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Allan Leighton is a very busy man. As this review goes to press he is the chairman of Pace, the world’s largest set top box maker; the jewellery brand, Pandora; the value fashion retailer, Pecocks; and MusicMagpie, the online buyer of pre-owned CDs, DVDs and games. He's a non-executive director for BSkyB, the international broadcaster; and for George Weston Ltd, a Canadian food processing and distribution group. And he's the deputy chairman of Selfridges, the luxury department store.

He was at the London Business Forum (LBF) to talk about how to make the right decisions under difficult circumstances, the “tough calls.” Something Leighton knows all about. It was the day that Pace released their results and their stock market price had lost 70% of its value since January. The tumble was largely due to the flooding in Thailand which had put the factory belonging to one of the company’s major suppliers under eight feet of water. He was due at a board meeting to discuss the results after speaking to the LBF audience.

Leighton insisted though that such events should not be used as excuses. Companies are still doing well even in these uncertain times, he told the LBF, because they are well run and have the best people: “It’s very easy to focus on the noise, let’s not use this as [an] excuse.”

He suggested that there are four types of decision: the Radical Decision, the Crisis Decision, the Opportunity Decision and the Progress Decision. The Radical Decision will restructure an organisation and it necessarily takes time to implement so “you need to stick to your guns,” he told the LBF.

The Crisis Decision was one he was facing in the light of Pace’s recent downturn in fortunes. These things happen, he told the LBF, but it’s how you react that is most important. Leighton explained that it can be lonely at the top and when there is a big problem, he said, “[it’s] tougher and lonelier.”

The first thing not to do in a crisis is panic said Leighton, accompanied by a slide showing Dad’s Army’s Lance-Corporal Jones and his famous catch-phrase: “Don’t panic Captain Mannering.” Leighton advocated a state of paranoia, ask yourself: “What is the worst thing that can happen to us here?” Once you’ve worked out the worst possible outcome you can work backwards to find all the information needed to prevent it from happening. This paranoia can also help leaders prepare for the unexpected even if things are going well.

The third type of decision, the Opportunity Decision, is “code for buying something.” When it comes to acquisitions and mergers, Leighton believes that leaders have to decide if there is synergy between the companies involved. Often, the two companies involved may have been rivals and it will always be tough to merge these competing cultures together. “Don’t mate with what you hate,” is Leighton’s general rule of thumb.

When he was CEO of Asda, Leighton followed this principle when he felt uncomfortable about a potential merger with rival Kingfisher plc. Ultimately, Leighton went with his gut and instead sold Asda to Walmart because he felt it was right for the company. The DNA of both companies has to gel. “Don’t get out of one hole by digging another,” he warned.

The Progress Decisions are those that are made about “the stuff that keeps the business going day to day,” explained Leighton. Good leaders, he said, “have a pretty good radar” and are able to anticipate problems before they arise. Crucial to this is listening to colleagues and customers to establish a true picture of what is happening within the organisation. When he arrived at the Royal Mail he soon realised that the senior management had no idea what challenges the postmen and women were facing. By listening to them Leighton discovered that “the shoes were crippling their feet and the bags they were carrying were letting in water.”

Leighton told the LBF that good businesses move forwards but they must be willing to modify their strategy and plans along the way. “In the army no plan survives the first contact,” said Leighton, “[…] it’s about momentum not perfection, businesses are about moving forward or sideways but not backwards.”

“Doing nothing is not an option,” Leighton concluded. Leadership is tough because you have to make the decisions that nobody else wants to make and ultimately the responsibility is yours, you can delegate decision making but “you cannot delegate responsibility.”

“Tough is an opportunity,” he told the LBF, it’s an opportunity to learn more and is more stimulating because leaders have to act quickly and adapt to constant change.