Category Archives: Management

British Efficiency?

“The three-martini lunch is the epitome of American efficiency. Where else can you get an earful, a bellyful and a snootful at the same time?”
US President Gerald R. Ford, Chicago 1978

Nick Denton has written an interesting piece on The myth of American efficiency, and it has motivated me to write about a similar subject, one that I’ve been thinking about for some time and might be called The myth of British resistance to change.

I moved to the UK ten years ago, in April 1992, and I’ve been thinking about the changes I’ve seen take place here during the last decade. The changes I have in mind are those that have occurred in the frequent, ordinary activities that fill daily life, and upon reflection I’m surprised to find they all appear to be positive improvements. Of course, this is very much a personal view, and other residents of the UK may not appreciate these changes to the same extent.

Retail Banking

I moved to Britain after accepting a job with a classical music agent in London, and one of the first things I needed to do was open a bank account. I visited my local branch of Barclays Bank thinking it would only take a few minutes to apply and deposit my savings, but quickly discovered that in Britain banking was not so simple. In addition to a lengthy application form, the bank required a letter from my employer confirming my employment and six weeks in which to process my application!

I couldn’t believe this inefficiency. A few months earlier in Toronto, I had opened three accounts at the same bank within 15 minutes. I complained to my employer’s accountant about the British delay, and she kindly called the manager at the company’s bank (a different bank in a totally different part of London) who provided me with a chequing account by the end of the week (still poor service by Canadian standards).

(As an aside, I had a Kafkaesque experience a few years later when I returned to university. I negotiated a government-sponsored loan through Barclays Bank, which agreed to lend me the money on condition that I open an account. I did so immediately, and had access to the loan within two days. So whereas it took six weeks to deposit money, it only took 48 hours to borrow it!)

Ten years later, the vast majority of my banking is done electronically and the last account I opened was done so on-line without talking to a single bank employee. I now pay all my bills using the telephone or internet, only visiting a bank on the very odd occasion when someone sends me an increasingly rare cheque for deposit.

Retail Food Industry

Food retailing has been very competitive in the UK for years, but technology has really improved its customer service recently (see my previous blog on Re-engineering the Grocery Shopping). So much so, that I rarely visit any of the large grocery stores anymore (What bliss this is! I can’t tell you how much I appreciate not having to waste time shopping!).

Telephone Bills

Ten years ago it was difficult to obtain an itemised telephone bill in Britain. Not only was it a special request, but all calls costing 40p or less were lumped together anyway. You could only obtain specific information about expensive, usually long-distance, calls. Now I can view my telephone bills on-line, including all the information about every single call, and pay them automatically via direct debit. The process has become truly paperless. I can even download all the information and manipulate it to my heart’s content in my electronic spreadsheet to obtain a complete picture of how I use the telephone. We’ve gone from one extreme to the other; from not enough information to almost having too much.

Arts Marketing

When I first moved to the UK, arts organisations used to charge £5 annually for the privilege of adding you to their mailing list! Consequently, I did not subscribe to any such lists. Now, having obtained my name and address when I purchase tickets, they send me brochures and pamphlets regularly for free. It took them a while, but British arts organisations now understand the need for self-promotion and they are beginning to learn how to do it. Fund raising will be next.

In all these ways living in Britain has improved. No doubt there are others as well. I know that many people complain about the deterioration in transportation and educational standards here, but these issues rarely affect me. Perhaps the key, no matter where you live, is to be selective. Seek out those things that work well wherever you are, and avoid those activities that don’t work until they get better. Now I know why I don’t own a car!

The Economics of Bread

“Bread is the warmest, kindest of words. Write it always with a capital letter, like your own name.”
Russian café sign

Sometimes modern economics amazes me. Why are air fares so complicated, for example? One-way flights are often more expensive than a return journey. Why is it cheaper for me to fly to Nice than take a peak-rate train to Chippenham in Wiltshire (both 90-minute journeys)?

Yesterday, I bought a loaf of bread in my local grocery store (not one of the big national chains) that had been made in Toronto, Ontario! I didn’t realise this fact until I read the details on the packaging, after having eaten some of it. How on earth can it be cost effective to import this bread from North York (the suburb of Toronto in which it was made)? Surely there must be a closer and cheaper alternative?

Well, it turns out that the bread was made by the Manoucher Food Company, which appears to have been something of a phenomenon in the Canadian Food Industry (see this story in The Toronto Star). The loaf I tried was good, but I’m still amazed that it’s necessary, and economically worthwhile what’s more, to transport this perishable product more than 3,000 miles across the Atlantic Ocean.

Having just checked the receipt, I now see that I paid £2.19 for that loaf. Ouch! I’m not in the habit of checking prices before I buy food, but perhaps I should start? Given the important role bread has played in history (in France the price of bread is still set by the government, thanks in part to the likes of Marie Antoinette), the existence of this expensive, luxurious import is quite telling. What a rich world we now live in, although it’s interesting to note that Manoucher doesn’t export to France yet!

A Personnel Revolution

“In an industrial society which confuses work and productivity, the necessity of producing has always been an enemy of the desire to create.”
Raoul Vaneigem, The Revolution of Everyday Life, 1967.

I am currently reading The East End of London by Millicent Rose (1951), which is a very interesting book about the history of London’s East End. In the chapter on the construction of the docks, she writes:

With the building of the docks, the Industrial Revolution came to the East End and transformed it. When work is done upon such a scale as Mayhew describes, the employers (not individuals now but a company) and those whom they employ exist together without either acquaintance or mutual responsibility. The works of Rennie, Alexander, Telford, with all their grandeur, have an oppressive and terrible impersonality that fits the new relation of man to man. Alexander looked back to the glories of Rome, but his creation inaugurated the pitiless anarchy of the nineteenth century.

What a shame that the industrial revolution had this effect on personal relationships. It’s legacy is still a problem today. My wife recently received an incredibly impersonal e-mail from the Chief Executive of the company that has employed her for more than a decade, a man she has met many times and with whom she is on a first name basis. His generic form letter was not addressed to anyone (it just arrived in her inbox without any recipients listed), and asked her to participate in a collective exercise intended to identify the company’s values!

How about uncaring, careless and lazy, for starters? The CEO’s message probably reveals more honest information about the corporate value system than any collective exercise will unearth. It is particularly worrying when you consider that this exercise is almost certainly an initiative of the Human Resources department, which should care more about the employees and how they are treated than any other part of the company. When will they learn that everything the company does is an expression of its values? When will they realise that their values are therefore plain for all to see in everything they do?

A Kinda Harman Kardon

“Workers of the world forgive me.”
Graffito on the bust of Karl Marx in Bucharest in 1990.

Here’s an interesting article from this week’s Economist (Are Sidney Harman and his kind the answer to America Inc’s woes?) about the management style of Sidney Harman, founder of Harman International (i.e. maker of Harman Kardon stereo equipment among other things). It seems the idea of improving business productivity by attending to the workers might be making a come back.

At the sound of the beep…

More from that Economist survey:

Some employers handled last year’s job cuts in remarkably insensitive ways. For example, at Cap Gemini, a software firm, employees were informed by voicemail that they had lost their jobs.

This would probably happen more often if more businesses knew how to operate their voicemail systems!

The Theory of Business

“It is so stupid for modern civilization to have given up believing in the devil when he is the only explanation of it.”
Ronald Knox 1888-1957

Regular readers of this page (are there any?) will probably realise that “the theory of business” is a recurring theme. That’s partly because I have an MBA, which despite its reputation can be a highly theoretical degree in places, and also because my most recent former employer is the worst managed business I have ever come across. So every time I find new information about how businesses should be run I find it particularly interesting.

For example, this week’s edition of the Economist includes a Survey of Management (subscription required). As the introduction says:

This survey suggests that the core of good management is a set of three old-fashioned virtues that were often forgotten in the bubble years, when anything seemed to go. At a minimum, good managers have to meet the following criteria:

  • be honest;
  • be frugal;
  • be prepared.

As is so often the case with business theory, this statement makes simple common sense, and I can’t help comparing it with my personal experience.

My former employer is incredibly old-fashioned (not surprising for a business founded in 1766), but lost sight of these principles long ago. It is not honest with customers or staff; it is extraordinarily wasteful, which is one reason why it is not very profitable (it actually made a loss in 2001); and it is rarely well prepared, which is why many business decisions are knee-jerk responses to fast moving events.

Had I known this was the case I would never have accepted the job offer, let alone promotion. How do you determine if a prospective employer subscribes to the Economist’s principles before it’s too late?

Just so you know what I mean by “old-fashioned” in the post above, BBC Radio has just announced that the British House of Commons has agreed that female Members of Parliament and staff will be allowed to breast-feed infants (with certain restrictions). My former employer only allowed women to wear trousers in 1998, at which rate breast-feeding should be permitted sometime around the year 2230!

Performing poorly?

“The secret of happiness is freedom and the secret of freedom is courage.”
Thucydides c.460-c.400 BC

Today’s Financial Times has an interesting article by columnist Peter Martin about the latest research on the cause of poor corporate performance: Don’t blame the industry. The researchers were attempting to determine whether or not an industry’s fundamental economic structure might account for the lion’s share of poor performance. Peter Martin writes about the implications of their research for individual managers and concludes with:

If you are working for a company in a tough industry with a management that does not appear to know what it is doing, consider taking another piece of Warren Buffett’s advice: “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

Who’s right and who’s wrong?

It’s amazing how dirty the word “socialism” has become. My dictionary defines it as “the belief that the state should own industries on behalf of the people and that everyone should be equal”. But here’s Digby Jones, Director General of the Confederation of British Industry, commenting today on a leaked European Commission draft proposal to extend temporary workers’ rights:

The flexibility of the labour market…could be under serious threat from this. It’s depressing that Europe decides it’s going to try and bring everyone down to some sort of low common denominator…It’s socialism coming straight out of Brussels,” he said. (For more see Bosses warn against rights for temps.)

Which part of the definition do you think he means? Since the EC proposal does not promote state ownership, he must be referring to the part about equality. The EC is for it; he’s against it.

And yet this month’s edition of the Harvard Business Review contains an article (see They’re Not Employees, They’re People) by the dean of all business gurus, Peter Drucker, which is summarised as follows:

In this essay, business thinker Peter Drucker examines the changing dynamics of the workforce ? in particular, the need for organizations to take just as much care and responsibility when managing temporary and contract workers as they do with their traditional employees.

Those seem like opposite points of view to me. So who’s right? Common sense tells me Drucker. So what’s wrong with Digby Jones? He clearly has not read his copy of HBR!