It’s intriguing that BP chief executive Lord Browne should have ordered dozens of senior managers to stand aside, so that his directors can conduct an inquiry into missed production targets with the minions in the UK’s largest company.
According to the Financial Times, the slightly-built, mild-mannered Browne has created a “culture of fear”, in which executives were afraid to report failure, resulting in an increasingly glossy and inaccurate picture being reported up the chain of command.
This is quite a radical initiative on the part of Browne – the equivalent of a commander-in-chief talking over the heads of his generals, directly to the troops. One wonders where it might end if it caught on as a trend.
Tony Blair might stand down his cabinet, bypass his legions of policy wonks and spin doctors and talk directly to Labour activists in the field about his failure to meet “production targets” in public services, membership of the euro and freedom-of-information legislation.
But I’m afraid that’s about as likely as Saddam Hussein circumscribing his trembling sidekicks in order to ask the people of Iraq what has gone wrong with his regime. Where there is real fear, there is real obsequiousness – and a very real arrogance with power that creates and encourages barriers to real information being received at the top.
I don’t see any of these factors at play in Browne’s command at BP. If anything, the dislocation of the top of BP from the reality of its operations was more symptomatic of the leadership style of Sir Bob Horton. As chairman and chief executive in the early Nineties, he became so seduced by his own alleged intellectual superiority over his colleagues that he cut off his command from virtually everyone.
He paid a full price for his vanity when, in 1992, institutional shareholders cut him off rather less virtually and invited him to spend more time at organisations that foster such arrogance – such as Railtrack. Horton was succeeded at BP by the altogether more cerebral Lord Simon, whose mistake was to be seduced by the idea that industrial talents – with which Simon was richly blessed – could effectively be transferred into the service of the Government.
As I have already implied with reference to Blair, politics is about protecting yourself from those you manage. It is about not letting bad news touch you, or even enter your sphere of operation. Poor Simon showed every sign of hating – and being utterly disillusioned by – his time as an adviser to New Labour, which doesn’t manage issues so much as position itself around them.
Now comes Browne, who shows every sign of fulfilling the potential that Simon squandered in politics. Indeed, last week Browne was voted the UK’s most admired businessman for an unprecedented fourth time in a row. He has appeared to know what he is doing at BP in a way that his predecessors – one through behavioural weaknesses, another through political distraction – have failed to achieve.
That is what is so intriguing about this latest initiative to disfranchise middle management in an attempt to get at the true state of affairs at an operational level. On the face of it, it seems crass and simplistic – for one thing, if you don’t need these middle managers, why are they there in the first place?
The answer may be that a good manager does whatever is necessary to repair his management structure if it is faulty. BP was forced into humiliating revisions of production targets in September and October, and Browne needs to address the quality of information that his board is receiving. It may be embarrassing to cut out middle management in that corrective process, but that doesn’t make it the wrong thing to do.
My problem with Browne’s initiative is less to do with whether it is the right course of action right now in serving shareholders and more to do with the management psychology it reveals.
Priests say that humility is an elusive grace – as soon as you recognise that you’ve acquired it, you’ve lost it. Recognition of one’s own humility is a function of pride. A similar paradox operates in the internal communications of an organisation such as BP.
At the very moment a board of directors comes to believe it is making direct contact with the grass roots of its organisation, it ceases to do so. This is not to suggest that it won’t receive valuable information – I’m sure that the reports that BP is making its unit managers write up will be helpful in the short term. It’s more that BP’s action destroys the natural communications structure within the organisation. What BP is doing is emulating a discredited “cascade” principle from the Seventies, in which the direction of the communications process is top-down. The danger that BP’s directors face is that they are doing unit managers’ jobs for them.
The flow of information should more permanently be from the bottom upwards, with the board managing the outcome. That is what middle managers are for and that is the system that BP has temporarily suspended. I suspect it is an emergency measure that won’t last long.
If BP’s middle managers have failed in their role in the communications process, they don’t need to be circumvented by the board. They need to be replaced. And I suspect this is what Browne has in mind.
George Pitcher is a founder partner of communications management consultancy Luther Pendragon. His book, The Death of Spin, is published by Wiley at £16.99 and is available from bookshops or at wileyeurope.com