On a day when global stock markets tanked, wiping almost 5% off the value of the FTSE 100 companies, you’d expect a self-confessed “hopeless” stock picker to be frantically racing around trying to move their money to safer ground such as government gilts or gold. But then Allan Leighton isn’t your average stock picker.

While the financial system as we know it teeters on the brink of collapse, the business titan, who’s rescued more ailing companies than Red Adair has extinguished burning oil wells, reclines on a sumptuous sofa in his office at the London HQ of jewellery business Pandora which he chairs to talk about his new business tome.

The follow-up to his 2007 bestseller On Leadership is titled Tough Calls Making the Right Decision in Challenging Times and features wisdom from luminaries such as Sir Terry Leahy, Justin King, Andy Clarke, Sir Stuart Rose, Dalton Philips and Archie Norman (see over) ­everyone who’s been anyone in grocery retailing, basically.

The book addresses one of the key issues in business today how to make a swift but sound decision in often difficult circumstances and in an exclusive interview with The Grocer, Leighton recounts the tough calls he’s had to make over his career, not least the decision to leave Mars and join Archie Norman at Asda in 1992.

“At the time everyone said to me ‘you must be mad’,” he recalls. “The company was a billion in debt, it was breaking its banking covenants, had no like-for-like sales and its distribution systems had collapsed. But sometimes you just feel it’s a 51-49 thing and on balance I decided to go. I’m glad I did because it was fantastic.”

The decision paid off, but Leighton admits in the book to serious reservations. “I remember the headline of [analyst] Phil Dorgan’s first report about the business: ‘Will the dead cat bounce?’ It was a mess.”

Leighton’s belief was that all he and Norman had to do was take Asda back to what it had once been. “When you go places, people expect you to push on and change things, but sometimes it’s better to go back, but go back with modernity. Justin’s done a bit of that at Sainsbury’s and Dalton’s doing a similar thing at Morrisons. Businesses have a DNA and generally speaking if you stick to it, it works and when you move away from it, it doesn’t.”

The Leighton and Norman dream team didn’t make the right calls every time, he admits, but then part of what makes good business leaders so successful is the ability to admit they’ve made a bad decision and then “modify” accordingly. “I used to think you learn from the things you do well, but actually you really learn from the things that you get wrong and how you fix it.”

While outsiders might argue that Leighton’s time at Asda was what helped secure his place in the pantheon of modern business leaders, he disagrees. “The making of me was at Mars, as it was for lots of us. It was an organisation that taught people about products, about customers and about how to manage things in a very formulaic but constructive way.”

As a result of the manufacturer’s track record of turning out top-notch retail talent, Leighton raided it time and again during his tenure at Asda but today he doesn’t see any company dominating the grocery talent pool as Mars did back then. “Tesco is a really good finishing school and they’ve got good people, but Justin has created a really good team at Sainsbury’s and Andy has a good team at Asda. Dalton will do the same thing at Morrisons. He’s a good leader with very good people skills and he’s building a good team there.”

Leighton knows Philips well thanks to the three or so years he spent at the Morrisons CEO’s former employer, Canadian food retailer Loblaw. He wanted to include Philips and his supermarket CEO contemporaries in his latest book because of the recent changing of the guard at the multiples. “It’s interesting to observe this young generation as they’re a pretty competitive group,” says Leighton. “I think Phil Clarke will be very good at Tesco, Justin has done a great job at Sainsbury’s and Dalton is getting to grips with the new Morrisons and will be really good.”

As for his old charge, Asda, he believes it couldn’t be in a safer pair of hands. “Andy Clarke was there from the beginning and he understands the DNA of that business. My sense from talking to Andy is that he’s very focused on getting it back to what it’s best at and he’s got Judith [McKenna] with him who is very, very smart. I’m really confident in that business because I know when you get the model working it’s a great business.”

As indeed are Asda’s bitter rivals, who he describes as the best in the world at what they do. “They’re not the most glamorous-looking stores, but if you look at the profitability of the stores and the density of the stores and supply chain systems, they’re second to none. Britain is really good at retail and retail is the measure of how the economy is doing, so we’ve got to be sure that conditions are right for people to invest in these retailers.”

Leighton says that while he’s supportive of the government’s austerity measures, “tougher calls” need to be made to get the economy back on track with a plan put in place to help businesses back into growth. “In my view, the economies of the world are best driven from the consumer perspective rather than anything else, so perhaps we should bring the price of VAT down, and we’ve got to get inflation down.”

Leighton points out that there are plenty of businesses making a profit despite the economic doom and gloom, largely by “sticking to the basics, managing their costs and looking at how they can grow their business”.

That’s why he believes the multiples are well placed to ride out the storm. “It’s a very value-conscious world and if you look at food inflation and non-food inflation there’s volume decline everywhere. Inflation is a friend of the retailer while it’s there, but not a friend of the retailer when it disappears. You’ve got to stimulate volume growth and that’s clearly what Tesco has started with its new price offer.”

Not that the relative health of the grocery retailers would tempt him into a comeback. Having stepped down from his role as deputy chairman and president of Loblaw earlier this year after “putting the business back on track”, Leighton says he wouldn’t contemplate a return to UK grocery. “You should never go back in my view. It was great to be the CEO of Asda and I had 10 of the best years of my life, but I wouldn’t do it again.”

He probably wouldn’t be able to find the time, anyway. In addition to his chairmanships of Pandora, fashion chain Peacocks and satellite box maker Pace, Leighton is also deputy chairman of Loblaw holding company George Weston and a non-exec director of BSkyB. Pandora and Pace are beset with problems, but he relishes the challenge of turning them around. “By my very nature I tend to look at businesses that are slightly more difficult.”

Fortunately for those businesses, his ability to turn around a business in which he has a vested interest is unparalleled. Leighton is also looking to use his own capital to seed new businesses and invest in undervalued businesses he bought into online entertainment retailer Music Magpie earlier this year, adding another chairmanship to his bow.

He is not quite so confident about backing businesses he does not have an interest in, however. “Stock picking and investing in companies you’re involved in are two different things,” he says. “I always invest in companies I’m involved in because I’m involved in them and you can shape what happens. But when it comes to picking a stock that I’m not involved in, I’m hopeless at that.”

It’s a rare chink in Leighton’s otherwise famously tough armour - the sort of armour you need if you’re going to make tough calls.

All royalties from Tough Calls: Making the Right Decision in Challenging Times, published last month by Random House, go to the charity Breast Cancer Care

Leighton on how to make a tough call

1) Step in
2) Collect and digest the best information available at the time
3) Make the decision
4) Communicate the decision
5) Make sure it happens
6) Move on

Tough talk from the top: other CEOs have their say

“Part of being chief executive is to be almost insanely confident and committed. At the same time you have to have half an ear open to the fact that you might be completely wrong. You need to keep listening” - Justin King
“Sometimes I let people make what is clearly the wrong decision, because they have to learn. After all, if it is the smaller stuff, why not? People have to be taught how to use their judgement and wisdom to make the right decision. If they are overruled every time they’ll end up never making one. They’ll just keep coming to you to ask if they should do this or that” - Dalton Philips

“Everybody thinks they have an opinion on how to run M&S. The news is, everyone’s opinion is different. One likes the chicken jalfrezi, someone else likes this and someone else hates that. Everyone likes the brand, but none of them will agree on which bit they like. It is like listening to the chatter of an opinionated cab driver from the back of a taxi” - Sir Stuart Rose