It’s difficult to know where to start with the Barclays story. Too many trees have been felled to tell us how unedifyingly the axing of its rural branches sits with the handsome pay awards for its top executives and its new marketing slogan that “A big world needs a big bank”. So I will show some ecological restraint in that regard.
The big question for big Barclays is why it should have given us such a big stick to beat it with. Part of the answer must be personal ego. There are any number of nouns to which I could append the adjective “big” to describe Anthony Hopkins, the self-regarding actor appearing in Barclays’ TV and cinema ads.
But it is part of a film star’s personal baggage to have a large ego. More interesting is the issue of the corporate egos of those who thought it would be a good idea to have Hopkins speculating that his fee for his next big movie has to be, well, big. Did it not occur to the Barclays marketing apparatchiks that a branch-closure programme that could cost 500 jobs might raise questions among customers and shareholders not so much about Hopkins’ fee for his next movie as about his fee for this appalling commercial?
So the issue is not about the colossal Hopkins ego, but about the egos of those that give it rein. Especially on the ego of the man at the top of Barclays. Step forward heretofore chairman and chief executive Sir Peter Middleton.
I don’t suggest for a millisecond that Middleton would detain himself with anything so trivial as the content of an ad campaign. But is it not possible that a sun-eclipsing ego at the top of an organisation can imbue its management with the kind of arrogance exemplified by Hopkins talking “big” in a limo?
Note that Middleton has been both chairman and chief executive, having manfully stepped into the breach when Martin Taylor was abruptly sacked last year and his successor had suddenly to rule himself out on health grounds. Even Middleton couldn’t hang on to both roles, in a post-Cadbury Report corporate-governance climate that frowns upon such autocracy. But, while it lasted, Middleton did manage to trouser &£1.76m, a figure that was announced in the same week as the branch-closure programme.
Herein, I believe, lies the key to Middleton. Ever since he left the Treasury in 1991 and a (relatively speaking) paltry pay package, he’s been a mandarin in a hurry. Some of his boardroom machinations have left little doubt that he has been determined to make up financially for the years of public-sector pay.
There are those in British industry and in British banks who have reason to suggest that Middleton makes an uncomfortable deputy or non-executive director. It is, of course, part of a good non-executive’s job to be uncomfortable for those at the executive helm. We can only watch with interest, now that Middleton has placed himself firmly in the so-called “fat-cat” executive limelight, how he handles similar uncomfortable pressure. The events of the past fortnight have made Middleton a marked man.
Further evidence, if it’s needed, of the validity of the view that events at Barclays are born of a corporate culture of arrogance and ego is to be found in the examination of the inherent error in the current “big” campaign. It is just so manifestly wrong in its central supposition that size is chic.
One of the main offers of Barclays’ campaign is that it is big in e-commerce. It is almost embarrassing that the bank is hammering home that big is beautiful in the e-commerce service-industry environment, when all the evidence to date suggests that what e-commerce is doing is fragmenting service monoliths into highly-honed niche operators that can cut out distributive dog-legs in the market and empower consumers as never before.
A case can be made (not that it would be by Barclays) that the Internet will change the distributive patterns of financial services to such an extent that rural branch networks become an irrelevance – hence the closure programme. But a monolithic bank such as Barclays can’t hide from the army of nimble online providers that are poised to nibble and bite at its market share. Barclays is on the run from e-commerce and its very size is against it.
But there is one aspect in which the “big” campaign is right on the money. And it’s intriguing to speculate whether Barclays has stumbled upon it unintentionally, or whether it has hunted with fox-like cunning (say what you like about Middleton, he’s not short of cunning).
To follow Barclays’ campaign to its logical conclusion, if “big” is good, then “bigger” is better. Barclays is not the biggest UK retail bank, trailing both HSBC and Lloyds TSB (the jury’s out on NatWest until the Royal Bank of Scotland merger and rationalisation is complete). If “big” is as great as the Hopkins ad would have us believe, is Barclays saying that further consolidation in the industry would be the logical next step? If so, its current ad campaign is effectively a very big “for-sale” sign.
If that’s not Barclays’ intention, then its marketing strategy may be an even bigger mistake than recent cack-handed events suggest.
George Pitcher is a partner of issue management consultancy Luther Pendragon