Page 12 - Stakis Consolidated Teaching Note

Summary Notes for Stakis

• Rio Stakis due to retire and instead of picking a successor from the current
board who had up to 15 years experience, Andros was appointed CEO.
Andros was younger, and despite having experience from the US was
considered lacking experience for the position.
• The city and the board were very concerned. (Point of reference for Argenti’s
model comparing family business with professional management? ALSO
compare board in 1989 and 1993)
• There was a culture change on the board.
• Within 18 months Andros had lost Stakis £47m. Stakis was facing
foreclosure by the banks. Stakis family bought 4% of shares, (paying a
premium price) borrowing extensively.
• Does Andros have the right qualities for a leader? (refer to Margerison who
identified characteristics of a British manager)
• Sir Lewis Robertson was brought in as chairman by recommendation from
the board and with the banks’ approval. Andros “resigned”.

Robertson:
• Wanted 100% control
• Is a “fixer” / company doctor
• Stopped the haemorrhaging.
• Excellent short-term strategist, can identify strategy and pick the right
person to drive it (in this case David Michels CEO)

• Brought passion back to group (with Michels too)

Lewis’s turnaround strategy :
• Based on improving cash flow.
• Keep banks, city and shareholders happy

Michels:
• Hotel leisure industry experience
• Autocratic through cost control then democratic after turnaround
• Profitability leads to performance related pay

General points:

• Define characteristics of CEO and the leadership requirements.
• Look at the Stakis product portfolio – BCG, Ansoff, 5 forces, pest, space
rd
• Look at Possner’s 3 Generation Mgt Theory – compare Andros and Rio,
noting the different mindsets between father and offspring.