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Peter Walker

  • Programme: Senior Executive Programme
  • Nationality: British

Business insights that have lasted a lifetime

Power cuts. Housing market collapses. Recession. Peter Walker’s business career straddled good times and bad. Two of the constants have been provided by his training at London Business School and his love of Port Vale Football Club.

Peter Walker’s 32-year career coincided with volatile labour relations and tough economic times. Yet he steered the UK manufacturer of domestic appliances, Creda, through years of growth and a takeover by the conglomerate GEC, retiring as managing director in 1994.

The Creda brand, now owned by US company Whirlpool, played a proud part in British industry, employing 5,500 people at factories in Stoke-on-Trent in the north of England, and Yate, near Bristol.

Today Walker, lives in Stoke where he was born, brought up and fell in love with Port Vale Football Club. Coincidentally, though he joined Tube Investments (later TI Group) as a graduate trainee after graduating from the London School of Economics. The company posted him to its Creda business for his first appointment – which was based in his home town.

The next wave of British bosses

Walker was marketing manager for Creda when the company sent him on the Senior Executive Programme (SEP) at London Business School (LBS) in 1971. It was the sixth time the programme had run so Walker was one of the early band of British managers who LBS was aiming to influence to boost professionalism in UK management.

It helped that the chairman of Creda’s parent company was Lord Plowden, who was also then chairman of LBS’s Governing Body, as Walker’s immediate boss typified the view of business education at the time. “He told me it was a ridiculous amount of money – I think it was about £400 – and that I couldn’t just go gallivanting off,” says Walker.

The same boss insisted on a full report when Walker returned to work. “I think I convinced him 75% that the programme was worthwhile,” remembers Walker. “And 18 months later, of course, he did promote me to marketing director even though there were plenty of other people going for the job.”

Power cuts

Walker says the SEP armed him with “an insight into the mechanics of how businesses operate within the economy of the nation”, which was invaluable at that time. With inflation high, the government capped pay rises for public sector workers, including coal miners who were providing most of the country’s fuel for electricity generation. The miners went on strike and to conserve electricity for the nation, the Conservative government introduced the “Three-Day Week” in January 1974, which limited commercial electricity users to three days of consumption each week.

“We were suddenly faced with a situation where we had an overhead designed for a five day production output and sale, but we weren’t allowed to operate that way,” says Walker. “We assumed we couldn’t maintain our sales so we started laying people off and contracting our overheads, but as it turned out we didn’t need to.

“We actually made more products in those three days than we usually did in five because all the assembly workers were on piecework for payment and they were desperate not to lose any money.” Piecework payment systems are no longer fashionable, but in those unusual circumstances it clearly had a remarkable impact on labour productivity.

Electricity supplies returned to normal in March 1974 and Creda had weathered the storm.

Successful integration

As marketing director Walker was at the heart of the consumer appliance company, whose products were hugely popular in Britain and marketed as cutting-edge technology.

He says a key to the business’s success was that there were close contacts between the departmental heads – although that was supported in ways that might not be approved of today. “We had a directors’ dining room so we ate separately from everyone else,” says Walker. “And I know that would be considered appalling now. But it meant we had 10 departmental heads – the directors of design, manufacturing, finance, marketing, sales, after-sales service and so on – who were having a mini board meeting every day over lunch. So there was tremendous integration between the functions; we were talking all the time and that went straight down into each of those departments.”

Walker moved up through the ranks to deputy managing director and when TI Group sold the company to GEC, he was sent to London to receive the £127 million cheque.

Rising to the top

Soon after the sale, Creda’s managing director left and Walker went to GEC’s group managing director and told him he wanted the job. “As marketing director I had virtually run the business for two years under the last MD,” he says. “Our management team had taken it from a turnover of £12 million to £200 million. Profit had gone up proportionately. We were making a better return on capital than almost any appliance company in Europe at that time. And I felt I had the confidence to say I wanted that top job.”

So by 1988 Walker had risen to managing director after starting as a graduate trainee at the company in 1961. His in-depth knowledge of the company, rooted in his cross-functional traineeship, stood him in good stead when events took a dramatic turn.

Recession hits

UK Chancellor of the Exchequer Nigel Lawson announced in March that year that Multiple Mortgage Tax Relief for unmarried couples would end in August. House prices soared as buyers acted to beat the deadline, triggering inflation and a housing market collapse.

This was bad news for Creda, which sold 85% of its goods in the UK and was closely linked to the housing market. “One third of all white goods are sold to people moving house and one third to people buying a house for the first time,” explains Walker. “So we were faced with an absolutely traumatic change in our business.

“I remember that one of the worst points of my whole career was laying off about a thousand people just before Christmas in 1989. Many of them were temporary workers and within 12 months we had taken most of them back on again, but it was a horrendous crash in the 1990s.”

Planning for change

Companies can’t predict every external event, though Walker had his LBS training to fall back on and remembers the words of his “very impressive” lecturers Terry Burns (now Lord Burns) and Sir Jim Ball, saying: “Assume there will be significant change and plan for the possibilities. That way you don’t just plan for maximum sales.

“People often overshoot on their overheads because of over-optimism about future sales. But LBS also gives you the cautionary tales of what businesses have tried before.”

When GEC went on to sell half of Creda to GE, Walker found the 50/50 joint control difficult to work with. He left with two other directors in 1994 at the age of 56 after 32 years at the company.

Backing the “Valiants”

Colleagues have teased that his longevity at the company was due to its proximity to Walker’s beloved football club, Port Vale. But while he was tempted by other job offers, Walker says he was always content at Creda despite the hard work. “I can remember the good times but I was also working ridiculous hours – 60 to 70 hours a week was routine,” he adds.

After a couple of years in consultancy Walker bought an engineering company in Sheffield, which he sold back to management after four years. He then became chairman of an engineering company in Mexborough before retiring at 65.

He says he still enjoys watching Port Vale, despite what he describes as their “modest performance”, and has successfully persuaded his son and grandson to support them as well.


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For 50 years, Executive Education at London Business School has been a trailblazer, guiding executives who take our programmes.