The CBI's new director-general is promising a single-minded focus on what matters most for growth, productivity and prosperity across the UK.
"The UK has a golden opportunity to move on from its successful recovery to build a new era of growth and prosperity across the country," says Carolyn Fairbairn, just days before she takes up her new role as director-general of the CBI. And while she is still formulating her to-do list for the next five years, she's started her homework – visiting and listening to members across the UK.
Skills, infrastructure, tax and regulation, access to global markets, and trust in business are the issues that have come to the fore for business. "This is the agenda that's really going to matter for the next few years," she says.
There's a clear desire to focus on the long term priorities for a thriving economy - “fixing the foundations” – and building on what she sees as an impressive performance by business over the past five years.
To emphasise where further action is needed, she highlights the facts that the UK has now been overtaken by Poland for levels of literacy and numeracy in schools; that the UK’s productivity is 30 per cent lower than that in the US, and 28 per cent lower than Germany’s; and that the UK ranks just 24th in the world for infrastructure.
Fairbairn views her new role as her chance to champion business in the UK at a time of very intense global competition – epitomised by the current crisis in the steel industry. But she adds that every new DG has a chance to make their own imprint on the organisation.
“The CBI has an extraordinary 50-year heritage in terms of its relationships with many businesses across the UK, its influence at global, national and regional level, and outstanding policy thinking,” she says. But she also wants to see how the organisation can adapt itself to a new UK – one where she expects devolution to play an important role.
“Devolution creates real opportunities for business,” she explains. “But devolution settlements need to work in a way that enables business to grow and succeed – and business needs a voice at the table.”
To reflect this shift, Fairbairn believes the CBI should “face outwards from London a bit more”.
She is quick to add that the UK is fortunate to have one of the world’s great cities. “We need to keep it great,” she says. “But I feel strongly about the opportunities outside London – particularly on the productivity and prosperity agenda - and that’s an area where I would like to make a difference,” she says.
“The other area is broadening out the voice of the CBI to different sectors and different sizes of businesses,” she continues.
“Members across a very wide range of sectors put skills and infrastructure at the top of the list in terms of what matters most to them. There’s much more that unites business than divides it.”
Experience to succeed
Fairbairn has plenty of hands-on experience to help drive this ambition. “It’s one of the advantages of the kind of career I’ve had,” she explains.
“I’ve spent over 25 years in British business. I had an early flirtation with being an economist [at the World Bank] and then a journalist [at The Economist], but I was always drawn to business. I’ve always been curious about how businesses succeed, how they thrive and how they make money.”
So she spent eight years at McKinsey, which saw her “travelling around the country working with clients in different sectors, of all different sizes and just cutting my teeth on what matters”. These companies included retail, computer services, investment management, as well as newspapers, which were tackling issues such as expansion, cost control and global competitiveness.
One of her first clients was a West Country brewer, where she worked on a challenging merger. “I learnt a lot through that – about the challenges of how you compete, and the difficulties of making money in a very competitive environment.”
And that stood her in good stead when she took the role of director of group development and strategy at ITV in 2007, just before the advertising market crashed. She was in charge of an emergency programme to reduce costs by 25 per cent, which enabled ITV to weather the storm and subsequently return to growth.
“I’ve been right at the coalface of some very challenging business choices, not only at ITV and the BBC [where she created and launched Freeview – now the UK’s biggest TV platform], but also with my recent board roles.”
She’s had four years on the board of Lloyds Banking Group and also of midcap manufacturer, Vitec Group, which supplies broadcast and photographic equipment. The most recent issue Vitec faced, she says, is the growing challenge from Chinese competitors.
“The Chinese economy is becoming far more competitive at the high end – it’s not cheap and cheerful anymore - good quality products that are challenging our companies,” she adds.
Trust in business
With her experience at Lloyds – and in a sector under the spotlight in terms of reputation – Fairbairn is also clear about the challenge of the public’s perception of business.
For Lloyds – and all the banks – it’s been a case of treating customers fairly, she says, adding that outstanding customer service is now a top priority for the new leadership teams. “Our banks are vital institutions for the UK, and it is important for their role in society to be understood and valued.”
In terms of the broader relationship between business and society, Fairbairn believes that it can be strengthened. “If business can reach into schools and universities to create opportunities for young people; if it forms part of the solution on roads, rail and infrastructure across the UK – people will see that and judge it. Then I think some of the issues around trust in business will start to diminish.”
And on the obvious question around her being the first woman DG the CBI has had, she says: “If through my appointment there is just one more role model, one more example that encourages more women to think they can go into business and have a fulfilling and successful career, that’s fantastic.”
But while promoting diversity can probably be added to the list of issues that unite businesses, Fairbairn also sees it as the CBI’s role to “bring reason, evidence and different voices to the table” on issues where there isn’t complete unity, to then analyse and weigh up. This includes the EU referendum.
On this topic, she argues that the CBI and other business organisations need to be clear about their role. “People will vote for many different reasons,” she says. “It’s our job and the job of business to set out as clearly and as faithfully as we can what we believe the implications of different decisions are for jobs, growth and prosperity.“
She reiterates that the CBI’s consistent position, held since 2013, is that most members want to be in a reformed EU because of the benefits of the Single Market – and that the CBI has been clear on what those reforms are, highlighting further development of the single market, more trade deals, less and better regulation, as well as ensuring that the integrity of non-Eurozone countries such as the UK are protected.
“It’s important to recognise this is not a wholly unanimous view,” she adds. “The CBI has some members who feel that the UK should leave or who understandably want to see the outcome of the reforms before finally making a decision. Those members who take a different view on the EU speak up, we listen to and respect their views, and we will consult with them – and all CBI members - again when the Government’s deal has been done.”
Fairbairn also welcomes the Prime Minister’s letter to the President of the European Council as an important step forward. “It sets out four sets of reforms that touch on most of the concerns that UK business told us about in the extensive consultation we have conducted, involving over 130 separate consultation events over the past 3 years. I am confident, therefore, that what the Prime Minister has so far revealed will be broadly supported by our members in terms of direction of travel, and we will redouble our efforts to help the Government achieve it, as well as helping to establish the details for how it will work in practice.”
But although the European referendum will undoubtedly be an important issue during her tenure – and she makes a commitment that the CBI will continue to assess the reform progress as it unfolds – she’s keen to ensure that Europe does not dominate the CBI’s agenda.
“You’ve only got to get around the country talking to businesses to understand the issues that weigh on them day in, day out,” she says, once again referring to skills and infrastructure and linking them both to the issue of productivity.
With that in mind, Fairbairn has made regional visits to members a priority for her first few weeks in the role, to get to the heart of the pressures they are facing – as well as to get their take on what they value about the CBI and how it can improve.
She believes that the CBI is “more relevant than ever” because of the kind of challenges facing business.
“Solving them needs businesses from the bottom up to engage and give their ideas. That will have a real impact on policy. There’s no other organisation better than the CBI to facilitate that,” she says.
“It is an extraordinary organisation, full of outstanding people, working across the waterfront of issues affecting business, from tax and regulation, to skills and employment. And I plan to bring an even more single-minded focus to what really matters to business and to the economy. Above all, I would like the CBI and my leadership of it to be judged on our achievements in making a positive impact on the productivity, growth and future prosperity of the UK.”