Benny Higgins: Change needed to keep on growing

Tesco Bank boss Benny Higgins. Picture: TSPL

The choices we make determine our future. Seven years ago, in the midst of the biggest dislocation of financial markets for generations, an opportunity to create a new bank was presented to me and others. It could be argued that this extraordinary chance to form a genuinely different bank – one really focused on serving customers – only emerged because of the crisis. Would Royal Bank of Scotland have been willing to stand aside to allow Tesco to bring its characteristic obsession with meeting customers’ needs to the banking sector, were it not for the group’s need to raise capital?

At the time, when jobs in financial services were being shed in tens of thousands, I was approached to manage the transaction and to then become chief executive of Tesco Bank. One of the first choices that I had to make was my recommendation on where the business would be located. Notwithstanding the fact that there was a small team already based in Edinburgh, I was free to make any logical choice. One natural choice would have been London with its obvious strengths; or a city in the UK or beyond, where – apart from tapping into the local business advantages – I may have more readily sated my thirst for watching quality football. I chose Scotland.

I am a proud Scot, and I am delighted that we have created a great business in this country. Since 2009, we created more than 3,000 jobs in Scotland between Edinburgh and Glasgow, as well as many more in Newcastle. That’s 3,000 families in Scotland supported by a job that is the direct result of the choice made back then.

Tesco Bank was created seven years ago. Picture: TSPL

That choice, however, was not an emotional one, it was an entirely rational one. We must, as far as we can, ensure that we create an environment in Scotland that makes such decisions entirely legitimate and logical. The hallmarks of such an environment include the presence of a strong talent pool across a range of disciplines, enabling infrastructure to be created supporting customers buying products and services digitally, and a general ethos that promotes and lauds successful businesses of all sizes.

Scotland has a great heritage of success and innovation in many sectors, including financial services. Today in Scotland we are in a stronger position than perhaps we fully recognise. But in the words of Giuseppe Tomasi di Lampedusa in his novel The Leopard: “If we want things to stay as they are, things will have to change.”

Policymakers have a vital role to play of course, but this plea is aimed at Scotland’s business leaders. Eight years on from the financial crisis, the sense of economic jeopardy and the inherent risks to stability at home and around the world remain acute. There has never been a more important time for business leaders to aim high not just for their own businesses but for the country too. Enterprise must be seen as an essential, vital ingredient for a thriving country. The catalytic impact of establishing a strong collective economic voice, and creating pride in our achievements and our ambition should not be underestimated.

The only sustainable way to run a business is to recognise the central imperative of understanding your customers’ needs and aligning your resources to meeting them. What is right for a business is right for a country.

Scotland is important to Tesco. Including Tesco Bank, we have around 32,000 colleagues in Scotland – and we are the largest customer of Scottish agriculture. The decision to base the bank here in Scotland has proven to be a wise one. It has enabled us to build a business that serves more customers in more ways than ever before. We are ready to play our part in how businesses can pull together to create a bright future for Scotland.

While on secondment from Standard Life in Montreal, I watched Bill Clinton’s inauguration as US president on 20 January, 1993. Echoing what his great hero JFK had done in asking Robert Frost to recite a poem, we listened to the wonderful Maya Angelou’s verses composed for the occasion. The words have remained with me since that day resonate with the essential point I’m making here:

“The horizon leans forward,

Offering you space to place new steps of change.

Here, on the pulse of this fine day

You may have the courage

To look up and out upon me, the

Rock, the River, the Tree, your country.”

• Benny Higgins is chief executive of Tesco Bank