Beware of town houses with Bond Street addresses: head offices can damage your wealth
CHRISTOPHER FILDES
The new chairman walked into his office and took an instant dislike to it. 'I got a stiff neck looking at the fireplace,' he explained. 'It had a chimney-breast on one side and not on the other. There was not a square room nor symmetrical angle, nor a decent piece of furniture in the whole building. I determined that all this should be changed.' Oliver Lyttelton, later Lord Chandos, alternated between serving in Churchill's governments and chairing AEI, Britain's biggest electrical company, and commissioned a knighted architect to design a new head office on the lines of a ducal town house, across the road from the gardens of Buckingham Palace. Much space was taken up by its imposing entrance hall, and strict rules controlled access to the roof, so that unsuitable eyes would not stare over the Queen's garden wall. As time went on, AEI lost its way and was taken over by an upstart called Arnold Weinstock, with his own ideas about head offices. He had moved GEC out of Magnet House. its 2,000-seater palazzo in Kingsway, and into a nondescript building in Stanhope Gate with room for no more than a hundred people. His next move was on English Electric. The ruling Nelson dynasty had commissioned English Electric House on the lines of a corporate fortress, built it on the site of the Gaiety Theatre and adorned it with two rather off-putting male statues, representing Power and Light. Weinstock rolled all three companies together, disposed of the town house and the fortress and most of their inhabitants, too, and ran the combined business out of Stanhope Gate for the rest of his long career.
Handy for Hermes
THIS utilitarian office, adorned only by some pictures of his racehorses, was Weinstock's powerhouse. Managers jumped at his telephone calls or sidled nervously in to have their performance checked against their budgets and to be made to hand over any surplus cash. A visitor described the furniture as sparse, cheap, functional and slightly tatty. It would never have done for Lord Chandos, and it would not do for Weinstock's successors. They thought that they — and, of course, the company, too — deserved something grander. The new team, led by the newly ennobled George Simpson, changed GEC's name to Marconi, to suit its new identity as a leader in the world's most glamorous industry, telecoms. Those were the days. Then they looked for an office to suit, and found one in Bond Street: the handsome post-war building first commissioned for Time and Life, with a Henry Moore sculpture on the side. If there was no garden view from its roof, it could at least offer lunch-time excursions to Hermes on the ground floor and Sotheby's across the road.
Everyone must go
NOW Marconi's 44,000 square feet of prime space is on offer as part of this unhappy company's general clearance sale. The shine has come off telecoms, here and around the world, the cash pile that Weinstock built up has been replaced by a debt pile, and the shareholders (he was the largest) have, in effect, lost their money. The creditors may have lost quite a lot of their money. Barclays, Lloyds and HSBC have all made provisions against their exposure to Marconi, and now they and the bondholders are taking control. This week a deal seemed to be imminent. When it goes through, Derek Bonham, the caretaker chairman, will move over and Marconi will move out of Bond Street. The search is on for a smaller office in a less central and less glamorous location. A telephone box might do.
Fill from the top
WHAT a head office must have is a desk for the chief executive, another desk for the finance director, and a chair for the chairman to sit on if he happens to look in. Anything more than this is optional and may be a distraction, as experience has so often shown. (The examples cited by C. Northcote Parkinson were •St Peter's and New Delhi.) I am alarmed to watch three banks contending with each other to build towers in Docklands, as if they were burghers of San Gimignano and had to show off to each other. Buildings like this so quickly fill up. In no time the marketing department is hiring more staff and engaging consultants in the cause of refining the offer — by which they mean giving the customers things they might like, as opposed to the things they enjoy. As for personnel, it now wants be known as the global human resources resource, and is busy with career development (moving people around as soon as they have been in their jobs long enough to make themselves useful) and the work-life balance. Compliance can occupy several floors. Somewhere in the building, someone is still trying to run the business, or so we must hope. If he can keep his eye off the chimney-breast, so much the better.
Taking the waters
THE river Ebro is to Spain what the National Health Service is to the United Kingdom. It is free at the point of delivery, so the demand is unlimited, and governments throw public money at it in a hopeless attempt to catch up. The Spanish government wants to invest 1.15 billion in waterworks which would channel the river's waters to the parched south. A third of the money would come from Brussels, so guess whose it would be? Heretics in Madrid say that Spanish farmers do not pay for water, and argue that if they did, it would curb the demand and finance the supply. No chance. No wonder Professor Tim Congdon warns that Europe's governments are on the way to absorbing threefifths of their countries' output in taxes, with Gordon Brown puffing behind them. Paying too much tax, Tim Congdon says, is bad for you. I will join him at the stake.
Willing Sellar
FORD Sellar Morris was one of the property companies — there were many — which collapsed in the 1990s. Now it has at last been tidied away into liquidation, and the only winners, as usual, are the Inland Revenue. Already Irvine Sellar, its undaunted guiding spirit, has bounced back with the Sellar Property Group to promote the 'shard of glass', at London Bridge, which would be the tallest building in Europe. How the property cycle goes round. Ideal for the chairman who wants a sky-high head office.
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