“No transactional advantage…” What did Liam Fox mean by that?

October 16, 2011

The phraseology “no transactional advantage” was used by Defence secretary Liam Fox this week in his address to the House of Commons. It caused much debate and puzzlement among commentators. We look at it from the perspectives of motivation and leadership theories

The political story in the UK this month [Oct 2011] has been that of a relationship between Liam Fox and his close personal friend Adam Werritty. The media and opposition politicians sensed inappropriate behaviour and possibly financial malpractices.

Fox attempted to deal with his critics by a statement to the House of Commons of less than crystal clarity. Mr Werritty, he stated, was “not dependent on any transactional behaviour to maintain his income

Bill and Monica?

For want of a better explanation, some critics connected it with Bill Clinton’s wriggling over his relationship with Monica Lewinski, and whether he had ‘had sex with that woman’. Fox, it was presumed, was selecting his words so cautiously because he was unable to give a straightforward answer to a straightforward question.

Or was it Business School speak?

Another reading is that Dr Fox had begun speaking in tongues, and particularly in Business School speak. As every MBA is taught, transactional behaviour is the posh term for a leadership style found when a leader operates mainly my simple arrangements involving economic expectations (“If you do that for me, I’ll do that for you”). A more popular term is carrot-and-stick leadership.

New leadership and its transformational style

A leader relying on transactional behaviour was found to severely limit the possibility for influencing others through motivating and inspiring them. That according to new leadership theory required a transformational style. So, Dr Fox might be interpreted as saying “Adam Werritty did what he did out of loyalty to me, influenced solely by my transformational leadership skills.

Transformational gambit or Lewinski defence?

So we have two ways of interpreting the mysterious statement made by Liam Fox. The one might be based the offering of the transformational gambit. The other is a variation on Bill Clinton’s Lewinski defence. “There were no financial exchanges between that man and me.”

Lewinski gambit accepted and refuted

A few days later, it was the Lewinski gambit which was accepted and refuted. The Telegraph account summarised what happened:

The Defence Secretary announced that he was resigning [15th Oct 2011] after disclosures showed Mr Werritty’s activities were funded by companies and individuals that potentially stood to benefit from Government decisions.
Within an hour of Dr Fox stepping down, the venture capitalist Jon Moulton, who provided money for Mr Werritty, said the Defence Secretary had asked him to give cash to his friend’s firm. It is understood that an investigation into Dr Fox’s dealings with Mr Werritty by Sir Gus O’Donnell, the Cabinet Secretary, had concluded that his position was untenable.

In a letter to the Prime Minister, Dr Fox repeated his belief that he had “mistakenly allowed the distinction between my personal interest and my Government activities to become blurred”.


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