How the Soft Determines the Hard

What really makes the difference when leadership gets difficult?

Not when the plan is working. Not when the numbers look good. But when the pressure rises, the situation is unclear, and other people are looking to you for direction.

Peter Davies has spent decades in senior leadership roles across DHL, SN Brussels Airlines, Air Malta and other complex organisations. Looking back, he has come to a conclusion that challenges the way many leaders think about performance:

The soft determines the hard

In this episode of Leading People, Gerry Murray explores what Peter has learned about leading people when judgement matters, trust is tested, and easy answers are in short supply.

It’s a conversation shaped by experience rather than theory, with stories from a career spent making difficult calls, leading through change and working across very different cultures.

And as AI becomes more embedded in the way organisations operate, one question becomes even more important:

What should leaders be careful not to lose?

If you lead people, influence decisions or carry responsibility when the answer isn’t obvious, this episode is for you.

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Transcript

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Welcome And The Big Premise

SPEAKER_01 0:00

Welcome to Leading People with me, Jerry Murray. This is the podcast for HR leaders, LD professionals, and senior leaders who want to bring out the best in themselves and the people around them. Every other week I sit down with leading authors, researchers, and practitioners for deep, honest conversations about what great leadership actually looks like in practice. And how your own mindset, behavior, and presence shape everything around you. If you want thinking that challenges you, tools you can use, and conversations worth returning to, you're in the right place.

SPEAKER_00 0:49

But the point is that if you haven't got the soft skills in terms of leadership, managing people, creating the right environment in which they can work to the best of their ability, all the sophisticated technology and spreadsheets and all that stuff is meaningless. So I've concentrated most of my life on those softer skills.

SPEAKER_01 1:10

What really determines whether a leader succeeds? We tend to spend a lot of time talking about strategy, technology, systems, financial performance, and execution. My guest today, Peter Davies, has spent decades leading organizations where all of those things mattered enormously. He was a senior leader with DHL, later COO of SM Brussels Airlines, CEO of Air Malta, and has led and advised organizations through some extremely challenging situations around the world. But looking back across that career, Peter has reached a rather interesting conclusion. The soft determines the hard. In this conversation, we explore what that actually means. We talk about curiosity, judgment, and communication, how you surround yourself with people who may be better than you, what real empowerment looks like, and how leaders create an environment where people are willing to tell them what they actually need to hear. Peter also shares some wonderful stories from DHL, Air Malta, and the turnaround of SN Brussels Airlines. Before we explore what all of this might mean for leadership in an increasingly AI-enabled world. So let's listen to what Peter has to say. Peter Davies, welcome to Leading People.

SPEAKER_00 2:38

Thank you, Jerry. Very kind of you to invite me. We go back a long way, and I'm sure we've got lots of interesting stories to talk about. But um, yeah, great to be here. Looking forward to the chat.

SPEAKER_01 2:50

So going back a long way, let's not reveal too much about that, otherwise people might start calculating our age. Um but before we get into the nuts and bolts of leadership, uh, which is really what I uh invited you on because I've been watching some of the stuff you've been uh writing about recently. Uh please share with my listeners the journey that led you to becoming a CEO. And were there any like epiphany moments along the way that stood out for you and you would look back on now uh uh you know after a quite a distinguished career and say, oh, those were turning points for me?

Formative Years And Early Responsibility

SPEAKER_00 3:22

That's a great question. I I uh it goes back to uh to my youth, my formative years, uh, not so much from an educational perspective, but I I was born out of a military and a farming family on both sides. And um these individuals, both uh maternal and paternal, were very uh constructional, very practical, pragmatic individuals because they had to be. That was a life that they had led. And um my uncles and great uncles, of which I had quite a large family, uh enabled me, not that they taught me anything per se, but they I was in an environment, and I use that uh that expression quite a lot, which allowed me to uh not intellectually understand what they were talking about, but just to witness and feel areas of responsibility, judgment, and the sort of things that make people uh ensure that something is done. Um I had lots of issues, lots of, but they never talked about the issues per se. They said, well, okay, we've got a problem, we've got to fix it. Uh and um I I learned a lot, I think, uh intuitively from uh from that type of environment. And uh that that was from a very young age, when I was three or four. My grandfather, paternal grandfather, was uh on the uh he was a farmer, and part of what he did was to cut the grass at Stanisley Airport and turn it into chicken feed. And many a time I'd be out on the tractor in the uh brilliant, bright sunshine, no safety harness, um poodling around talking to my uncle or uncles. And and I think at that point I I began to understand that perhaps there was more to life simply than um eating jam bree bags and um and cubes of spangles. Uh but so it was very important for me looking back. I didn't realise it at the time, and I think probably a lot of people um who get to uh at my age uh tend to forget what their formative years are. So with my children and my grandchildren, I try to make sure that I encourage them to uh endure and uh uh enjoy as many things as as possible. So I think that was a solid grounding for me. My educational uh status wasn't brilliant, to be honest with you. I'm I'm slightly dyslexic. Uh I don't see that as an excuse. I certainly turned it to my advantage uh in the end. But uh military and particularly flying, my father was a bomber pilot, and I had uh grandfather in the First World War. So that ran through the uh family, and I lived near Heathrow Airport and uh visiting Stanford Airport. So aviation was uh simply running through my my veins.

From Aviation Dreams To Logistics

SPEAKER_00 6:06

So um went through school, applied for the Royal Air Force uh as a pilot, got turned down as a pilot. Um I said, Well, son, uh we'll we we can't accept you as a pilot, but we'll accept you as an RAF officer. Uh and I said, Why not a pilot? He said, You're too tall. And uh in in those days, uh, if you had to bang out, as they call it, uh from a jet uh provost, uh I'd lose my knees. And I remember saying, Well, I don't really care, sir. And he said, Well, her magic does. All right. So at 17 and a half, that sort of put me in my place. So from there I went to do private private flying, um, did all sorts of things around the world, uh flying aeroplanes, but uh realized that uh A, that was pretty dangerous, some of the stuff I was doing. I didn't particularly want to become a civil pilot. So uh I went to Heathrow, joined a management trainee company with an import-export business, and uh and learnt um uh how to uh muster through the bureaucracy of uh of making sure that imports and exports were correctly done for this country. And again, in in that situation, I I learnt a lot from my um my uh governors uh in terms of you know if something needs to be done, you've got to get it done. And and I was there for both in my family life and in my early business career, if you can call it that, was encouraged to be independent. And uh sure there were boundaries, of course, but those boundaries were quite wide, um, both in in family and in business. So I I began to establish in my mind a sense of uh of independence and an understanding of when you allow people to operate without fear, then um some of the good comes to the top.

SPEAKER_01 8:01

Yeah. It's interesting you you you uh studied the import went into import-export. Uh I actually studied export management way back just as the Ireland was preparing to to try and find its place in it was a member of what was called in those days the European Economic Community, but the whole idea of opening up the market was take just starting to emerge. And Ireland was still uh economically not a very um robust or stable country. And they were sending graduates on export marketing programs around the world, and I actually first time I came to Belgium, I studied export marketing, which then led to probably something that happened to you, which is you end up in a world of DHL, I guess, as a result of understanding how trade flows, basically. Or am I or am I jumping ahead?

SPEAKER_00 8:50

No, no, no. There was a few things in between, but uh essentially you're right. And I I found transportation very dynamic, I'd always has been as a kid. Uh so I I loved uh you know the spell of uh of um of uh of um carouseling. I perhaps shouldn't in this modern day say that, but anyway, that's a fact of life when I was younger. Um and then it it this a dynamism of transportation, both uh whatever forms of of transportation. It's always moving, never you're always traveling, never arriving. That's always been a one of my mantras in management. Uh, you're never satisfied. So I always enjoyed that type of environment. So I work in the Heathrow, and then I was promoted to understand the ship inside. I went into Ledenhall Street, which was uh, you know, uh it wasn't particularly exciting, but certainly gave me a great ground and met lots of lovely people uh in the city and experienced the commuter train from Hampton in Middlesex where I lived with my parents. Um so uh I went through that whole uh process of of understanding the relevance of uh of transportation. Uh so therefore I was always gonna stay certainly in aviation, which allowed me, even though I couldn't fly aeroplanes for the Royal Air Force, I could fly aeroplanes otherwise. And uh I just uh stuck in that area and and worked through a series of uh opportunities and um found myself uh in um what was then the uh overnight business. I was uh working for a company called Greenwood Transport who wanted to expand their operations in the late 70s, early 80s. And uh there was a company called Intercounty Express uh based in Ramsbottom, which uh operated a 48-hour job service. And I had this idea that we, the country, amongst other people, not just me, I hastened to add, I thought the 24-hour service was uh was the appropriate way to go. So I tried to encourage um uh uh the consolidated goldfield was a company who owned uh um Greenwoods. I sat on the board of Greenwoods and uh managed to convince them that perhaps we should look at the buying this company. Anyway, uh unbeknown to me, uh a famous uh individual in New Zealand called Don Dick of TNT beat us to it, bought into County Express. Uh, having failed with a company called Quick As Air some two or three years before, and then launched TNT, I was invited to come as their marketing director, and we launched the first Overnight Express parcels in the United Kingdom under TNT, which is great fun. And then uh I moved on to a company called IPEC, another Australian company that wanted to launch uh the first overnight service in Europe, uh, which we did, and that was equally exciting. So my my trip towards DHL was was grounded in uh initially road transportation. Then I was um uh before DHL, I was invited to uh to join XP Express Parcels, which was a subsidiary of KLM, and I did that for uh for eight years, and again that was about overnight uh uh express parcels. DHL in those days was only concentrating on uh on documents only. And uh I was brought in uh along with a few other people to run the as management director in the United Kingdom in the late 80s to uh uh help uh the process of moving DHL away from documents because of the fax machines and all sorts of other technology into uh the passwords air fight

DHL Lessons On Trust And Autonomy

SPEAKER_00 12:23

business. So that's how I got into uh into DHL. Now I've never looked back.

SPEAKER_01 12:29

No, you have to look forward in DHL because you've got to know where the package is going, right? Um so um yeah, that was around the time of the single market becoming what was it, early 90s, and and I I must say we we can reflect back on DHL got these sort of leg ups every so often where uh something happened in the the the context of trade and the company, as you say, you were in there now looking at how to um prepare for the ability to move small packages around in those days. Um and uh this was around the time I joined '93 I joined, and uh it was a fascinating, fascinating world because um you literally had nothing happened in DHL without going from one part of the world to the other. Everything had to be interconnected, and and as a young guy, it was like, whoa, this is this is the coolest place you could be. Like you're looking at a map of the world every day, and it's not just a map on your wall, it's a map that lives in the morning. You're talking to Asia, because I was in the world headquarters at the time, and in the during the day, you're talking to mainland Europe and uh I Middle East Africa, and then the afternoon you were postponing your evening by talking to to the Americas, and uh it it was just all joined up, and it was like just so um so fascinating. So then after you ran the UK for quite some years, and then I think you went, did you go to Latin America, was it, or did you go somewhere else?

SPEAKER_00 13:51

No, I ran in the UK for for four years. Just picking up on your point about DHL, uh it was fascinating from my perspective because as I said in my formative years, and in due indeed during most of my career to that point, uh I was uh as a managing director or as a marketing director allowed uh huge amounts of independence and and um um freedom to to get on and deliver what was required of me and the company and the and the team. And DHL uh exonerated that. I mean, it was unbelievable that he got this world operation. I think in those days were probably around about 190, 195 countries, um, yeah, thousands of people. I always felt that we had an obligation, this is what I pointed out to the team continually, to uh to deliver on behalf of our uh uh friends overseas on their on their export customers. And uh again, DHL at that point uh gave huge amounts of independence uh to the management team in each of the countries. And it was quite astounding that how this this this I wouldn't say loosely connected, but if you imagine it's like a train, but each individual coach had it had its own purpose and direction. That sounds a strange analogy, but uh it was true, it was true.

SPEAKER_01 15:11

It was almost like cobbled together, but it sort of worked. Um it was fascinating to be be in the center because everybody ran the operation kind of differently, and yet it was all joined up somehow, and customers got great uh service. And if they didn't, DHL was incredibly responsive and believed passionately that customers came first and and and employees very much on a par because if you didn't have the the quality in your employees, you could never deliver for your customers. So it was a pretty pretty strong equation they ran, right?

SPEAKER_00 15:45

That's true. But but interesting you say that because uh uh in all my career um uh and certainly uh enforced during my XP and KLN days was the fact that there are three groups of people that you've got to be responsible for. Uh, in order of priority is your staff. Secondly, close second are your customers, and a long way third are your shareholders. Now, when I presented that to pools and governments and airlines I've been responsible for turnarounds, they they go aghast. Well, are you not interested in the shareholders? Well, of course I am, but you you need to make sure that the first two groups are functioning properly, because if not, then the shareholders are going to get nothing, other than perhaps a short-term gain, which I don't necessarily believe in. So it was always staff, and that's what we did at uh, and DHL had done that anyway. Uh I I simply enforced that and and extended it. Now, one example, for example, when I joined about three or four months after I joined uh the organization, uh, they had recently gone through a substantial price change, which hadn't gone down particularly well in the United Kingdom. And uh I wanted to change it quite drastically. And uh I remember giving a presentation to Dave Allen, who was then uh, unless no longer with us, uh, was chairman uh and my specific chairman for the UK, Pat Lupo, who was a group CEO globally, and Rob Kuyper's the European CEO. And I presented to them in in Orbital Park, which you'll remember, uh, my my vision for a new rate card and um and rate principal. And this took about four hours. I had a couple of people with me, and uh and they said, yeah, go ahead. I mean, I just found that unbelievable. Here was the United Kingdom, probably the second biggest country then outside the United States in the network, having gone through one drastic change uh in terms of its price in um about a year before, well, six months before, got it wrong. Here comes this young whippersnapper uh who's going to suggest a change in supporting that. Now, I I can believe me, I walked away from that room, and of course the process worked, thank goodness. Um, but I I walked away from that with um supreme confidence that AI was in a company that trusted us uh as a team and um and B trusted me as an individual. So I remember that uh very vividly still today.

SPEAKER_01 18:05

He used the term young whippersnapper, but sure those guys were pretty young whippersnappers themselves. If I could at that time you were all equivalent, you're all sort of in your probably early 40s, and uh and um yeah, maybe maybe Rob and Dave might have been a little bit older, but now let's just get into a couple of questions here. I uh this is a great conversation, but in in the interest of of uh the listeners really getting under the hood of leadership here. So you've spent decades in senior leadership, as we've just covered, like there in the on our kind of preamble conversation. What have you come to believe about leadership that you would perhaps not have understood earlier in your career? We'll be right back after this short break.

Curiosity Communication Judgment Storytelling

SPEAKER_01 18:49

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SPEAKER_00 19:27

That's a great question. I I I I I would say that I wasn't uh I didn't understand in my younger days what leadership was, but I then realized that what I've been taught in my formative years with a strong family background, and I was blessed with great people uh who uh I worked with before. Um and and I and these these are the order in which I put them in. Uh first of all is curiosity. Uh you have to be absolutely curious and not just ask questions and hear, but you have to ask questions and listen. Um we've all experienced conversations at dinner parties or you know, meetings or whatever, and some asks you a question and you answer it, but they're not interested at all in what you have to say, they just pose in the next question. Um so that's important. Communication, clearly, uh both ways. I mean, it's fairly obvious, but it's surprising a number of people who don't do it. And out of that comes storytelling. Um you have to you have to tell a story to to uh to your staff, to the shareholders, to the board about what it is you're trying to achieve and and give them some vision. Not in an acetate block on your on your desk, you know, we should succeed or whatever the bloody thing is. Sorry. Um but but something that's meaningful. And uh and the last bit is judgment. Uh clearly you you have to have the sense of making sure that the decisions you make from a business point of view make sense. Um and in that respect, I've always employed people better than me uh to make sure that collectively the sum of the parts is greater than the whole. So that there are four key um issues, all of which, all of which I learnt um uh intuitively as a young boy. And um that that's led me to believe that that uh which is why I I'm I do a few blogs on on LinkedIn and I'm 600 words, I think you're limited to, and they'll lead to a book one day. But the book is in entitled The Soft Determines the Hard, which may be an interesting title. But the point is that if you haven't got the soft skills in terms of leadership, managing people, creating a right environment in which they can work to the best of their ability, all the sophisticated technology and spreadsheets and all that stuff is meaningless. So I've I've concentrated Most of my life on those softer skills. It may be because I haven't got the hard skills, I don't know. I don't think so. But I think that's a fundamentally important. And I've uh used that and I've employed those four elements. Now, streaking through that, you may have heard me say, um uh sorry, the I sometimes get the Mickey Tack out of me by talking about intellectual threading. And uh we certainly use that in the DHL days. And and the reason for that is that running through all those four elements is a thread of intuition and initiative. So you could you I don't I can't create a model out of that, uh, but certainly combining all those elements into into one thing um in terms of yeah, what is how does Peter Davis operate, uh that would be an answer to your question, hopefully.

SPEAKER_01 22:53

Yeah, uh I actually we should talk offline. There are some models out there that might um help um put this on paper, but apart from that, um you uh listening carefully to what you said, um, you you have just talked about surrounding yourself with people that are better than you.

Hiring For Chemistry And Real Delegation

SPEAKER_01 23:12

So, what does a leader actually have to do to make delegation and trust work? Rather than just saying simply like, oh, you're all empowered now. Like we get that a lot. You know, the guy stands up in front of 200 town hall and says, I have an announcement to make. From this day forward, you're all empowered. We are now an empowered company, and everybody's sitting there going, Yeah, come on, mate. So, what what actually make what what when the rubber hits the road or when the the plane lands? Because you talk about storytelling, and of course, metaphor is a brilliant part of storytelling, and I know you're very fond of the aviation stuff. So let's let's pack a lot of that into the answer now. So, what does the leader have to do now to really make this kind of notion of empowerment work? You get all these great people in a room. Obviously, that can create a certain dynamic. How do you get how do you orchestrate that?

SPEAKER_00 24:00

It's a three-dimensional model, I suppose, in as much that you've got to choose the right people. And I I've made mistakes, obviously, as we all do. Um, but nowadays, or in the last 20-odd years, since I've made some horrendous mistakes in employing certain C-level people, um, I never give them the benefit of the doubt. So I go through a lengthy process of making sure that uh not not that they're educationally qualified or you know they uh tick list and ticking boxes, all that sort of stuff. It you know, how do they relate uh from a chemistry point of view? How do they relate to the team? Uh the red arrows, I can give you a classic example. I involved myself the red arrows from a sponsorship point of view many years ago. We used them in DHL. In fact, my next blog is about uh how uh how I use them. And it's interesting because um Can I just stop you for a second?

SPEAKER_01 24:49

For for our non-UK listeners, the Red Arrows are a just explaining that RAF aerobatic team. Um so they fly these planes and do uh all sorts of brilliant. Yeah, the best sum in the world.

SPEAKER_00 25:00

Uh anyway, uh and the selection process, as you'd imagine, from a flying point of view, is quite severe. So they have to have so many hours, uh, they have to be a qualified flying instructor for the Royal Air Force, and uh they have to be they have had to be a frontline pilot, operational pilot. That's all well and good. Out of 50 applicants, uh each uh they get down to nine. Um and then the uh the the candidates come and fly uh with the red arrows at their base, and and that's all fine, uh or not as the case may be, may not be quite up to scratch, in which case they're they're left with about four or five. Those four or five, the most important part uh of the interview process is not so much in the cockpit but in the pub. Uh they want to know how how you know intuitively what's this guy like or what's this lady like, you go, and and they they weed a few people out because they're there for the wrong reasons. And I I I haven't done a similar process, although I have taken quite a few of my direct reports out for lunch and just try to get them involved in a different environment. And now again, this is not textbook, this is not um, I'm not responding from a human resources point of view, I'm just responding in terms of how I pick the right people. I've taken some time to find the right people. In DHL, we lost uh uh commercial director and our finance director for various reasons. And it took me about nine months to uh to look for both Stephen Day, who came in as finance director, and Peter Lomax as commercial director. And I was under quite pressure from pressure from Brussels saying, you've got to get these people on board. I said, no, I'm not gonna employ them until I find the right person. So on both occasions, it took me nine months, nine or ten months before I ran the found the right people. And um it it's an intuitive process that you go through the chemistry. They've obviously all proved themselves in terms of the CV, but you know, you spend probably five minutes on that. It's what have you done? And critically, how did you do that? And we listen to politicians today say we've got this problem, that problem. Yeah, we everyone knows what the bloody problems are. Um, what I'm waiting to hear is the solution. So in my interview process, I put them under quite severe, but significant pressure to make sure that I needle out the uh the answer I'm looking for or the answer they're willing to give. And a lot of people haven't crossed that threshold because it's full of uh, well, I did this. But actually, what were you responsible for? So I think an intense um uh one-on-one uh interview process is vitally important to find the right people. Secondly, and within that, the three three-dimensional element is is how do they work with other people? Are they going to fit into the team? Uh, and uh that's an important. So again, we go through, I have gone through that process to make sure that my colleagues felt comfortable with this individual. And on occasions they they didn't feel comfortable, in which case we can go ahead. So it it's a it's a question of trying to approach it from different perspectives rather than singly, you know, this is the process I've used. I tend to make sure that we employ people from all walks of life and interview them in all walks of all different ways. What I jokingly said in well, jokingly, I was half joking to be honest with you, uh Jerry. I did one of my blogs recently, I said, um, you know, in future, if I was a young CEO again, then uh uh or younger, then uh I would simply uh follow them in a car from London to Bristol on the motorway. I think motorway driving uh tells you an awful lot about the uh the capabilities or lack of the people in terms of uh of uh uh how the how they react. It's interesting.

SPEAKER_01 28:52

And what was the third dimension? Peter, what was the third dimension? You you talked about the first dimension, like the the the toughness of the interview, and then the does the team did you do the do the team feel that this person's going to be an integral part? And and you've used that.

SPEAKER_00 29:06

What was the third dimension to your the third is is uh two two twofold actually. One is are they able within their own team to create an environment uh where they allow their people to work to the best of their ability? And and uh underlining all three dimensions is are they capable of actually physically doing the job? Um I mean that that and that comes back to the original uh ticking boxes to make sure that they were suitably qualified and had a relevant experience. But it's not until you start talking to people um and understanding how they manage people. Um and you you people who don't often, in my experience, don't ask, don't sorry, don't get asked that question. Um so they're the three elements which I think are are fundamentally important. And I've used them um yeah through most of my uh middle later career.

SPEAKER_01 29:59

So that's great advice for anybody out there who's at any stage in their leadership or management career to to to take on board those uh three elements. Um you I've got a as you imagine, I've got several questions I pre-prepared for this, but I I want there's one here that's jumping off the page at me. Keep saying, ask me, ask me, ask, ask him this one. And and it kind of segues into what you just said.

Getting The Truth Upwards

SPEAKER_01 30:23

So, how do you create a culture where the people will tell the leader what the leader really needs to hear, especially and sometimes when the news is uncomfortable? So you talk about these people, if you you bring in like uh some of the guys you just mentioned, I know, and you know, then you get them in situ, the the colleagues like them. Now they've got this team that they're able to hopefully motivate in that. But you know, when the SH1T hits the fan and tough news has to be communicated upwards, it it is often some cultures it doesn't get there, and sometimes it needs to get there. So, how do you create that that environment where that you talked about environment earlier, how do you create the environment or culture where that can happen?

SPEAKER_00 31:07

I it comes back to my foreprint of curiosity and communication and storytelling. One of the things I've always done uh for the last 40 odd years is to have as many meetings as possible uh where I can communicate directly to a workforce, either in a minor group or a big group or whatever. I mean, DHL in uh early uh uh uh late uh middle 90s, uh we held a series of national conferences where you know, including as many couriers as we could get. We had two and a half thousand people in the Wembley Conference Center. And the whole purpose was to enjoy themselves. We had Noel Emmons doing all sorts of funny tricks. He was regular on PPC at that point, um, and and talk about the serious elements of what we were trying to do as a business so people understood in the in the space of six hours and we gave them a good meal. Um it was always just talking to people. Uh it's interesting. I gave a speech uh some while ago to a bunch of PR people in uh in London, about 400 of them, and um I talked about leadership, and one of them said, Well, what do you do? You know, and I said, What do you mean, what do I do? And he said, Well, how do you get time to go around talking to people? And and I wasn't being funny, I said, Well, what do you mean? I said, Ah, you imagine that I'm in my office, like a lots of piles of files of lawyers and phones and meetings going on and all this sort of stuff. Yes, I said, No, I don't do any of that. Um, I'm probably in my office about globally 30% of my time. The rest of the time I'm traveling, talking to people, understanding what their uh wishes are. So you you set a stall out um based on a personality, if you like. Um I happen to be Peter Davis, uh, good or bad, that's me. And I listened to people, I'm I'm curious. I'm one example, I mean, Air Malta, when I was running Air Malta, uh the ramp workers uh had the most awful restroom uh below the terminal. It was disgusting. And and because they they treated it uh in such a way because no one could be bothered. I went down there, first time any CEO had been into the restroom, but it's a classic example. And it was it was I went, well, you can imagine uh the words I would want to use. In those situations, I always checked the ladies taught it first, with permission, uh, because if the ladies taught it as bad as the men's or worse, then that tells me something about the uh degradation of the of the premises. Anyway, to cut a long story short, it was appalling. And I spoke to the guys, and they're all you know, Montese, you know, dial-in-the-wall, uh ramp workers, great guys. And um, so to cut a long story short, I said, look, we we're gonna this is unacceptable. Uh so he put, I don't know, 50,000 euros in the yeah, the building belonged to the airport, so they put another 50,000 in, took two or three weeks, and we got it uh into a decent, repainted it, put proper lockers in, did the toilets up, put the pinball machine in, and all that sort of stuff. And they loved it to the point that the cargo department, which was about half a mile away, rang me up and said, uh, or when I was down there, they said, Look, we know what you did for the restroom, and we know that you've got limited money, but if you buy the paint, we'll paint our own uh offices. I mean, uh, yeah, and to the unions and and indeed to the ministers and my board, this is unbelievable. I wasn't being particularly clever, I was just talking to people. Uh so you can't do it in five minutes. Um, but you set it, you create an environment where you've got to be visible, preferably more often than not in person, uh, get off your backside and go and travel. And and people say, Well, what do you do for a living? Well, I run a successful airline. So that that's uh that's a brief answer, but uh it's about listening, getting out, being curious, asking questions, and and yes, I I've had to stand in front of town hall meetings in uh Trinidad, for example, when we we had to reduce the workforce substantially, and and all the people that were in front of me, uh I don't know, uh 800 Trinidadanians, half of which are gonna lose their jobs. Um and I told them that. I was brutally honest. Uh but yeah, we made sure that the package was uh was the best we could off the government, um, because those were in peep those people were important to us until such time that we transferred. And then they even were becoming important because the message they would give that uh B We or Caribbean Airlines, as it turned into, uh, would look after its people. So it comes back, putting people first, uh expression, but people, customers, shareholders.

Airline Turnaround With Better Management

SPEAKER_01 35:43

So if if we if we take that sort of period between when you decided to leave DHL and you ended up, of course, in other airlines like Air Moultra and that, there was this interesting challenge you took on with uh Rob Kuipers at the time, and that was to because it was a multidimensional challenge. You'd just had uh 9-11, and uh one of the first casualties of 9-11 was was the national airline in Belgium called Sabina at the time. Um there was a consortium of people decided that this was not acceptable from a national identity point of view, and a bunch of successful business people got together, I think, and they decided to see if they could get this back on the road again. And so you that must have been I'm curious because people might find themselves in these channels. So you go you go in now to an organization which has a very old-fashioned established culture, right? Traditional but very entrenched uh airline, and you and Rob have to create now a dynamic and a dynamism in a world of you know budget airlines like Ryanair and EasyJet, etc. And you still have to find that balancing ground. You have to keep the people on side because you can't afford to lose the talent. And and you there was a risk you'd already lost them because the the the airline had been closed for the pay. So tell us tell us what what was that like from walking in the door? Because you told me before we came on air that you thought this was going, you you you looked at this as a as a as a welcome challenge, it was something you were up for. So tell us a bit about how you went about and maybe sometimes share if there were some without obviously incriminating yourself in any way, but what sort of like learnings or failures or mistakes that you you learn from? You said, Man, I thought that would work, but it didn't work with but then I learned something very important.

SPEAKER_00 37:31

Well, I I I I went into the yeah, you described it well. I mean, I went into the job uh clearly open-minded and and with all that wealth of experience and uh uh uh leadership, whatever skills I have, uh, behind me. And yeah, there's two and a half thousand people there who were by then flying 56 aeroplanes. And uh cash was trading quite quickly. I came in a couple of months after S in Brussels was launched. And um I I just again went through the process of talking to people. Uh I found most of the people, uh, if not all the people, uh one or two exceptions, pretty good, very knowledgeable. The the issue I found pretty quickly, um, and I talk about this when I people say to me, What do I typically find when you're going to a company? They're all the same. Uh, yeah, poor management, uh, not poor management skills, but simply poor management, because they'd never been led. And these people were intuitively clever. They understood the airline business, they had been running subpoena for many years, but they had never been allowed to manage. Uh their roles under, you know, the government airline, their roles under some sort of political or or civil service bureaucracy. Um, you know, you had to buy this aeroplane or that airplane. They were allowed, they were never allowed to manage uh their own business. And it became very apparent uh that these people were more than capable of running them. And one of the interesting things that hit me quite hard initially, and I found this in many companies, is that they never blame themselves. They always say, Oh, it's the competition, or it's the government, or it's the unions, or whatever. And I said, Well, I don't believe that. They've probably added to the complication, sure. Um, but yeah, the biggest competitor to you is you. And and this has never been said to them before. So I was quite hard-hitting. And to prove the point, they were all saying that Ryanair was uh, oh, disaster, taking all our traffic away, and this is the reason why we failed at Subino. That was rubbish. Uh Ryanair had two aircraft, two 737s at Charlotte. I commissioned Bain to do a survey in terms of I intuitively felt that these people were being invited to fly for the first time at five euros. I mean, ridiculous fares, but that's Ryanair model quite successfully. And uh so I asked Bain one simple question. You know, how many of all those people who fly with Ryanair, how many have flown before? And and it transpired that only 70 76% of the people flying on Ryanair in those days had never flown before. So I just went back to my staff and said, Look, thank Ryanair. They may have a different price, a different product strategy. Now, 80 kilometers south of Brussels, so we've got certain advantages here. They are creating the market for us. Um, so they they they they suddenly oh, yeah. Because someone said to them, I've got belief in you, I think you're capable of doing the job, but we just need to do the job slightly differently. The other thing I would say, which was we also introduced this in DHL UK, coming back to your point about how do you create the environment where people can start to manage their own business. Uh, DHL in the UK had no P ⁇ Ls at station level, and the PL in uh Sabina Brussels Airlines was such that uh they really only knew their results about two or three months after the event. You can't run a business if if you're you know what did you do today, you find out in in three months' time. Go a long story short, I I commissioned a French professor just to go through the model for me to establish to within 5%. I'm a great believer in uh sometimes it's better to be a proxy right than exactly wrong. Not when you find an aeroplane, I admit, but certainly running businesses. And uh he did this after two or three months. And we calculated of the 83 routes, only two were green. Green meant that it was paying for itself, it was paying for its fuel, and it was making a contribution to overheads. The other one was Geneva and the other one was Strasbourg. The another 40 fell into the orange amber, which was it paid for itself, paid for the fuel, but made no contribution, and the reds were all just complete losses. So we simply set about, okay, guys, uh, I bought the right commercial directory to lead that process. Um, how can we uh you know convert the red to amber and amber to green? And after 18 months, uh SN Brussels Airlines made a profit for the first time in 20 odd years. So uh that was because of getting people to open their eyes, realize that one trusted them, realize they had the experience far better than me. I mean, revenue management is is a is an art that I don't really understand, science as well, but I don't understand it, but I know what I'm trying to achieve. Um so it does answer your question. I it it's uh again, it's a whole series of things. You you have to have a palette, you have to be an artist, and in that respect, I consider myself to be an actor, to be honest with you. Um yeah, I I I have to act on stage. I I can't it's not that I don't believe in what I'm saying or the script's written for me, it's my script, but uh I I think you have to portray yourself in such a way that people begin to uh to believe you, but equally give them technical capabilities and investment and reassurance that uh what they're doing is going to be prolific and profitable.

SPEAKER_01 42:57

Yeah, yeah, it was kind of because you know, the classic cliche is always change management, change management, but you know, just by virtue of the way we live our lives, every day is a different day, you know, and every that sometimes gets blown up into disproportionately. But at the same time, when you encounter a situation like that, I think for me, one of the most important things that popped out from what you just said was this notion of the comp you know, blaming the outside world all the time. And and actually, it seems to me like the biggest competitor they had at the time was their mindset. Their mindset was a defeatist mindset. It was uh, I mean, I'm just commenting on what you told, said there. And yet today it it is uh, you know, obviously you you moved on to other things and that, but you know, it did manage to get itself back on its feet, and it would have altered its culture in terms of real some realization that if we want to stay in this business, we're going to have to adapt the way we do things.

Harnessing Culture Instead Of Changing It

SPEAKER_00 43:56

I don't I don't think we changed the culture. I think what I don't think you can change culture. And I've worked in 159 countries and lived overseas for 20 odd years. I don't think you can change culture. You can harness culture. You have to understand the culture. When we're developing brands for new airlines, the first thing I always say to the board in seeking approval for a change of brand, and I do it for justifiable reasons rather than simply because I'm the latest CEO, we need a new colour scheme, is to understand the values of the country or the region in which it represents. Because if you don't understand the cultures, those values are going to be represented through the airline. And that's critical. DHL was slightly different, although the values, DHL was constant globally. And we're able to create an environment in Paraguay, or you know, when I ran the Americas, I want 58 countries, the whole of the Caribbean. It's a fabulous job for four years. And we the team made some great impacts and uh and changes. But yeah, when you're talking to a country manager in Asuncion who's got you know five couriers and six fans, um, yeah, he has to or she has to feel as important as anyone else in the organization. So I I think that um that was fundamentally important, because they give them the belief and understand the value that you're trying to uh exude has to be represented through the brand, uh, but secondly and more importantly, through the uh through the people. So brand culture is you need to harness it, understand it, and then harness it. If you try and change it, you're you're you're gonna be in difficulty, in my opinion.

SPEAKER_01 45:43

So it's like pushing against the tide that you have to surf the wave rather than uh well it it it it's arrogant and it's rude, uh, to be honest with you.

SPEAKER_00 45:51

It would be the reason why I wouldn't do it. Um I'm sure some of your listeners uh would say, well, that's that's uh that's not correct, and they have changed culture. Perhaps they needed to change culture. I I I get that. Uh but generally I'm talking about the values of a country and the people who work for the organization. And yeah, 99% of the world's population is good, and we just listen to or hear the 1%, or perhaps that's increased to 2% now. But uh it it and that's I comes back to my point. Yeah, people first. Uh that sounds an awful cliche, but uh people, customers, shareholders.

SPEAKER_01 46:33

You're listening to Leading People with me, Jerry Murray. And my guest today is Peter Davies. So far, we've explored some of the leadership lessons Peter has accumulated across a remarkable career, from curiosity and communication to trust, empowerment, and creating an environment where people can perform at their best. We've also heard how some of those principles played out in practice during major organizational turnarounds. But coming up, I want to bring the conversation right into the present. As AI becomes increasingly embedded in organizations, what happens to the human side of leadership? How do we make sure technology serves people and customers rather than simply replacing human connection? And are some of the leadership qualities Peter has relied on throughout his career becoming more important rather than less?

AI Without Losing Human Service

SPEAKER_01 47:30

Now, let's get back to our conversation. Now, um I I'm looking at my list of questions here, and you've you've sort of answered an awful lot of them just through the conversation, so I don't need to ask them as such. However, one kind of question that is sort of one thread that's emerging just by having a quick look at these is um like you're you for example at the moment you're as you've mentioned, you're reflecting publicly on leadership on LinkedIn, and you're at a certain point that you hope that will turn into a book. In fact, this is how I was just hooked into this there recently, thinking, ah, Peter's putting out some really interesting stuff, and we had a little interaction, and I listened to a podcast you made several years ago. Um, was it the fighter pilot and the CEO? Worth anybody out there, it wasn't that many episodes, but it was pretty, pretty, pretty good stuff. I have to say, I listened to part of most of it. Um, but I I'm looking now at you know, if you're reflecting on this, and I I had a question here about what do you think today's leaders are most at risk of getting wrong. But I want to put a little bit of extra context around that, and that is this AI world that we're in, because we we could be ending up in a world where this notion that you're not just leading people anymore, but you're leading processes that involve bots and agents and all sorts of stuff. And apart from anything else, you know, nobody really has a crystal ball on where this is going uh directly. And, you know, uh there's a huge amount of risk involved in going down uh a technology route without understanding it because you might end up automating very on uh in what would you call it, bad bad processes that are already there. So what's the point in making something that doesn't work better at not working? So if you were now you're not dealing with this, and I know you're active, you're still active, Peter, but you're not dealing with this in a in a sort of significant business environment where you've got lots and lots, thousands and thousands of people, and you're trying to make sense of this. So just from where you're sitting today, from the vantage point of having a lot of experience, and and this is just one more thing that would come in now for any experienced leader out there. What do you think some of the challenges are going to be going ahead in terms of interpreting this AI type world and how is that going to affect how a leader might manage their people and deal with the risks associated with with implementing technology around people because it has an impact on people's lives?

SPEAKER_00 50:04

Yeah, I mean, you've obviously you've got to split between manufacturing and the service industry uh in terms of uh I mean A1, AI, A1, that's the road northern London. AI is road and split there. Follow that man, see what he's like as a mouth. Uh person, sorry, person. Um it's a fascinating question, uh, and we all use AI to uh to to a certain extent. Uh it is useful, it helps. Uh I I use Grammarly simply to make sure that my punctuation and and uh grammar is correct than the spelling. Um I I wrote recently that uh there's an opportunity here to obviously use AI as a tool, but we seem to be going in into a world, and I've got seven grandchildren, who are becoming uh more remote simply because they're on their telephones all the time and iPads and whatever. And um that creates um an environment where perhaps they become remote because they're fascinated by what they're reading and what they're seeing, and sometimes it's good and occasionally, unfortunately, it's bad, and we need to control that. But I I thought to myself, well, why why can't we develop the brain uh or use the brain more effectively to go back to not go back to the good old days, but people seem to be missing on customer service, yeah, with the classic, you know, your call is so important to us that we'll just keep on listening to Mozart for the next 25 minutes. That is not customer service. Uh and and AI bots are, you know, you never get the right answer. Sometimes they're very good, but sometimes they're not. It just occurred to me that if I was a CEO of a large organization with a big customer service department, then then I'd be more inclined to use AI as a tool for our customer service people, but still have them answering the phone and talking to people. Now, they may be old-fashioned, I may be boring, uh, I don't really care. But I I think we live in an environment where social intercourse is fundamentally important uh in looking people in the eyes and talking through their mouths rather than through some other process. And I think certainly uh that should be more encouraged. And from what I understand, talking to my grandchildren, that is beginning to happen a lot now in education. People are beginning to realize that we can't go totally technically minded. I I think there's a balance. Yeah, we're all about uh improving our profitability, all about improving the bottom line. And obviously AI is going to uh uh I say theoretically enhance that. I've yet to see a business case, to be honest with you, Jerry, that categorically states that if we employ this system, this process, it's going to improve a lot. Uh it may answer the phone very quickly, but heaven knows we don't know what the customers think in the other end. So uh that's probably too a general comment. I'm not uh in disfavour of technology, of course I'm not. Uh but I I think we need to make sure that we lead it and it's not being led by others, and that uh leadership still has those elements of skills of uh of uh communication, making sure people understand what it is you're trying to achieve.

SPEAKER_01 53:14

Just like the comment on two things you said there. One just towards the end, which is um about seeing an AI, whatever, driven tool or whatever uh improving profitability. Sure, sure, it there isn't an AI company out there at the moment that I mean part unless they're part of the big guys. The independent AI companies aren't profitable. They're just they're living on a bubble of promise, right? So um they they're not even profitable yet, they're just consuming vast amounts of cash and building data centers. The second thing you talked about automating customer service. I had a fascinating guest on about three years ago. He's a professor of customer excellence or customer service care at the University of Leuven. And his research shows that over automating customer service processes uh is is deadly because it turns customers off. Um, it makes puts too much pressure on the people because all the metrics that kick in around how responsive the customer service agents are, and they end up with about they're being measured on 25 to 30 variables at the end of the week, which the brain can't even process that amount of information, let alone evaluate you a lot. You're gonna you're gonna cut everything down into one-thirtieth of everything at the end of the day. And um, his argument is that would when you start automating these things too much and you take the human being out, you actually lose the connection to your customer. And that's so it's an episode from way, way back uh about three years ago. And I and that since then AI has evolved. I maybe I'll I'll get Eve back on the program again to talk about how things have evolved in the last three years. But I I I I watch what he writes and he he doesn't deviate too much from the fact that we still need and expect human beings involved somewhere in that uh customer responsive of responsiveness loop. So I just wanted to make those two observations. I don't know whether those resonate with you, but absolutely.

SPEAKER_00 55:05

I I I think you know human beings are most uh you know, we we're still important in this world. I mean that's a fairly obvious plain statement, but uh forgive me. But uh uh yeah, sometimes we forget the obvious um and try and get too clever. Uh and and I I you know I would like to think that that um AI can produce information which it does at your fingertips. I can ask it a question and it comes back milliseconds later, maybe half a litre of water. I don't know. That needs to be you can't make water, you know, um investigated. But but the point is that if you're on the phone to a customer and you don't know the answer because not everything can be answered, then you say, well, I don't know. And you can give an instant response. Now, the thing about that is and a lot of companies, well, that's fine, well and good. I've got to employ a thousand people to do that. So what? If if if that enhances the level of customer service, you retain customer services, you retain customers as a result of being proactive with the way in which you um communicate with them, then uh isn't that a good thing? I remember actually at DHL, we calculated uh with a certain professor uh at the University of Surrey, I think, um the cost of losing an account and the cost of gaining an account. And it cost DHL six times more to gain a new account than to keep one. So what we did, we invented uh um uh 76 customer service agents, all running around in little four fiestas in those days, DHL branded. And every time we opened a new account, they went in and took in a bunch of goodies and and and explained to the customer, shipping clerk or shipping manager or whoever uh what DHL was about. Took them five, ten minutes, and um in an attempt to retain that customer, having spent an awful lot of time uh making sure that uh we uh we uh yeah, we kept them. And in that respect, actually, interestingly, coming back to the point about creating the environment, in DHL UK and subsequently, we every Monday morning we're probably employed, uh take on five, six, ten new people. Uh, either myself, if I was there or one of my C-level colleagues, would go down and talk to them for 15, 20 minutes. Welcome to the company. Um, nine o'clock in the morning. My name is uh this is what I do, um, and the reason why you're here is this, and and just give them all sorts of trust about yeah, this is the family you've uh you've joined. And that went down exceptionally well. And again, you know, you were starting to explain what it is you are trying to achieve as a as a company, and therefore uh as a leadership, that was a vitally important aspect to me. But AI, great tool, fantastic. Uh, let's not discourage it, but let's use it probably. Let's think about how we can use it to ourselves and to our customers' advantage in such a way that we can enhance our bottom line, rather than simply say, well, if I employ AI effectively, I can discount a thousand jobs. That's not going to be clever in the probably short to medium term, to be honest with you. We've got major problems in the world economy. We can't afford the what we spend at the present moment, trillions of dollars of debt, and um and uh that's a big problem.

SPEAKER_01 58:27

Yep. So coming to the end, Peter, um, of our conversation, if my listeners could take away just one big idea about leadership from this conversation, what would that be?

One Takeaway And How To Connect

SPEAKER_00 58:38

Uh it's got to be curiosity for me. Uh in the widest possible sense, not just asking questions, but uh simply uh uh understanding, watching, seeing, interpreting, taking in. Just fill yourself with what that environment is about, whether the people are about. Well, you know, talk to the customers, of course, get leadership and and uh guidance from the board in terms of what they're achieving. And I I've turned a couple of jobs down as CEO because I went when I spoke to the board, I I didn't believe what they wanted to do. I I just thought they were there to you know do a quick, fast turnaround, which I'm not in that business. Um turnaround, yes, but but not for sake of short-term gain. So curiosity in in the widest possible sense. And uh in that respect, I would argue that the uh soft determines the hard.

SPEAKER_01 59:34

Okay, and that's a fantastic uh note to end our conversation on. People might want to contact you, Peter. Um, a lot of my guests recommend LinkedIn. Given that you're writing some great stuff on LinkedIn, is that the best way if they reach out to you um and and say they listen to the podcast?

SPEAKER_00 59:52

Yeah, absolutely. That'd be great. Um, and all my details are there. And uh and if they want to write to me personally, then uh you've got my email address. Uh we can I'm happy to talk to individuals.

SPEAKER_01 1:00:04

Yeah, I'll put some links in the show notes. So, Peter Davis, thanks for sharing your insights, advice, and wisdom with me and my listeners here today. Thank you. And that's it for this episode of Leading People. If you're new here and enjoyed today's conversation, I'd love it if you subscribed. It's the best way to make sure you never miss an episode. And if you are a regular listener, the best recommendation is always a personal one. So, if this episode made an impact on you, please share it with a friend or colleague. It might just be the best thing they listen to this week. Until next time.