emo to the great back-office empires: try economising on yourselves
Afriend of mine on the board of Bigfours Bank — no names, no pack-drill — proposed to abolish the human resources department. The department would never propose this itself but the savings, so he said, would be fantastic. The direct costs alone would be worth a ha'penny on the dividend, but the indirect costs saved would dwarf them: boxes not to be ticked, memos not to be answered, meetings and conferences not to be attended. Local managers would be permitted to take on resources, or staff, for themselves and work out how much they would need to be paid. In this way (my friend argued) Bigfours, chronically understaffed in the south-east but with people queuing up for jobs in Gateshead, would be brought back into balance. Bank boardrooms are conventional places, my friend's proposal was voted down, but his thinking lives on. Barclays and HSBC both plan to put more people on the front line, where the customers are, and fewer in the second echelon, with the human resources managers economising on themselves. Somewhere in the banks' folk-memory must be buried the seeds of nostalgia for a simpler age, when these swollen empires were still known as 'Personnel and the work could be done — as Robert Townsend urged in his subversive classic Up The Organisation — by a sensible girl with a sharp pencil.
Grow by the rules
Now the organisation has hit back. the rules are a labyrinth and expert guides are needed. Ministers and Eurocrats are happy to make work for them. Their instinct to regulate and complicate marches with their instinct to be generous with other people's time and money, and their influence spreads far and wide. A test case is now being fought to establish whether an investment banker can plead sexual discrimination because she was asked to sit on the jumpseat of the corporate jet. In Sir Brian Pitman's heyday at Lloyds TSB, he was sometimes asked if he would like to buy a bank in France. He disavowed any such ambition. Experience there had taught him not to try to run a business in a country where you could not fire people or, if you did, they would still expect to be paid. His successors may find that they live in just such a country, and the only certain winners are — but you guessed it — the human resources departments, living and growing by the rule-books. No wonder that, until now, they have seemed to be fireproof.
This way out
There are costs to all this, as my prescient friend at Bigfours was the first to realise. They may price work away from this country, to the benefit of Guangzhou and Bangalore. They may kill off services which were no more than marginally profitable, like the four dozen branches now being closed by Alliance & Leicester. Now Barclays and HSBC hope to show that better-staffed branches will bring in more business and that costs can be saved in the back offices. Their examples will be watched in boardrooms across the country and, of course, in the empires of human resources. I am sure that in managing their own departures, these imperialists will tick all the right boxes.
Lloyd's-on-Sand
This is where I came in. Ian Hay Davison arrives to sort things out and to set standards. This upsets the old guard, who like things the way they are and can't see what is wrong with them. The pressure builds up, an explosion follows, he leaves, the old guard relaxes. . . . It happened, two decades ago, at Lloyd's of London and now it has happened again in Dubai. which is trying to set itself up as a financial centre and had drafted him in as regulator-in-chief. He was concerned about possible conflicts of interest on the new centre's governing body, but seems to have been told that, in a small place like Dubai, with a gene pool to match, things were different. Oh yes? At Lloyd's he had thrown out enough rotten apples to make him wonder if something was wrong with the barrel. Soon enough his fears were vin
dicated. Lloyd's ran into every sort of trouble and came close to ruin, and the job of cleaning and reconstructing the barrel had to be done all over again. I used to say that Lloyd's motto, officially Eiducia — trust — was really E cosa nostra: it's our business. If that turns out to be the Dubai gene pool's motto, it will do nothing to inspire trust in Lloyd's-on-Sand.
Going to Hull
Philip Green is a sensitive soul, and emits cries of 'Oir when offended, so I hope he will allow me to compare him to the Hull, Barnsley and West Riding Junction Railway and Dock Company. He has done for the shareholders of Marks & Spencer what this venture did for the merchants of Hull. With a monopolist's grip on the traffic to and from every port in its territory, the North Eastern Railway had become complacent and needed, so the merchants thought, to be woken up. They promoted a competitor, which tunnelled through the Yorkshire Wolds and, as its historian says, had served its purpose on the day that it opened. The North Eastern woke up, saw the Hull & Barnsley off and went on to take it over. Mr Green's threatened bid woke M&S as if from the dead. Out within days went the absentee chairman and the miscast chief executive, the revolving door on Baker Street has not stopped whirring, and the investors who valued the shares at £2.60 only a month ago now seem to think that £4 is not good enough. Of course, if M&S nods off again it may lose the traffic for good.
Moving story
Top story in the Financial Times: 'Tony Blair moved quickly yesterday.' Aha, says Captain Threadneedle, my racing correspondent: he must have got over his setback in training, he seems to be striding out well. I have to explain that the phrase has acquired a new meaning. 'Move to' is spinspeak for wishful thinking in action. Thus, ministers move to distance themselves from allegations of cronyism. Companies move to play down reports of feuding in their boardrooms. Downing Street moves to reassert control of the agenda, and inconvenient realities are moved away. The FT's faithful message was that the Prime Minister would sell the European constitution to the voters. He would, of course, first have to move us to buy it.
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