Gary Hoffman, Chief Executive, Northern Rock
Gary Hoffman took over as chief executive of Northern Rock days before the collapse of Lehman Brothers shook the banking world to its core. In an exclusive interview, he tells Andrew Hebden how he has steered the Newcastle bank back to stability - and the brink of a sale.
LIKE virtually all of his colleagues at Northern Rock House, Gary Hoffman vividly recalls the events of September 14, 2007. Unlike most of them, however, he wasn’t working for Northern Rock on that Friday morning when queues of anxious depositors formed outside the bank’s branches.
Instead, he was taking part in a "return to the shop floor" programme for Barclays executives and had been dispatched to the Moorgate branch in London, where a crowd had gathered at a nearby Northern Rock branch.
"There was a huge queue down the road and I went and stood in the queue rather than go to my role for the day as a cashier at Barclays," Hoffman recalls.
"It was a long queue but what the people were saying was: ‘We like the people inside Northern Rock, we don’t want to take our money out, but we’ve heard Robert Peston on the radio, we’ve heard Sky News, we’ve read it in the paper, it is our life savings, we’ve got no choice, we can’t risk it. But one day I would like to put my money back here if I can.’"
Hoffman was as struck that day by the loyalty of the customers as he was by the cool-headed staff who were doing a "fantastic job" calming worried customers down.
For a banker who had spent much of his career extolling the virtues of great customer service, here was a brilliant example of it – just as the bank’s staff faced their darkest hour.
Little did Hoffman know that, just over 12 months later, he would be in charge of the Rock, which had become the first victim of a run on a British bank for a century.
Hoffman, a private man who rarely does Press interviews, is most at ease when talking about his "colleagues". It’s a term which can conjure up images of smiling supermarket workers complete with "happy to help" badges, but Hoffman is not spouting empty rhetoric.
Team spirit is not just an important ingredient in the Northern Rock story of the last 18 months – as far as he’s concerned it’s been its lifeblood.
"I think one of the reasons why Northern Rock has survived and the brand has proved resilient is because the people are very resilient," he says, a theme he echoes throughout our meeting.
"Whatever position I am in, I’ve always talked to customers most days, picked up complaints most days and talked to colleagues every day. The first session I had this morning was to talk to a group of colleagues that we have working on problems we have got with car parking."
Whilst he confesses the chief executive should have bigger issues on his plate than why his staff struggle to find somewhere to park, he insists he needs to "understand how colleagues are feeling". And breaking down barriers between the boardroom and the rest of the workforce in the sprawling Gosforth offices is something he’s been keen to achieve from day one.
"The first thing I saw when I arrived here was a sign saying ‘do not walk across the executive car park’," he recalls. "I saw that as symbolic of hierarchy and a lack of connection between leaders and the people that they are leading."
In contrast, today the most noticeable signs scattered about the Rock HQ are posters calling on employees to nominate a colleague – or "Rock Star" – for a company award.
It is the kind of initiative you might expect from someone who was the first person in Barclays to have "sales" in his title as part of an experiment.
It proved successful and after spells running the bank’s systems, he established Barclays phone banking (including setting up a call centre in Sunderland), built internet banking, then added branches, technology and marketing to his ever-widening remit before becoming chief executive of the firm’s retail banking business.
He went on to head up Barclaycard, where he signed the deal to become sponsor of the FA Premier League. For the huge football fan – he is vice-chairman of hometown club Coventry City – it was to prove a bittersweet moment.
"I signed the deal to sponsor the Premier League the weekend that Coventry were relegated from it," he recalls.
"It broke my heart putting pen to paper on the deal knowing that Coventry would not be in the Premier League and that they might never return.
"The day they were relegated, which was Aston Villa away to make it worse, I took my six-week-old because I had only ever seen Coventry play outside the top flight once, which was in 1966 when they were promoted. I thought that he might only ever see Coventry in the Premier League once."
It might prove to be true. Nine years on, and Coventry have yet to win promotion back to the top flight, not that a lack of success has diminished Hoffman’s willingness to travel the country watching his beloved team.
Hoffman is in no doubt that football sponsorship can make good commercial sense, as he demonstrated last month when he renewed the Rock’s shirt sponsorship deal with Newcastle United. The deal, which could be worth up to £10m, was predictably controversial, but Hoffman is adamant it was the right thing to do.
"I think done well (sponsorship) is an important part of the marketing mix. But in order to do it well you have to choose something that aligns with what your business wants to achieve and you have to put your name to it.
"You need either naming rights or your name closely associated with it. So Barclays Premier League works, Northern Rock on Newcastle works, but who sponsors the Olympics? People spend tens of millions sponsoring the Olympics, but no one knows who it is. So what’s the point?"