Someone said on the radio the other day that, if Tony Blair and Gordon Brown were chief executive and finance director respectively of a publicly listed company, their shareholders would have fired one or other, or both of them, by now. The argument was that any owners of a commercial enterprise simply wouldn’t tolerate the kind of internecine rivalry for the top job in which the Prime Minister and Chancellor are indulging themselves; it would potentially be too damaging to the value of those shareholders’ investment.
I didn’t give the analogy much thought, it has to be said. I have long argued, here and elsewhere, that there is greater democracy inherent in the constitution of a corporation than there is in our politics. Shareholders enjoy an annual plebiscite at their companies’ AGMs – it’s just a shame that large, institutional shareholders, which hold the greatest power over incumbent managements, have historically been indolent in holding those managements to account (though they have improved lately). By contrast, a political party that has formed the Government has up to five years of being challenged only by its political rivals before being held to account by voters. Even then, our absurdly inequitable system of election favours an entrenched incumbent, such as the present government.
It’s true also that rivalry for the top jobs in companies is every bit as commonplace and bitter as it is in politics. The Blair-Brown feud is replicated throughout British industry. I remember rivalries being particularly intense between finance directors and chief executives – and between chief executives and executive chairmen – in the privatised utilities of the late Eighties and early Nineties. This was principally because such huge new corporate monoliths were being created, with powerful access to the capital markets, that had no depth of management or well-worn succession plans. More recently, ailing retailers have offered prime examples.
Furthermore, finance directors who want to be chief executives are best positioned to be so appointed. One can plausibly talk up the new hegemony of marketing directors, but it remains a blunt fact that those who have their hands on the purse strings and the clearest idea of what is and, more importantly, what can be in the purse are the most attractive propositions for shareholders for the top job. That’s why Brown knows he will be attractive to voters – and he wants the top job, in a way that previous Chancellors Nigel Lawson and John Major never did (the lack of desire being more than justified in the latter).
As I say, all this was fairly familiar territory for me, so I paid little regard to the suggestion that Blair or Brown or both would have lost their jobs in corporate life. That is, until I read the comments of senior civil servants regarding Downing Street’s neighbourly spat in last Monday’s Financial Times. From these insights from within the running of Whitehall it is possible to construct a far more valuable lesson for business than the simple observation that bad behaviour at senior executive levels deserves the sack.
With the Treasury and Number 10 sending out conflicting signals, officials have developed a “silo mentality”, with government staff retreating to their departments and avoiding meetings. Meanwhile, the reported instinct within departments is to do nothing, until the turbulence at the top is resolved. The only leadership initiatives being taken by ministers is to “cosy up” to Blair or Brown in private, while sending junior colleagues to meetings. The result is that any decisions are seen as temporary, because they don’t have senior weight behind them. Needless to say, there is no collective responsibility.
For some, the business of government has actually ground to a halt. So morale has plummeted, there is little or no faith in the leadership and civil servants are simply waiting for Blair to go after the election, meaning that no work will be done for at least six months. People feel battered and abused, as policies are swung between Blair and Brown, depending on where it might receive most self-interested attention. Officials keep their heads down and their mouths shut “because there’ll be another policy along in a minute”. Perhaps the most telling comment is that “It’s like running a school on the basis of who is winning the fight in the playground.”
Sound familiar? The lessons for running a business are obvious, but nonetheless profound. Some would say that boardroom competition keeps executives on their toes and performing. But rivalry at the top of companies demotivates middle management and businesses grind to a halt, just as in politics. All that a company is waiting for is for one or both of the rivals to leave – and shareholders should help them on their way.
George Pitcher is a partner at communications management consultancy Luther Pendragon