At the end of the tumultuous first day of trading in AO World’s shares in 2014, John Roberts was worth £542m on paper, a fortune roughly equal to that of Harry Potter author JK Rowling, reported the Financial Times.
It seemed fantastical — or “just weird” — to the ex-waiter and kitchen salesman, who had founded the online appliance retailer 14 years earlier in response to a £1 bet. Watching the opening surge with him was Steve Caunce, then AO chief operating officer and chief financial officer. After about 15 minutes, they left the City of London trading floor. “We wandered around, and we were looking at each other going ‘What have we done?’” recalls Mr Roberts.
They returned in a daze to Bolton, north-west England, where AO is based: “It was meant to be some, like, huge, euphoric thing, and it was the biggest anticlimax ever. We had a day off and the day after went back to work.”
The stock, up 33 per cent on day one, has never recovered its early highs. Asked if he would go through the flotation again, Mr Roberts says: “Absolutely. Ten times over I’d do it.” Four years on, though, he is no longer chief executive; Mr Caunce is.
He took over the role in 2017. Mr Roberts, still only 44, now has the unorthodox title “founder, executive director”. He denies the change was forced on him. But the shift from self-diagnosed “control freak” on “the knife-edge of going bust”, to his current role has forced him to loosen his grip and change his leadership approach.
It is, he says, “psychologically, one of the biggest journeys and one of the most difficult journeys that I’ve been on”.
AO is short for Appliances Online, one of the web addresses available when Mr Roberts set out to shake up the white goods business. On Christmas Eve 1999, a friend bet him £1 he would not follow through on his boast that he could use the internet to “flog gear”. Mr Roberts never lacked confidence: AO’s first business plan had the grandiose mission statement: “Changing the Face of the White Goods Industry” on its front page.
He and colleagues brainstormed how to re-engineer the supply chain to deliver faster to customers ordering online. The early culture was based on “fun, and alcohol, and team building”.
After the listing in 2014, Mr Roberts seemed to live up to the stereotype of the mouthy entrepreneur-founder who rubs the City up the wrong way. A year after going public, AO issued a profit warning. The shares dropped 30 per cent in a day. Shareholders are unforgiving about companies that miss expectations, Mr Roberts learnt. “Who gives a shit whether we make 16.5 [£16.5m] or 17.5? What difference does it make?” he remembers asking. “It makes no difference at all to what we’re doing, and the plans that we’ve got . . . It makes no difference. It turns out, it does actually.”
Mr Roberts says he and Mr Caunce increasingly realised it made sense for Mr Caunce to take on the title and governance responsibilities of chief executive: “And one day he said it, just said the words out loud. And I said, ‘I’m not bothered, it makes no difference to me’.” He and Mr Caunce still run the business “like two brothers” and together own some 40 per cent of the listed company.
Even if the change of title was not an issue, Mr Roberts seems to have wrestled with the move to a more “paternal” role. The mixed family metaphors may be a sign, but the allusion to fatherhood is no coincidence. He has five children, two aged seven and eight, and three between 19 and 22. Arriving for the interview in London, he is on the phone to Lancashire trying to sort out car insurance for one of his older children.
The hard part of relinquishing control is recognising that even if “I know he’s going to do that and it’s going to go wrong . . . I’ve got to let him do it”. He adds: “The funny thing about experience is that you can’t give it to someone . . . We’ve learned all these lessons [from raising] the older kids, and the discipline [is] that you’ve got to let the younger ones make the same mistakes.”
Three questions to John Roberts
Who is your leadership hero?
Jack Welch for his early vision on investment in people way before it was normal at scale, and Jeff Bezos for his unwavering commitment to building an ecosystem rather than a retailer with customer obsession as its north star at a scale few truly comprehend. Neither journey was for the faint hearted but nothing great was ever achieved with ease.
If you were not a CEO, what would you be?
Very likely spending my time at her majesty’s pleasure!
What was the first leadership lesson you learnt?
Shouting is a very short-term solution. I will invest time into inspiration and looking through the other end of the telescope, rather than instruction every time. It is hugely more rewarding and enduring for all involved.
Mr Caunce, who joined AO in 2005, recognised “I was doing lots of things because I’d always done them rather than because I was good at them. And so, those things needed to change”.
Mr Roberts remains a hands-on entrepreneur at heart. But he has had to learn to be “more respectful of my impact” when he visits parts of the business now managed day to day by the chief executive. “It’s that easy to be super-enthusiastic and say, ‘Hey why don’t we do this, hey why don’t we do that?’,” which could prompt staff to take the wrong decisions. Instead, he has changed to asking questions such as: “How can I help you do X, Y or Z?”.
Mr Caunce has asked him “to get us to the places that we have no right to get”. It is an “inexact brief”, but one that lets Mr Roberts work on plans to overhaul recycling or tackle the problems of high-cost credit that stop poor households buying goods cheaply. He can also devote time to family and philanthropy, such as helping to provide youth clubs in disadvantaged urban areas.
Meanwhile, AO has expanded into the Netherlands and Germany, a strategy that weighs on profits. If he had another chance to go public, Mr Roberts says he would raise more money and emulate Jeff Bezos, who warned investors when Amazon listed that the group would reinvest profits for the long term.
He says it is “frustrating” that negative coverage and the languishing share price disconcert stock-owning staff. “I’d just like them to share in [AO’s success], but I still believe fundamentally, in the fullness of time, they will.”
Asked if he might reassert control by taking the business private, as frustrated founders sometimes do, Mr Roberts cites the practical difficulties. Ultimately, he relies on AO’s “mum test”: if you had to explain any work decision to your mother, would she be proud of it? “If I went to my mum and said, ‘Hey, I did all this stuff, and I told these people we were going to do this, and then it didn’t quite suit me any more, so I changed it all’ — would she be proud of what I did? Well, the answer’s firmly no, isn’t it?”