Sir Fred Goodwin and the toxicity of guilt

March 3, 2009

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Sir Fred Goodwin’s payoff has filled the Nation’s headlines. Popular opinion in the UK has developed into an outburst of rage against those guilty of triggering financial losses for others and yet who seem to have escaped relatively unscathed themselves. But can guilt and blame be disentangled so simply?

A public fury rages on over fat cats responsible for our economic woes. Someone must be responsible. Someone must be made to pay. A culprit must be found, and quickly to make an example to the others. As Richard Donkin also noted, it was the libertarian philosopher Voltaire who satirised the strategy of finding a culprit for public execution when things went wrong. Candide learned that killing an admiral from time to time is good, ‘pour encourager les autres’. More recently the theme was reworked in an episode of Blackadder, a much-loved TV series in Britain, where a senior officer announces to a hapless aide that the time had come for a futile heroic gesture.

Sir Fred seems a suitable culprit for the moment, although rather like Blackadder, he is understandably reluctant to participate in the gesture. The case for the prosecution before the high court of public opinion runs as follows: Goodwin (almost always referred to at present as Fred the Shred) was in charge of Royal Bank of Scotland (RBS) which carried out a takeover (ABM Ambro) which eventually went very badly wrong. There were financial commentators at the time suggesting it was a risky strategic move. The kindest explanation on offer was that Sir Fred had acted out of megalomania. He was at the time considered a brilliant financial leader a reputation earned particularly during the earlier successful hostile bid by RBS for Nat West (National Westminster Bank).

Hero to zero and leaders we deserve

That was then. Somehow public mood swings have a symmetry to them. The greater the hero, the more a subsequent judgement swings to the opposite extreme. Sir Fred has more recently acquired the epithet of the worse banker in the world. Perhaps worth mentioning. If so, there are very interesting questions also worth considering about how such a specimen went from strength to strength over such a long period of high office.

Tempted though I am, it is too great a leap of explanation to wrap it up in the bald statement that we get the leaders we deserve. On the other hand, that notion makes at least a reasonable point from which to get beyond the assumption that public opinion once duped has now discovered its previous blind spot regarding towering imposters such as Fred Goodwin.

The toxity of guilt

Here’s another idea. It is, at least, a new way of looking at what might be going on. The current explanatory vocabulary of the credit crisis repeatedly relies on the metaphor of toxicity. Like many figures of speech, it helps us dress up a strange concept in familiar garb. Yes, toxicity. That’s what it is. The economic system has gone toxic.

But as with risk, the systemic toxicity is hard to isolate and destroy. It ducks and weaves. It is distributed and embedded in countless subtle ways. Wait a minute – who signed off the loan? Where were the directors. Why didn’t the Government know. And Robert Peston. Surely he must have known. Then there’s Gordon Brown. Not enough, then, to encourage the others in future. We must act promptly. First Sir Fred, but then the others. And (lest I forget) what about all those Business School Professors who taught all those finance courses, and dreamed up the modern theories of derivatives? That’s more like it. Drastic action is called for. How else can we save the body economic?


Prime Minister Brown – At last, at long last

June 28, 2007

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Tony Blair exits after a last Prime Minister’s question time. The house settled for a dignified and good-humored farewell. Rumors leak out of names in Gordon Brown’s cabinet, and of a new job for Tony Blair.

Today’s political comings and goings are recorded for posterity in infinite detail. The leadership transition is now beyond the control of any one person. The ritual kicks in. It is worth noting, as it is a relatively rare event. The essential features for a century or so is that the incoming Prime Minister is received by the Monarch, is invited to serve, and accepts, almost always without hesitation. Sometimes it is possible for this to be preceded by a visit from the outgoing PM to hand in the bunch of keys and Rent Book for No 10 Downing Street.

Goings on at The Palace

In today’s ritual, the ceremony unfolds with TB being driven to Buckingham Palace in the Prime Ministerial vehicle, spending an hour with the Queen, and leaving as ex- Prime Minister Blair, in a more modest car. Conversely, Gordon arrives in a humble People Carrier, meets the Queen, does the business, and returns in the swanky Prime Ministerial car and with the keys and rent book for No 10.

The traditional speech on the steps of No 10. Slightly creepy because the area is mostly clear of people for security reasons. Prime Minister Brown predictably speaks of ‘doing his utmost’ (a translation of a school motto?).

The last and first leaks?

Possibly the last leak of the Blair administration. The rumor was right. Before the day is out, Tony Blair is to resign his Parliamentary seat and take up a job as special envoy to The Middle East. His mandate is particularly to assist in a resolution to the Palestinian issue, on behalf of the UN, EU, America and Russia.

Seems Tony mentioned it in a telephone conversation to his old friend Bertie Ahern. Bertie blabs to the press. These are two men who kept schtum with many a secret during years of delicate negotiations over the future of Northern Ireland. But this is what happens when demob-happiness kicks in.

The new manager draws up his team sheet

Meanwhile, in the quiet of his new manager’s office, Gordon completes the names on his team sheet. Even without Bertie’s help, more rumors trickle out. The late-night editions of tomorrow’s papers speak confidently of some names and appointments.

There have been more rumors of surprises on the team-sheet. We will have to wait just a little longer for the names, and the positions in which they have been selected to play.

A new job for Alan?

An obvious rumor. Alan Johnson will have a nice consolation prize, after losing out to Harriet Harman in the deputy leadership battle. a more surprising rumor is of a new job for Sir Alan Sugar in revitalizing British Business Leadership. Possibly in Business Education. Now that will offer some scope in future posts on leaders we deserve.


Labour’s wannabe cheerleaders fail to convince in listless Newsnight hustings

May 30, 2007

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The candidates for deputy leader of the labour party do themselves no favours with disappointing performances in a below-par antiquated and amateurish Newsnight production. Alan Johnson and Hilary Benn do their career prospects least damage. Jeremy Paxton as King Lear is irritated and irritating. A night to forget.

BBC’s Newnight proudly trailed its coup of arranging the first televised debate of the Deputy leadership contest. All six candidates accepted an invitation to appear. The format, set, performances were all pretty dreadful.

Perhaps it was always naïve of me to expect anything enlightening from this kind of speed dating, although some viewers with a taste for black comedy may have found something in the show.

The candidates were each given two minutes for an uninterrupted pitch. This ended with all six standing uncomfortably behind a set of cheap-looking lecterns arranged in a shallow arc. In the next act, Jeremy Paxton asked a series of futile questions. This was followed by the trick or treat game ‘You’ve got to answer YES or NO’ or you will be shown up as the buffoon we all know you really are’. This is usually great fun, because everyone knows that the questions can’t be answered Yes or No. So mostly, the contestants cheated and offered qualified Yes or No replies. At one stage someone answered with a firm Yes, which seemed a surprisingly adequate response.

Tiring of the lack of gratification from this extended play, Jeremy made a remarkable triple-lutz kind of technical move, announcing that he was going to ask each of them in turn a philosophical question. Through some kind act of personal psychological protection I can recall neither question nor the replies it generated. By this time Hilary Benn and Harriet Harman were draped miserably over their flimsy barriers, and Hazel Blears had almost disappeared behind hers.

Overall impact

It would have been an astonishing performance for any candidate to have risen above the nightmarish situation they found themselves in. In a briefer extract from an earlier event, Hazel Blears had seemed to be the most impressive, speaking with warmth and intelligence. These qualities were not so much on view tonight. Jon Cruddas made a reasonable case for a role in which he would gee-up the morale of party activists. Peter Hain was far too weighed down with gravitas. Harriet unconvincing.

Hilary Benn was able, from time to time, to rise above the questioning with intelligent (but not too clever) replies. I thought both he and Alan Johnson offered the promise of something authentic if they were to be elected. Johnson will eventually be able to avoid mentioning postal deliveries. Benn is well on the way to escaping from being son of a loveable but strange dad.

If only

It would have been wonderful if any candidate had found a way of stopping the performance through some act of creative destruction. That would have shown something special. Would it really have been damaging to a political career? But it was not to be. Newsnight’s curiously banal format trundled on. And, yes, maybe I should have just switched off earlier. No wonder leading politicians are reluctant to accept invitations to appear. Newsnight is likely to be a mostly Gordon-free zone over the coming months.


Harriet works on her social identity

May 24, 2007

harriet-harman.jpgIn the soporific contest for Deputy leader, Harriet Harman finds a neat way of locating her social identity. In contrast, Hilary Benn struggles with his. However, Benn appears to be a more likely winner.

The battle for Deputy leader to Gordon Brown’s Premiership has been something of a low-key affair. BBC does its best to to pimp it up. We take a social identity perspective on the contest.

John Prescott, Tony Blair’s deputy, is leaving office. In the run-up to the election of JP’s replacement, the BBC’s Nick Assinger points to bookmaker Coral’s misreading of the gender of one of the candidates

“All the money today has been for Hilary Benn to win the Deputy Leader job and we have been forced to slash her odds dramatically”, said Coral’s representative.

Her odds? Not for the first time, Hilary is presumed to be a female name. We can only speculate on any career damaging consequences of such gender rendering.

Assinger also picks up on Harriet Harman’s efforts to define herself. This is actually an interesting issue which indicates how Social Identity approach has much to offer in leadership research.

She told a campaign hustings that Gordon Brown was Radio 4 while she was Radio 2. Make what you will of that – but perhaps it’s John Humphrys to Jonathan Ross. Fit the names to the stations: Alan Johnson, working class boy made good; Peter Hain, smooth former anti-apartheid activist; Hazel Blears, pint-sized cheerleader; John Cruddas, former Blair aide turned voice of the people and Hilary Benn, “modern” son of New Labour’s bete noire.

Social identity tips for wannabe leaders

It is important for a wannabe leader such as Harriet to work at her social identity. The concept has to achieve consensus regarding its elegant appropriateness. Novelty, interest, and (trickier) authenticity are valuable ingredients. Symbolism and metaphors are well-tested rhetorical and creative devices.

Harriet seems to me to have hit on a promising approach for communicating the image that she would like to convey during her campaign. Her suggestion neatly differentiates and defines her, not only against the other candidates but also against the all-conquering Gordon Brown.

[Note for non-listeners to The Beeb: Radio 2 is a pop channel; Radio 4 is seriously elitist].

Straw polls

The contest has not been widely reported in the British news media. I have only seen one broadcast, catching a snippet from a public debate involving all six candidates. Hazel Blears came across as the only one with that little bit extra in presentation style. The other five all seemed less able (or willing) to present themselves in an engaging fashion. I suspect that her style will not be universally admired.

On reflection, the impact of Blears’ presentation, was again, like Harman’s impressive in presenting her social identity, differenting herself for her commitment to the cause and her struggle to overcome diasadvantages in early life.

What the bookies say

Most commentators had been predicting that Alan Johnson remains a front-runner in the contest. He has already succeeded in presenting his own rise from disadvantaged circumstances as an asset, and important part of his social identity. Blear’s story came across as fresh partly because it was less well-known (at least to the majority of viewers learning more about some of the candidates).

The bookmakers offer aother perspective.

According to Sporting Life [May 24th 2007]

Hilary Benn has regained favouritism for the race to become the next deputy leader of the Labour Party.

Bookmakers William Hill have cut his odds from 5/2 to 2/1, making him joint favourite with Alan Johnson, who is also a 2/1 chance.

“After drifting out in the betting immediately prior to the announcement of the six contenders for the contest, Hilary Benn is back in favour with political punters and after a string of three figure bets we have cut his odds to make him joint favourite with Alan Johnson,” said Hill’s spokesman Graham Sharpe.

Hazel Blears is the 3/1 third favourite while Jon Cruddas is available at 7/1, Harriet Harman 8/1 and Peter Hain the 16/1 outsider

Somehow I can’t see any candidate gaining much ground through a charismatic performance between now and voting time. The voting is a three-way split between MPs (including Euro MPs), Party members, and affiliated Unions. The result will be announced on June 21st, 2007.


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