In any working democracy there is always a balance of powers between different groups that ensures no one group becomes too pwerful. In the UK there is parliament, the government of the day, the crown, the church, the police, the public sector, civil servants, judges, the City, the big corporations, the press, the BBC, the military, the mob, and others. Some of these are not really one single power base, rather they are a collection of power bases that, if this was a serious article about power, would be differentiated. Some power bases have a lot of power, others have relatively little – I’ll let you choose which.
In the UK recently, several of the power bases have been given a really good kicking: parliament over expenses, the City and Labour party – who were the government of the day – over the economic crisis, and now the press over phone hacking. Some power bases seem to get a less severe but regular kicking, the church, the BBC, for example. Is the kicking ‘good’? Yes, if you think all power groups need bringing down to size every now and again. Has the kicking worked? The banks don’t seem to have reformed and, in the City, it is mostly business as usual, but the Labour party are probably unelectable for a generation or more. And the press? People are talking now about a sea change in the ethics of the press and woe betide any editor who gets found playing anything other than a straight back. But we will see. The press has promised change for years and found ways to wiggle out of it.
So why are we talking about this in a blog about business and learning. Well, as a result of the phone hacking scandal the biggest newspaper, the News of the World (aka the News of the Screws) in the UK is closing after 168 years in business. Several hundred people will lose their jobs. The press power base is weakened. And an apparently successful business has ‘failed’. Why?
There are many web sites for example 1 and 2 which offer reasons for failure such as poor cash flow management, not meeting customer needs, poor planning, etc. But there is an excellent book by Jim Collins ‘How the mighty fall’ which describes a 5 step process that leads to company failure that is almost a perfect fit with the failure of the News of the World. The first step is ‘hubris’. When you are successful, when you think you can’t fail, you develop a high degree of arrogance and then you fail to look deeply at what you are doing. The failure of the News of the World began with the hubris of top management; they failed to see the monster thay had created in the culture of the company. Sadly, in closing the business, top management will survive and it is the employees who will suffer.
So, bquest clients, BEWARE hubris! You must develop the mindset, systems and tools which force you to look objectively and critically at what you do. Don’t, and you will suffer.
PS In ‘How the Mighty Fall’ Collins does note that some businesses manage to overcome the initial impact of hubris and use their crisis as a springboard to make radical changes for the better. We won’t see the News of the World again, that business is gone, but maybe its parent company, News International, will use this crisis as an opportuntity to reform itself. Maybe. But don’t hold your breath.