I started out of the back of a van. It’s not a fairy story, it’s true. I literally bought stuff and went out selling to dealers. As time went by I needed a warehouse and needed employees and relied upon those employees. As it grew I needed an accountant and relied upon him, then I needed an engineer… I have a social conscience and share options schemes that have worked for those people. They’ve earned it.
How do you chill out?
I can’t chill out. I’m on 24 hours, seven days a week. BlackBerrys have made it even worse. The problem in Britain is that at Christmas time, unlike the rest of the world, everything shuts down, so I’ve got no one to talk to. That’s the pathetic side of me. I play sport, tennis. I don’t go to the theatre or cinemas. I’m pretty boring.
How do you instil the same passion in staff?
There are times you need to inspire them and join them in on the plot. Picture a scenario with a room of engineers. There are times when engineers get enthusiastic about things that have no legs. It’s tough to give them a soft landing and not demoralise them to get them to focus on things that bring prosperity to the organisation. That face-to-face contact is necessary with key people.
How do you deal with negativity?
Not many people around me express negativity to me. I imagine a baseball bat to bat negativity away.
What stops you leaving it all behind?
When things go wrong and you deal with inefficient people. If I stopped running Amstrad, the thing that would get to me would be the locksmith who said he would be here at 9am and it’s 9.30am or the water that’s still dripping from a tap and the plumber is not here. I’d be as wound up as I would with a 100,000 shipment not shipping. The poor sod wouldn’t know what had hit him.