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Chemistry graduate charged with devising right formula

Financial Times: Chemistry graduate charged with devising right formula

By Matthew Jones and Robert Budden

May 14, 2004

David Varney has come a long way since, armed with a Surrey University chemistry degree, he enlisted in the ranks of Royal Dutch/Shell as a personnel assistant more than 35 years ago.

After working his way to the top of several big-hitting companies, gaining a reputation as one of the City’s most respected corporate figures, he is now set to become one of Britain’s highest-profile public servants, responsible for the biggest shake-up in Whitehall for more than 200 years.

The task will involve shedding 8,000 jobs at the Inland Revenue, 3,000 at Customs & Excise and a further 3,000 as a result of the merger of the two departments.

“This is one of the biggest delivery jobs in government and I am very excited about the challenge of making the new department a success,” said Mr Varney.

Those who know him believe he has the flexibility and people skills the job will require. “He has a very good reputation for change management,” says Geoff Armstrong, director-general of the Institute of Personnel and Development, where Mr Varney is a fellow. “He’s always been focused on getting the best out of people and realised that without their involvement in change nothing will happen.”

“He is not a typical FTSE 100 chairman in terms of his style and his approach,” adds a senior executive who has worked closely with him. “He is very down-to-earth and spends a lot of time at the coal face talking to employees and customers. He is not the sort of person who needs the red carpet treatment. He just turns up.”

The 58-year-old’s physical appearance – something between a pub landlord from south London, where he grew up, and a cheery garden gnome – belies a sharp business mind and a rare capacity for innovation and plain talking.

Mr Varney is also no stranger to pushing through change. After making his name as the head of Shell’s downstream operations in the UK and helping to sort out the Brent Spar public relations disaster, he became one of the architects of the British Gas break-up.

Mr Varney steered the exploration and production arm of British Gas, known as BG Group, through its demerger from the pipelines business, re-named as Lattice.

During his four years in the job, between 1996 and 2000, he was widely credited with improving BG’s performance and unlocking shareholder value.

As chairman of MMO2, the mobile phone company spun off from BT, Mr Varney has overseen a successful group rebranding of the mobile business and a strong turnaround in customer growth, particularly at the group’s German operations.

He had been tipped as a possible successor to Luc Vandevelde as the chairman of Marks and Spencer. However, in recent years, he has shown an increasing interest in public sector and community work. After moving to a part-time position at MMO2 last year to free up time for his outside interests, he made it clear he was not looking for another big corporate job.

Mr Varney was once described by Sir John Collins, his former boss at Shell, as “a disciplined maverick” who “tested the boundaries”.

In taking on the task of crunching together two huge government departments, Mr Varney will need all the creativity and control he can muster.

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