Can a country be run in a similar way to running a business? Does corporate leadership equate to political leadership? It would be possible to find examples in support of both these questions and as much evidence to counter them but the contextual difference is important to note when considering leadership in general.
A crucial difference in the two sectors is that the corporate executive or CEO must operate to the satisfaction of the shareholders, regardless of the humanistic and social veneer applied. A politician or a Prime Minister must serve for the benefit of the people, regardless of the political views held as this social obligation originates with the public office. Politicians have wriggle room not afforded to CEOs because not all the citizens subscribe to the same values. In the corporate world there is a clearly visible commitment to capitalism, a clarity not possible in the political world.
At the moment in England, it seems that the newly elected coalition government is starting to prepare for a social capitalism – capitalism with a human edge. The path to economic restabilisation will be difficult and, according to the newspapers on 8 June 2010, the government is set to call on the services of the former CEO of BP, Lord John Browne.
“…. was admired by his peers but not as much as he was by himself….” [who] “…As CEO … surrounded himself with sycophants and yes-men enshrouded in a cloud of corporate hubris.”
This may be de rigueur for the political world but if Browne reigned over a company that has been found to have had a fatally damaging corporate culture, is he the right man for the job?
The job description for Browne is outlined in The Age newspaper from UK sources:
“Former BP boss Lord Browne is being lined up to be a ”super director” of a team of commercial leaders, with the job of inserting private sector business practices into the heart of government.”
If this eventuates the Health & Safety Executive could be quaking in their safety boots. The Trade Union Congress is unlikely to be enamoured.
According tot he United Sates Government report (The Baker Report) into the BP Texas City refinery disaster which occurred during Browne’s time as CEO, Browne introduced the following corporate structure:
“John Browne, BP’s Group Chief Executive, developed the three primary foundations of BP’s organizational philosophy when he was in charge of BP’s exploration and production business. First, BP operates in a decentralized manner, with individual business unit leaders (such as refinery plant managers) given broad latitude for running the business and direct responsibility for delivering performance. Second, the corporate organization provides support and assistance to the business units (such as individual refineries) through a variety of functions, networks, and peer groups. Third, BP relies upon individual performance contracts to motivate people.” (page 27)
It may be that Lord Browne has radically altered his corporate approach since the Baker Report and his resignation from BP in 2008, and he may achieve what the Coalition government desires but the government’s judgement should be strongly questioned on this.
The Baker Report was very critical of the senior management levels of BP:
“….the Panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five U.S. refineries. While BP has an aspirational goal of “no accidents, no harm to people,” BP has not provided effective leadership in making certain its management and U.S. refining workforce understand what is expected of them regarding process safety performance.”
Curiously, around 12 months after the Texas City refinery explosion, Browne became President of the Royal Academy of Engineering.
Anonymous Whitehall sources are reported to have said that both:
“…Mr Cameron and Mr Clegg had both held meetings with Lord Browne and felt he was the best person for the job of marrying business principles with Whitehall policies.”
For those who have expected Nick Clegg, the Liberal Democrat leader, to humanise the harshness of conservative policies, this statement must be very disappointing.
Lord John Browne is a good example of how leadership is not the panacea that many, particularly in the safety profession, claim. For the UK Government to believe it has a mandate for radical change beyond its haemorrhaging financial structure is wrong and if it continues on this divisive policy path will create great social tensions. The Coalition Government needs a longer term perspective on change management and may need to brush up on the countries post-war rebuilding initiatives and mistakes.