LAST week I had lunch with a man who used to be one of the most senior bankers in the UK. The trouble with business today, he complained over coffee, was that there was no common sense any more. Such sense, he insisted, had always been uncommon — but now was extinct.
In banking he is on to something. Complexity mostly destroyed what little common sense there used to be and regulation has outlawed the rest. Try understanding any bank’s annual report. It cannot be done. Even the senior bankers who put the figures together admit as much. Worse still, try to comprehend Solvency II. If there is anyone reading this who fully grasps the fiendish vicissitudes of these new capital requirements for insurers, I’d like to hear from them.
But what about other businesses? Has common sense vanished there too?
Just as I was wondering, the Harvard Business Review landed on my desk. I opened it and chanced upon an article called ‘Managing your mission-critical knowledge. How to identify, map, and leverage some of your company’s most strategic assets.’ This makes such a meal out of an idea that is perfectly sensible — companies ought to work out what exactly it is they know — that I defy anyone to grind through it.
The reason common sense is squashed in this way is insecurity. Most people in business live in fear of being found out, and sounding clever seems a safer bet than being understood. As more people try to sound clever, the standard gets tougher, and before long formerly sensible people start talking absolute rot. Last week I read an interview with a senior manager at Amazon in which he explained the secret to his hiring success: “Your bar raiser should also run the debrief after every hiring loop.”
The next enemy of common sense is self-importance, which over the past two decades has risen broadly in line with executive pay. Last week Jamie Dimon solemnly told Maria Bartiromo on Fox Business: ‘JPMorgan is the best thing I can do for country and humanity’ — which is even richer than Lloyd Blankfein saying Goldman Sachs did ‘God’s work’, as the latter remark was arguably ironic.
Self-importance not only makes business people lose the plot at work, but at home too. On LinkedIn the other day a former chief operating officer of eBay boasted that he was so busy he bought a house without even looking at it properly, and that his wife once delivered clean underwear to the office after he had worked all night. A five-year old could have told him that this is no way to live, and that if you are caught without clean underpants, or end up buying a house having hardly looked at it, it is better to keep quiet.
Human weakness is not the only destroyer of common sense; the corporate machine does so equally powerfully. Departments such as HR and PR routinely eliminate any lurking pools of rationality, while interdepartmental rivalries, budgets and regulations of any kind all tend to ensure that few things are ever done sensibly.
When the BBC’s billion pound Broadcasting House opened, someone had decreed there would be no rubbish bins by journalists’ desks, but a distant ‘recycling hub’ instead. The result was that ancient rubbish festered on desks and the new building was overrun by mice. Once this delightfully trivial news item got out, it was a cue for someone in PR to crank out a humourless statement full of flannel and pomposity. “As is standard practice for large organisations, the BBC has a contract in place with a specialist pest control company and extra measures are being taken to deter rodents . . .”
The only way of safeguarding common sense in business is to grow your own, and become an entrepreneur. A couple of months ago I helped judge a competition for new businesses. One of the winners made charging points for electric cars; another had developed a sort of Netflix for magazines. Both were good ideas, with good business plans and founders who spoke lucidly about what they were doing.
I don’t know if either will succeed. But I do know that if they do, their good sense will be under attack.
As evidence of how entrepreneurial companies go a little mad as soon as they have some spare cash, the editor-in-chief at Wired recently wrote a memo to all staff decreeing that the magazine’s brand new offices in San Francisco must be kept pristine, and ruling on the types of personal objects that were permissible on desks. The memo was illustrated with a photo of the editor sitting in what appeared to be a fuchsia padded cell with a dog under each arm. “Wired is no longer a pirate ship,” he told staff.
And that is the sad lesson of corporate life. Once the pirates get on board a big cruise liner, they may find their common sense has gone down with the rickety old craft.
Published in Dawn, Economic & Business, January 26th , 2015
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