It’s been a strange few weeks, I don’t think I’d ever have thought people would have actually thrown parties for Margret Thatcher’s passing (I know plenty who threatened), nor would she have a funeral as expensive and as grandiose as Churchill’s. As an icon of the 80’s and according to a lot of the, rather complimentary documentaries that seem well prepared for her passing – she has been attributed with everything from privatisation to the birth of free enterprise, economic liberalisation and entrepreneurship in the UK.
My experiences a few months ago, with large companies looking to improve and the feedback from the process just last week has left me wondering why big companies always fall short of what they want to achieve…
So as an icon of the 80’s leaves us, maybe we should examine what happened, in the UK at least. Much of the UK infrastructure at the time had been privatised through successive governments as had been many industries that had hit difficulty but also employed a lot of labour.
If you nationalise to create universal infrastructure that supports the growth of an economy, this can really be seen as a success. Take power for example, at the time of nationalisation the systems were disjointed with different plugs used around the country. Following nationalisation, standards were introduced and the National Grid created.
Now of course, following privatisation you watch the energy companies make huge profits, have poor customer service, mainly reside in foreign hands, pay little UK corporation tax and instead of saving or paying into funds for infrastructure renewal – agree with regulators that they can put their prices up to pay for infrastructure renewal!
Personally, I think that gets to the point where the business should fail and be nationalised. If your company is in business to provide infrastructure, then if you fail to invest then you should go out of business. If any other private business put its prices up to maintain an infrastructure that was gifted to them, customers would leave to competitors, but due to the monopolies of utilities and the inhibition of true competition in regulated markets this doesn’t happen.
Where privatisation has worked, has been the likes of Rolls-Royce, British Aerospace – innovative businesses with reliable customers and good products that provide some degree of differentiation. These businesses, like many of our suppliers are often held up in high regard as being dynamic and innovative. Sometimes their marketing power often tells a different story to the realities of being their customer.
Big companies or organisations, regardless of whether they are state owned or nationalised are simply a nightmare. You want proof? When was the last time you thought, mmm I really found it easy to deal with my bank, my power company, my water company, the NHS, HMRC, Dell, Cisco, Microsoft, the airlines!
Big company syndrome is a very real issue; internally they talk about empowerment, letting people make decisions. One of the industries that is quazi-nationalised that I am close to is going through one of the many empowerment drives that they do every ten years or so (usually after a management refresh who need to show they’re trying to bring-in change).
Of course, no change will happen. Fred will still be pressing the button in the factory, day-in, day-out, he doesn’t really know what it does or what it’s for other than if he doesn’t hop on one leg around the factory ten times before he presses it he gets told off by his manager. He believes he can be more efficient without the hopping, but is too afraid to tell his manager in case it causes problems for him.
The new company management want to check that the new initiatives are working so they employ a team of consultants to interview the staff. They get Fred in, and interview him. Fred explains what his frustrations are, except Fred being a guy who is very technical, knows his hopping and knows his button – explains in technical terms, that he is jumping single legged around the building structure in order to activate the widget manifold actuator. He is very clear that this single legged jumping is a waste of time and effort.
The consultant takes this away, tells him they’ll get some feedback which will be consolidated with everyone else’s and the directors will look into and address it. Fred thinks – great, his hopping days will be over. He know fine well that his immediate line manager knows the problems with hopping and how inefficient this will be, but also knows that his own line manager is scared of his immediate line manager – he doesn’t want to make a change to the business because this is the way things have always been done.
Feedback day comes, senior management get everyone in – Fred is there, excited. However, the presentation shows that they have understood his problems and the problems of other people doing the same job as him but don’t really understand the detail. So the company plans to introduce pogo sticks. Pogo-sticks don’t solve Fred’s problem and he goes back to work, hopping mad.
It’s ultimately not the consultants fault, they have achieved what they set out to – even what they agreed with senior management. Senior management have something to appease shareholders too. The only person who doesn’t get what they want is the guys in the front line, who still can’t get out of their head that their managers know exactly what the problems are.
Candour maybe doesn’t get you liked by your managers, but it is necessary for businesses to thrive – big business syndrome usually sets in when there is a disconnect between the owner and shareholders and the actual people in the business doing the work at every level. Ultimately you’re seeing the proof of this with the likes of Michael Dell attempting to take Dell back into private hands, why people campaigned for Virgin Trains rather than First Group to keep the West Coast franchise. However, I suppose private and public companies is a completely different argument!