Don’t Stop Trying Things: Reed CEO James Reed

0:00A CNBC original podcast. In 1994, James Reed decided to join the family business after being pushed off the fence by his father. My father said to me, there's no point having a family business if there's no one else in the family in it. Do you want to join me or not? And I was sort of sitting on the fence. He made me an offer I couldn't refuse. It became the defining decision of his career, not because it was obvious, but because he saw it as a risk. He had already set himself on a different path and worried about living up to his father, knowing that if it went wrong, it could mean leaving the business altogether.

0:35It was a good decision, but at the time it wasn't an easy decision because I had anxieties around it. I remember someone saying, you know, it's better to paddle your own canoe, even if your father has a ship. What Reid learned from that decision and from the many mistakes, reinventions and bets that followed became a simple rule. The worst decision would be to stop trying things. That outlook would guide him in the boardroom and beyond, even on a mountain where a near-death experience reminded him to live more purposefully. It changed me as a person, it changed the way I think, and it changed my priorities.

1:07I'm grateful for that. These are James Reid's executive decisions.

1:17Your story is a multi-generational one, and it would be remiss of me not to start off by talking about your father as well. Sir Alec Reid, who passed recently and was such an enormous influence to you. How big an influence was your father, is your father still in your career? Well, firstly, Steve, thank you for inviting me to talk to you. My father was a huge influence and continues to be in my career. I mean, he's a wonderful entrepreneur, a wonderful man, a great philanthropist, and above all sort of inspiring. So he inspired me as a kid and continues to do so now in my adult life. So I'm very grateful.

1:57I feel very lucky both to have known him, but particularly to have been able to call him dad. I mean, he was a special man. He died recently, as you say. He's left a huge hole. He started Reid in 1960, I think, in Hounslow with a£75 pot of money to build his business. Do you know really what galvanised him, what made him do that? rather than following into someone else's company, for instance. Yeah, I do. He was very frustrated that he couldn't put his ideas into practice at Gillette's, where he worked before. And they were kind enough to give him awards for his ideas, but he was a sort of ideas machine.

2:37He had a genius for ideas. And he was very frustrated. He just wanted to do his own thing and be self-employed. I remember him saying, all I wanted was to be self-employed. If I could earn as much money as I did at Gillette, I'd have been happy with that. So he set up on his own and my granny used to help him do the books. And he worked on his own for a year in Hounslow. But what's interesting, he told me more recently that he made a profit from the first week. He said he didn't need any money to start the company. I mean, you mentioned 75 pounds, which is not much. But he said that the business took off from the first week.

3:09And he said he had two ideas that made that happen. The most important was he charged more than everyone else, which is quite an interesting entry strategy for a business. And he realized that he could do that because there was such demand for staff. And there was such demand for staff because Heathrow Airport was being expanded. And just by his good fortune, he was born in Hounslow, the borough of London, West London, best known now for Heathrow Airport, which is right in the middle of it. Your grandfather has some fame as well. Am I right in saying that your grandfather during the Second World War was part of the Ministry of Information and actually was part of the team which came up with perhaps one of the most famous phrases of all time, which was keep calm and carry on?

3:53Yeah, that's right. My grandfather, Leonard, he was a graphic artist and he worked in the Ministry of Information and was responsible with the team there for producing propaganda posters. And that was the poster, Keep Calm and Carry On, which was going to be put up. had the Germans landed and invaded. And apparently this was a phrase he used to sort of use around the house during the Blitz. And then it ended up on the poster. And so, yeah, we come, well, I feel fortunate. I come from a family of artists and entrepreneurs. My dad's always complaining there are too many artists, not enough entrepreneurs, Steve.

4:27But I think they have something in common. Entrepreneurs and artists, they never retire. They just love what they do and they keep going. And I feel blessed to have that. You found inspiration from day one from your family around you as well. Did you think you were always going to move into the family business? Or I know you were at various places beforehand. It wasn't a fait accompli that you'd necessarily carry on in the family business? No, it wasn't. I suppose reflecting back now, I was worried about following in such big shoes. I mean, he was very successful. He was well-loved in the business.

5:04I thought, well, you know, I don't want to mess that up. So it was important to me to sort of learn and do my own thing and get pay rises and promotions elsewhere under my own banner. And I suppose I was very lucky because I was always interested in working for entrepreneurs. Maybe it was something about growing up in an entrepreneurial family. What was the guiding mission for you in your early part? Did you always know that though that by the late 90s you would probably go into the family company? Or actually did you think about going on other routes first? I thought in my 20s, I thought this is a great opportunity being young to try stuff and find out what I really like doing and what I enjoy and maybe even might be good at.

5:46So I think it's an opportunity for young people to do that because, you know, before you get too tied down with sort of mortgages and families and things, you have a go at stuff, try things. So that was a big part of my plan. And I suppose as I got closer to 30, I started having children. That was when I began to think more seriously about joining the family business because my father said to me, basically, you know, there's no point having a family business if there's no one else in the family in it. He'd turn 60. Do you want to join me or not? And I was sort of sitting on the fence and he made me an offer.

6:23I couldn't refuse, as they say. Didn't he actually turn around to you saying something along the lines of, look, the job is going to be advertised in the Sunday Times appointment section next week. Do you want to apply or not? Yeah, that's exactly what he said, Steve. And that got me off the fence. And I'm very glad it did. He had to give me a shove and it got me off the fence. And I joined him. This was in the spring of 1994. And you like talk about decisions. I look back on that and think that was a really good decision. Was that the best decision you've ever made? Yeah, well, probably, yeah, looking back, because I wasn't sure at the time whether it was a good decision or not.

7:01It was a hard decision. It was a hard decision because there was quite a lot to weigh up. The company was coming out of a recession. It was growing. There were actually three different jobs he asked me to consider. And the job I took was an operations director job. So it was a difficult job. and I took that job because I wanted to find out whether I could do it or not and so I took a bit of a risk because if I couldn't do it I knew that then the next rest of my career wasn't here sort of thing. So it wasn't obvious that you would ultimately fill the shoes of your father and become the CEO of Reid?

7:36No definitely not no I mean there was a very capable managing director there at the time who I worked for so you know no it wasn't obvious and I needed to earn my spurs, so to speak. You know, the company was and continues to be a very competitive business, working in a very competitive market. Despite the fact that your father started the business model by charging more than others. Yeah, well, that just shows. Which you couldn't do now. Well, I wouldn't advise it, but maybe in some sectors. I wouldn't want to do it in hours. It was a good decision, but at the time it wasn't an easy decision because I had anxieties around it.

8:08And, you know, I was enjoying my work at the BBC. I remember someone saying, you know, it's better to paddle your own canoe, even if your father has a ship. And there's some truth in that. You said when you took over, you'd be very worried about how you would cope during harder times. Can you think of any examples where you've made the wrong decision or you've made a bad decision for the business and how that has affected you and how you reacted thereafter? I don't know if they were bad decisions. And I mean, sometimes you make a decision with the best information and then it doesn't work out.

8:43So I'm thinking particularly of investments that we've made where we've tried to start a new venture or open an office in a new market. And I'm thinking of quite a few places that we used to have offices in we don't anymore or the lines of business that we started that we didn't succeed at. But I think that's a vital part of being an entrepreneur. You have to keep trying things. and the worst decision would be to stop trying things. So we've made lots of mistakes. Do I think of them as bad decisions? No, not really. I mean, I think I was thinking the other day, you know, what is a life? And life's a lot of different things, but in a way it's an accumulation of decisions.

9:25You decide to do one thing, then the next. And our business has had a good life so far. We've made bad decisions, sure. But the good thing about making a decision is you can always make another one. And that's what you should do. I think the worst thing is sort of being frozen in the headlights and not making a decision. Yeah, change is good. Change is always going to happen. Change is going to happen around you. But it's a question of how you adapt as a business as well and how you adapt as a person. Well, it might be bad. I mean, but change is inevitable. I mean, nothing stands still. And so you've got to try and go with it.

9:58And if the change looks bad, you know, are there any opportunities it throws up? You know, in a recession, actually, it's a great time to hire talented people there are lots of great people available if you go looking in a recession it's a great time to acquire assets that may be cheaper than usual so there's always something you can do whatever the environment that would help carry your business forward i think i want to just explore the relationship between you and your father and that handover a little bit more if I may as well you couldn't have had a different start from your father your father was 16 and left school and yet that didn't stop him having multiple professorial ships and doctorates later on he was a late developer but you had the most extraordinarily privileged education so Paul's Christchurch Oxford MBA Harvard Business School as well it couldn't have been more different from your father just you know what yeah no that's very interesting and it's absolutely true so he left school at 16 and his mother you know insisted he went to night school to learn some get some qualifications eventually after multiple attempts became qualified as an accountant and subsequently got you know awarded three doctorates and he was a professor three times and you know he he did really well in that respect but he was always very keen that we should get a good education i mean he he earned his own money and he came from a very humble background, but he was really keen to invest that in us, me and my siblings, in a good education.

11:34So I was the first member of my family to go to university, for instance. But I remember him telling me when I was about eight, you should go to Oxford. And it was sort of in my head. He sort of planted it as a goal as a kid. And he'd never been to Oxford. I barely knew where it was. He sort of planted this at me. So that's interesting. And then I was thinking, yeah, I better go to Oxford then. So I sort of made that a sort a goal and I did and then I remember him saying well you should probably go to business school you know the best one's Harvard and so he was very good at sort of planting these sort of ideas and sort of uh encouraging me in that way and I enjoyed learning I still do I'm a curious person as was he so I enjoyed the experience of learning studying and and I thought well I want to get as knowledgeable as I can so that I can go out and use this education I never thought of education as something that finished when you got your degree.

12:26The whole point of that was to go and apply it in the world, I thought. But you and I grew up, you're a little bit older than me, but not much. We grew up in a time when actually if you were hardworking, moderately smart, and I say moderately in my case, a lot smarter in your case, you could get a job. It wasn't hard to get a job. And if you worked really hard, you could get a good career as well. Did we need that kind of level of education when you and I were hitting the workforce in the 80s and 90s? Well, certainly, I think it's harder to get a job now. I mean, there were periods in the 80s.

12:58They are very different. I appreciate that. But there were periods in the 80s when it was very hard to get a job. You know, unemployment was very high early in the 80s. Yeah. And there were periods in the 90s when it's easy to forget now. You know, it can change quite quickly. You know, three years ago, it was very easy to get a job, and now it's not. But specifically when we were growing up, though, there were jobs galore, weren't there, James? There were lots of jobs. Yeah, and I think one of the things that was different then is there were lots of opportunities for young people, teenagers, to go and work part-time, do sort of holiday jobs, work in the supermarkets.

13:27And I remember working in an ice cream van at a thought park and doing all sorts of funny jobs, which was really quite formative, actually. I look back on that and think, actually, I learned quite a lot about people. Did you learn a lot of your first job, James, which I think I know what it was? I think I'm right in saying I know what your first job was. My first job, well, I'll tell you what it was, just in case, was working in a cemetery, levelling graves in Old Windsor. You know, I learned from that job that I didn't want to do that for the rest of my life, I tell you, because it was cold. It wasn't a lot of career progression there, was it?

14:00No, it was cold, but it was quite well paid,$2.50 an hour at the time, which was quite good. And it was tough. It was a tough job. But I'm glad I did it. I'm glad I did it. I remember it fondly. How do you feel about the accusation or indeed the comment that actually nepotism, it was rife for many people and for you as well that was how you got your job that's how you got your big break as well and the importance of it well i would say guilty as charged i i i can't see it any other way yeah it is nepotism but i think it's interesting how you how you approach that i remember feeling that as a pressure not as a gift i remember thinking i've got to work harder than everyone else because they're going to be looking they're going to think oh that's alec reeds some what's he doing yeah so i've got to make sure i felt that i had to be as hard as hard working as the hardest working person and i really wanted to do well so it's a i didn't see it as a sort of privilege you know i just get the director's parking slot and all that crap yeah at all i felt it as a you know almost a responsibility and a pressure because it's a very close relationship with your father and your family.

15:14You just didn't want to let them down. Not at all. No, I wanted to succeed. And even now, you know, I suppose it's funny you're asking this question of me now. You know, I'm 62 years old. I've been CEO for 29 years. People still ask me. And yeah, I mean, it's true of any family business, isn't it? I mean, if you're going to carry on with what I call a multi-generational effort as a family, as an entrepreneurial family, there's going to be a founder at some stage, but then there are going to be lots of subsequent generations, hopefully. But I mean, I think it was a Malcolm Gladwell book talking about how we underestimate just how much privilege successful people have had in life.

15:52And I remember my first job in the city of London, a couple of miles up the road when I had my interview in Fenchurch Street. The reason I got that interview is because I went to a school that was a rival school of my first boss, as it turned out, in the city as well. And I got in probably because he knew my school and my sister had been at the same school as him. So I think we all underestimate how much privilege, whether it's coming from a stable middle class background, having a good education, whatever it may be. We underestimate the role of privilege in getting our break and our career ladder.

16:22I'd say my privilege in that sense, slightly different. I mean, you mentioned I went to Oxford, I have a business school, but I learned more from my dad than I did in either of those places. But I feel the same. And I learned from him just sitting at the kitchen table, going out with him, visiting offices with him. and I grew up in a business family. And I think that does give you an advantage if you want to go into business. If both my parents had been teachers or police officers, I wouldn't have had the same input. I'd have probably become a teacher or a police officer. Or ended up in media eventually.

16:53You never know, you could be interviewing me here, James. Or something like that. But it's interesting because you sort of imbue this stuff. And I'll tell you, I felt after going to Oxford, I enjoyed my time. I had to unlearn quite a lot. I mean, they make you think you're marvellous at Oxford, and you're not. You're just a kid at 21, and you've got to go on with your life, and you've got to work hard. There is a problem with too much education. I'd probably get myself into a lot of trouble for this. CNBC hires fantastic young people. They are amazing interns and amazing first starters, and they've had brilliant media education at all kinds of brilliant organisations.

17:32I personally think those individuals would be brilliant regardless of that education. But it's because they've spent all that extra money on their BA and their post-grad qualification that they've got in the door at CNBC. Well, actually, as individuals, I think they are just as good and we could have trained them up anyway, regardless of three, four years in extra education. Well, more and more people are asking themselves that question, thinking, do I need to go to university or should I just go and learn a trade or an apprenticeship? But we have a similar view on this one, don't we? Well, my view is, yeah, I think we do, Steve.

18:03My view is that too many people are going to do degrees at universities that don't help carry them forward afterwards and end up with a lot of debt, having spent three or four years doing something that won't help them progress in ways that they might desire. As CEO of Reid, what are the biggest, most pivotal decisions that you've made? I suppose one decision that changed the nature of our business was taking it private. It was a quoted company. Yeah, it was a quoted company. My father listed the company in 1972. We took it private in 2003. So I'm glad we did that because it didn't really suit our business model to be quoted because we weren't going to the market for funds.

18:45We weren't doing acquisitions. And so it wasn't a sort of pressing benefit to us and there were costs involved. So we left that club at that time. And I guess, you know, it's good in the way our successes and failures are to a degree private. How different was running the company as a private company compared with a public company? Well, I spent, I mean, I was the CEO then and, you know, before we went private. I would have spent more time doing presentations to analysts in the city. I don't do that at all now. No. And answering questions. But it hasn't inhibited the growth of the company? In the question I got asked most when I was the CEO of a public company, your father said that going public was his greatest mistake.

19:28What have you got to say about that? So eventually we answered that question by going private. I presume your father just agreed with you. Oh, yeah, he was quite supportive. I suppose that was a decision he made at the time for good reason at the time. I think there was a picture of him in the Guardian that said, you know alec reed's business goes private after 31 uneventful years on the stock exchange but he would have said and he would have been right the people who bought shares in the company got a good return on it and he did too i was going to say has it been a profitable decision well i don't i'm i don't know what the business is worth now um but i have no regrets no i don't well it's not quoted so there's not a day but i mean um i mean i've got owners of businesses tend to know what their company is worth i'm you know and you could look at the accounts and multiply the profits i I mean, it's not for sale.

20:16So, yeah, I don't really. I know that it's a good business. And I know that, you know, it's valuable and needs to be looked after. I wouldn't be able to put a price tag on it. You were asked a while back by, I think it was a Harvard professor, what is the defining moment of your career? And I have the quote saying you were stumped. It was very clear when you sat back and thought about it, what the big epiphany was in your life. And it came actually quite later on rather than in the early part of your career. Yeah, I think it's a great question. I mean, for anybody, what is the defining moment of your career so far, I think he said.

20:50And it did take me, I mean, it was stumped because lots of things were sort of whirring in my mind. But then it came back to this one thing, which was nowhere near the office and was a moment on a mountain called the Matterhorn in the Alps when I fell and nearly died. Twice. Twice, yeah. So you worked out I'm not a very good mountaineer. No, no, I disagree. You were just pretty unlucky on the weather that day. Well, the weather was bad. But just a little bit of detail, James. You were climbing with some great alpine experts and your son as well. Yeah, so there were four of us. So I went with an alpinist called Stefan Gatt, who's a friend and an amazing mountaineer.

21:33His claim to fame was he climbed Everest a few years ago with no oxygen and then snowboarded down from the top and was the first person in the world to do such. thing and so this kind of caught my attention and he he was he was giving a talk about this and got big standing ovation and i sort of sidled up to him to the end said any chance you'd take someone like me up mont blanc he said yeah sure and so we did this little trip up mont blanc and then after that did many other trips in the arms so about a decade later we went off to climb the matthorne i was 50 at the time this is 2013 2013 yeah i was 50 my son harry was 18 it was a sort of father-son bonding trip not going to the football or something you just know we do that too but this seemed like an exciting thing to do climb the Matterhorn and we got there in September and it snowed and the mountain was covered in snow I should have smelt a rat when I didn't see anyone else on it you know but we headed up and I was doing a traverse crossing a snow slope and the new snow that had fallen was on sort of hardened old ice that had been there all summer and I I slipped and I started sliding, pulling Stefan down with me.

22:43You were roped together. You were pulling him down. Yeah, I was pulling him. Yeah, he was coming down with me. And he said, put your crampons in. These are the big sort of claws that you put on your boots. And the crampons, I tried to put my boots in. It didn't stick. I carried on. And then I remembered I had an ice axe. And it was on my chest. And I put the ice axe with all my weight into the snow. And it stopped. And I was about a meter from oblivion, as was Stefan. And I remember still looking at him as I'm looking at you now about that far apart, thinking just down there to our right was death.

23:17And this moment stayed with me ever since. And it got me thinking a lot. But then I fell again. I was going to say, so there were two incidents on one mound, both of which you could have died on. So a lot of normal, you know, right thinking people think, what the hell were you doing carrying on? Which is what we did. I sort of bullheadedly wanted to get to the top of the Matterhorn. So we carried on. and then we didn't get to the top because the weather got worse and worse there was icy winds and we could see the top but we decided to head back and it was later after the next morning on the way down we are abseiling or i was abseiling and i was the end of a long rope went off at an angle to join stefan slipped and then i found myself at the end of what's called a pendulum fall so if you put 100 kilos at the end of a long rope and swing it swings from and And I ended up dangling off the Matterhorn on this occasion.

24:08And I'd gone around a corner. I remember Stefan shouting, are you all right? And I thought, well, I'm still alive. So I said, yeah, I'm all right. He said, are you sure? And I said, yes, but I've broken my leg. And he said, how do you know you've broken your leg? And I said, because my foot's pointing in the wrong direction. So I was sort of dangling there, high up on the Matterhorn. And so he got a rope to me, pulled me to a ledge, and called the air ambulance. and this wonderful crew from Val d 'Osta in Italy came up and took me off the mountain to save my life. Am I right in thinking they wouldn't let your son watch one of these, one of the other climbers just turned your son's head away?

24:44Yeah, when we nearly went off the slope, he turned Harry's face away so he wouldn't see us fall off. It was that close. But why was this my defining moment? Well, I came back and I was smashed up and I was in hospital for a bit. then in a wheelchair and it gave me lots of time to think and and i was thinking you know i suppose having turned 50 about very much about the second half of my life and i decided i really wanted to live it purposefully and i wanted our business to make as big an impact as it could um and that's when we settled subsequently on improving lives through work as our purpose and then i've subsequently written a book about values-led um purpose-driven businesses called as you kindly mentioned karma capitalism yeah and i'm trying to encourage other companies who come philanthropy companies like us where 10 % or more of the shares are owned by a charity because that really helps give them a superpower I would say.

25:38The fragility of life, forget about business, forget about all the successes you've had and your father's had and the successes you want to pass on to the rest of your family. The fragility of life flashed before you at that moment and changed who you are as a person yeah i i think it did i've i've felt very lucky to be alive and and i still do because um it was very close and i suppose i had two near-death experiences within 24 hours and that i guess woke me up i called it my wake-up fool and it really was and so i i feel now i was i had lunch with stephan gap my openest friend and i said to me look quite smart i did paid by the way i did pay but i said to him i said to him and he looked quite surprised i said you know looking back i'm quite glad that happened now he looks a bit amazed but it did it changed me as a person it changed the way i think and it changed my priorities and i i'm grateful for that and your wife banned you from mountain climbing i presume yeah no i'm not allowed to go mountain club no no she didn't ban me that's unfair on nicola so i promised her i wouldn't do it again and poor nicola was sort of pushing me around in a wheelchair and she was incredibly kind to me And we do have six children, so it's a pretty irresponsible thing to do.

26:54Well, I was going to say.