BA backs the Bus and the Dreamliner

September 29, 2007

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British Airways splits its future plane purchases between Boeing and Airbus. Although earlier statements suggested that the company was not interested in a Superjumbo sized carrier such as the new generation A380, Willie Walsh and his team show a chess-like grasp of strategy

Speculation in Seattle was pretty much right. A week before any official announcement, Industry insider James Wallace noted

The campaign is a key showdown between the A380 and 747-8 Intercontinental and the 787 and A350 . So far, only Lufthansa has ordered the passenger version of the 747-8. But Airbus also needs another major international customer to back the A380. It has repeat orders from Lufthansa and Singapore Airlines, but Airbus has long sought to bring BA into the A380 fold.

Jefferies & Co. analyst Howard Rubel told the AP he believes investors are expecting British Airways to split its order between the two aerospace rivals.
“I think B.A. wants to bring a little competition into the mix,” he said.
BA Chief Executive Willie Walsh has visited Boeing and Airbus for briefings on their planes.
The airline recently ordered more 777s.
Even though British Airways early on said the A380 was too big for its needs, Walsh has said the airline is now interested in the big Airbus jet, which will enter airline service next month with Singapore Airlines after a two-year delay.

Wallace’s blog also attracted a remarkable set of speculations about the prospective decision. Most seemed to be based on ‘sources close to Boeing or BA’. The following was typical

Posted by unregistered user at 9/20/07 9:21 a.m.
I’ve heard 10 A380’s + options on 10 more , 20 787’s + 10 options and 10 A350’s + 10 options

When the news of the decision was formally announced it was widely replicated from news agency sources. I took this from The BBC, but found it on all the main news feeds.

BA will buy 12 Airbus A380 superjumbos and 24 Boeing 787s, to be delivered between 2010 and 2014, for a reported $8.2bn (£4.1bn). The group also has options to buy seven more A380s as well as a further 18 Dreamliners from Boeing.
Further negotiations will occur so that BA can replace its remaining 747-400s. This appears to be between the 787-10 and the 777-300 ER from Boeing, and the Airbus A350

The Boeing reaction was between gritted teeth:

The Boeing Company [NYSE: BA] is honored that British Airways has selected the 787 Dreamliner as a key element of its long-haul fleet renewal

What’s going on?

Leadership geeks may be tempted to see unfolding a story of strategic leadership. If so, it is a story which has to place leadership with a wide cast of strategic players. We may start by thinking of Willie Walsh as the dominant decision-maker in the story, with some billion pounds/dollars to invest in the future of his company.

The evidence of Mr Walsh’s leadership style suggests that he will have been very active in the processes building up to the decision, internal to British Airways. At present we can only speculate. However, the decision has enormous significance. It will impact on the travelling lives of millions of people some more directly than others. Arguably it will impact on the future of employees of Boeing, EADS, and a myriad of suppliers and sub-contractors including Rolls Royce who will supply the engines. At another level, the debate on political influence and subsidies to Airbus and Boeing continues to bubble away.

However charismatic and autocratic his leadership style, Walsh will have been flying in tricky conditions and with a chief pilot’s usual near-overload of advice and chatter. Advisors, and advisors of advisors will have examined assorted risk assessments from in and outside BA into which data will have been fed from numerous sources. Somewhere in these the influence of various governments and global institutions will have been factored in, as well as the much-publicised production delays at Airbus and more recently at Boeing for the A380 and B787 projects. Willie Walsh keeps sane by following what the great Herbert Simon called satisficing, or simplifying the decision through a set of personal mental filters.

In an avalanche of articles and books since the 1950s, Simon ..focused much of his attention on the issue of decision-making – and [developed his theory of ] “bounded rationality”. Agents, he claims, face uncertainty about the future and costs in acquiring information in the present. Thus .. they have only “bounded rationality” and are forced to make decisions not by “maximization” by “satisficing”, i.e. setting an aspiration level which, if achieved, they will be happy enough with, and if they don’t, try to change either their aspiration level or their decision.

I have taken the view that such processes are those which chess-players also have to make. In this chess-game, BA wants to avoid fixing the position, when there is much to be said for keeping options open. So the overall decision on replacing the fleet of aging 747 400s may or may not have been made. It makes sense to keep options open, even to the extent of splitting up the decision between the two giant contenders for the business. That is partly why decisions also involve options as well as firm commitments.

Those with a liking for logistics theory can debate the merits of smaller planes and P2P (point to point) strategy, and larger ones with a Hub-based strategy. Whatever.

A judicious mix of planes of differing size keeps both strategic options open. A judicious mix of ‘top-down’ leadership actions, and ‘data driven’ analysis may also be appropriate.


Paxman Patronized by Politician. Man bites dog?

September 26, 2007

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Foreign Secretary David Miliband is accused by BBC’s Jeremy Paxman of showing him insufficient respect. We ask whether such bullying behaviour is acceptable, and whether Gordon Brown should immediate relieve Milband of all formal duties, pending a full enquiry into the matter

Late last night, I witnessed an unprecedented and unprovoked verbal attack on a BBC employee. It took place in a near-deserted conference hall at Bournemouth. The aggressor was the young and newly-appointed Foreign Secretary, David Miliband. His victim was the aging public servant Jeremy Paxman, who has suffered similar attacks down the years, while carrying out his duties as a distinguished political interviewer. It was typical that Paxman was disgracefully portrayed as a gruesome and sneering figure in the infamous Spitting Image show.

Mr Paxman was at a grave disadvantage during the exchange. He had courageously left the relatively secure location on the Newsnight studio, and entered a dangerously open space for the interview.

The aggressive young politician, clearly looking for trouble, had taken up an arrogant and insouciant posture, on a plastic chair. His interviewer, handicapped by the various bits of equipment required for him to carry out his duties, had been placed in a relatively servile position. This would have been evident to any observer of Celebrity Big Brother body language.

At one stage, Miliband’s distainful manner got through to his innocent victim. ‘Don’t patronize me’, Mr Paxman cried in despair. But his plea for mercy was too late. Quite clearly, he had been bullied into submission.

Later in the interview he could be seen staring into space. Maybe, in his prime, his posture could be interpreted as part of a well-known strategy to unsettle an arrogant interviewee. But that was then. Yesterday it looked more as if there was not a lot going on between those glazed eyes. The brutal attack on him had scored a technical knockout. Outrageous. In future, will Jeremy be able to operate in quite the same much-admired fashion that had earned him such celebrity status?

Perhaps Mr Miliband was still over-adrenalized from the heady experience of making his speech to Conference. Clearly he was spoiling for a fight. [How far away, I thought, from the graceful and courteous way that Douglas Hurd would fulfil his duties as Foreign Secretary, in the long-gone days of Margaret Thatcher’s governance. However robustly he would be pressed on behalf of the people, Mr Hurd always respected the fact that the interviewer was only doing his or her duty].

How different, I further mused, from the graceful exchange between Mr Paxman in his younger days, when taking on the guileful Home Secretary Michael Howard. The polite and insistent repetition of the same question by Mr Paxman. The polite refusal to answer it by Mr Howard. The basic move repeated in a seemingly unending exchange. But that was also a long time ago.

We are living in times when politicians may even see political advantage in dissing public servants.

An apology is called for

This is of some interest to readers of this blog. I like to think of us as a community concerned about leadership behaviours. I suggest that the cruel behaviour of Mr Miliband requires a firm leadership response.

In the interests of the nation, Mr Brown should insist that Mr Miliband should apologize to Mr Paxman and the BBC and promise to reform his ways and treat much-loved national icons with appropriate respect.

More, I call for a public enquiry to see whether our much-loved national icons require additional protection against violent behaviours of interviewees.

Something must be done before careers come to a premature end. Foreign Secretaries come and go. But there’s only one Jeremy Paxman. Surely he can be permitted to continue in the sunset years of his career, without vicious bullying from the supporting cast of actors?


Waiting for Gordon

September 24, 2007

Unity ruled. Not the name of a Union, but the mood of unity enveloping the Labour Party Conference in Bournemouth. The New Leader outlines his vision for the future. At times he retreated into the comfort-zone of his old role as Chancellor

The images from the first day of the Labour Party Conference offered some interesting surprises. At lunchtime, the faithful moving to the main auditorium wiating for Gordon’s speech were like fans heading for the Centre Court of Wimbledon when Tim Henman is playing. No, not quite. These were the faithful, queuing to get a good spot on Henman hill, clutching their thermos flasks and sandwiches.

The United Band of Hope

‘Where are the Blairites?’ asked Andrew Neill of the BBC’s Daily Politics show, in mock consternation. They were not to be found. The big-time defector Peter Mendelson had been one of the first of Brown’s political friends to betray him. Now he became one of the first of the Blairites to double-cross the frontline back to Brownite territory. He had announced his re-conversion in suitably confessional surroundings at a fringe meeting yesterday evening.

That was surprising. Then there was the even more surprising spectacle of another defector making an impassioned ‘come and join us speech. This was Quentin Davies, who had quit the conservatives last June [2007] as Gordon was becoming the party’s new leader.

Delegates struggled with the situation. Except for Dennis Skinner, who has a great taste for irony. Dennis Skinner sniggered. Mr Davies ended with a rallying cry. Come and join us, he called. A cheer-leader jumped up applauding enthusiastically. Brave fellow. A few others, stood up more reluctantly, applauded even more reluctantly. If they were looking for a lead from the senior party members present, they might still have been unclear what to do. Harriet Harman and the other platform leaders seemed rather unclear whether to applaud, and with what degree of enthusiasm.

Eventually there was a (sort of) standing, (sort of) ovation. Sadly I didn’t catch how Dennis was reacting. I don’t think it would have been ambiguous.

The main course

The anticipation of Gordon Brown’s speech was higher than I can remember. In some part, the first chance for those in the hall, and far beyond to see what he had to offer.

He started surprisingly by personalizing the events that had dominated his first hundred days. That was not the surprising bit, but by acknowledging a member of the audience, a fireman who had served with distinction in the thwarted attack on Glasgow airport. A more convincing standing ovation for this, than the one that had greeted Quentin Davies.

The new Prime Minister then returned to familiar ground. The impact of his father’s values on the young Gordon. His commitment as a conviction politician. Very worthy. Perhaps dutifully rather than enthusiastically received from time to time. New Labour as the party of aspirations, of expanding the middle ground.

He moved to equality of opportunity, and illustrated this with images of children and their education. The applause was far warmer. Curiously, some of his specific pledges seemed just a tad less well received than the rather platitudinous bits. But the bits well-received sounded to me too much like the Chancellor unfolding the sweeties in his budget plans.

Then, the offer of more sweeties. We (did he mean The Chancellor?) will renew the link between pensions and earnings. That was a surprise. (Unsurprisingly well-acclaimed). National minimum wage completely achieved. More new homes in environmentally and socially acceptable ways. Youth budgets in every community.

Yes it was a bit like his speeches as Chancellor. But it did not sound as a simple pitch for votes for a snap election. On the other hand, it wasn’t a simple anything. Rewards balanced with obligations. A Yes And speech for those in the Hall. One Member one vote; carbon omission legislation; All-elected House of Lords. (Phew).

Then a Yes And on being a good national leader and a good European and a good friend of The United States (phew, again.). And the debt owed by the nation to Tony Blair (lengthy applause, another surprise). Robust opposition to Al Qaeda. Humanitarian intervention in Iraq, Afghanistan or wherever (Yes And deepest commitment to the safety of our armed service people.

A National Health Service that is also a Personal Health Service. More specific examples. The speech had run for an hour. More Chancellor-like stuff on investing in medical research. Now more like the son of the Manse as he ended personally and patriotically.

No mention of the election.


The Centre Cannot Hold Three Political Parties

September 23, 2007

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Update note [June 2008]

The original post argued that in the United Kingdom there will be period of political instability as major parties head for the middle ground. The basic proposition was largely confirmed in the following year. By June 2008, Cambell had been replaced by Clegg as leader of the Liberal democrats:the Brown Bounce had not just vanished but had become a Brown Freefall in public polls and local elections in May 2008; a major financial crisis and a commodity crunch had beset the global economy …

The following is the original post with marginal editing for clarification purposes.

The British political conference season emphasizes the enthusiasm of the three major parties for fighting for the middle ground. Arguably this is unstable and unsustainable for a political system. The centre cannot accommodate three parties. As election time approaches, there will be powerful centripetal forces at work offering the possibility of significant political dislocations

Tony Blair gave The Labour Party a new name and moved it to the political centre ground. Gordon Brown is accused of moving his party even more to the right, but is clearly comfortable in the ground selected by his predecessor. David Cameron has stopped short to relabelling The Conservatives, but has been leading his party towards a central position on social, economic, and environmental policies. The Liberal Democrats feel more threatened than flattered by this sort of imitation, and from an invasion of territory it has defended historically.

What strategists say

Strategy remains part science, part arts with more than a dash of mysticism. Nevertheless, it has thrown up some powerful concepts. Michael Porter is widely consulted for his advice on the competitive advantage not just of organizations but of nation states. His nice little, tight little models have, among other advantages, the merit of face-validity.

Porter’s models suggest there is is something intrinsically unstable about the current political positioning. They help explain why both Labour and Conservative leaders have to struggle with members within their respective parties. However desirable is the notion of a united party, the temptation to break ranks builds up.

Then we have the Liberal Democrats led by Ming Campbell. They are in the curious position of seeing the big armies apparently converted to occupying to territory that was naturally their own. How easy it used to be for Labour and Conservatives alike to make fun of the Lib Deb’s obsessive concerns over the environment. Now they compete for the environmental vote.

David Cameron has to deal with those traditionalists who wish that he would reclaim abandoned regions to the right. Gordon Brown would like to move away from too close an association with traditional allies to the left.

The Centre cannot hold

In the much-quoted words of W B Yeats, The Centre Cannot Hold.

How might this translate into political actions? The Brown Bounce has not subsided enough to encourage the Conservatives to press ahead in uninhibited fashion with its centralising strategy. The Government is struggling to secure support, and pressures from Public Sector Unions and beyond continue. The referendum on the European Treaty is a particular inconvenience which may become acute. Ming faces and external squeeze and internal leadership difficulties.

There will be efforts to change from all three parties. But how?
Changes will see deployment of the trusty weapons of dissimulation and brand-building. In business, this is sometimes called marketing. In politics it is increasingly classified as spin.

Reclaiming or redefining?

Various strategic voices will be urging action (advisors are strong on urging actions). There will be the ‘perception is reality’ argument heard. Strategy becomes focused on ‘sending the right signals’, ‘getting the story right’, and so on.

Paying rent to the brand

The strategy is sometimes described as paying rent to the brand. Making efforts to reinforce favourable perceptions of the brand image, seeking to reinforce negative perceptions of rival brands.

Smearing them, smearing us

Conventional wisdom seems to be that smear tactics work. Cultures tolerate this to different degrees. The UK seems to be developing the American appetite for knocking campaigns, but we still have some way to go.

I have a suspicion that ‘smearing them’ is ‘smearing us’, and contributes to the wider perceptions that politicians are all smeared with the same brushstrokes. While our leaders from time to time promise a less brutal style of engagement, that impulse is all too quickly suppressed as the battles intensify.

The necessary shared ground

Another consideration is how to demonstrate a brand’s supremacy on various desirable features. If you can’t have all of them, which advertising mix will you settle for? Clinton reminded himself famously that ‘It’s the economy, stupid’. Gordon Brown is already under attack on what could be seen as a strong point as a competent economic leader.

Economic competence is necessary, but is it sufficient? Probity can sometimes threaten a brand and may appear to threaten governments. Public morality can be mobilized against avarice, cupidity, and duplicity. Plenty of scope for smear campaigning here.

Patriotism is another significant aspect to be covered in defense and attack on a brand. In the UK considerations over relations with Europe often become tangled up with notions of patriotism, and then on to the dark side of patriotism into xenophobia and racism. Security considerations have taken a similar turn.

Then there’s the environment to look after. This is calling forth political claims and actions of a particularly tricky nature. Each brand would like to claim the moral high ground. But for some, the moral high ground is uncomfortably far from their political comfort-zone as it often implies high levels of social intervention, Nanny-statism, and of decisions ceded to others outside national boundaries.

Wait a minute – where is the centre?

Is there technically some place we can identify with The Centre? The more I think about it, the more I become critical of the term. Mathematically, it is associated with a zero-dimensional point. The beauty of mathematics is that it can provide a formal location of a centroid of a multi-dimensional space. But the mathematics even of simple and regular figures become increasingly complicated as you explore more complicated and irregular spaces. The process smoothes out irregularities. So, for instance, you might smooth out two locations allocated to non-central positions to show that a political party is close to that zero-dimensional position. Another analysis would instead show two centroids, each rather distant from the unique one.

This becomes clearer with an example from the Liberal Democrats. It was pointed out in a recent Economist analysis [September 22nd 2007] that the party is attempting to reconcile its so-called left-wing faction with its economic and social liberalism (which make up the party’s ‘centrist’ position, according to the Economist). The process has been associated with the Orange Book published in 2004, and its advocates.

It may be helpful to accept that Yeats was right. The centre cannot hold. It’s wobbling about dangerously. Politically it is not much more than a dodgy and fuzzy term. Which may explain its enduring attraction within political critique. The conference season will provide indications of how the main UK parties are dealing with their battle for the centre ground.


Message from Northern Rock: Telling it Like it Is?

September 21, 2007

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In a message from its CEO Adam Applegarth, Northern Rock communicates with its customers. The one substantive item is an offer to refund all penalties imposed if they re-invest within two weeks. The message is as revealing for what it does not say, as for what it does

Northern Rock for the moment is the safest Bank for investors in the country. The website, much maligned as an indication of the Bank’s inability to respond swiftly, shows signs of recovery. (Although that side-bar graphic of a deep-sea diver gently descending offers a rather unfortunate image of the company’s future …)

Mr Applegarth’s message suggests just how little wriggle-room there is for a leader in these adverse circumstances. Every scrap of information will be scrutinized minutely. A minimum requirement is the avoidance of any factual inaccuracy. I read it carefully, and was left with the impression of a company doing its best under exceptionally difficult circumstances.
One dilemma is how much honesty there should be about the future. Should the message tell the truth, the partial truth, and only the truth that encourages investors to return to the Northern Rock’s offerings?

It is a dilemma, because the marketing and PR impulse is to create the simple brand message. That is the brand imperative. The conventional wisdom is to draft and redraft until the final version has eliminated all traces of ‘off-message’ signals. In this instance, the short-term need is to get some cash back in.

But we know that these are exceptional times, and there has been plenty of evidence in the last week of the difficulty of finding a way of reassuring customers. Thanks to the actions of the Bank of England, in coordination with the Financial Securities Authority and the Government, Northern Rock can say without falsehood that

The Chancellor has made it clear that all existing deposits in Northern Rock are fully backed by The Bank of England and are totally secure during the current instability in the financial markets

But that truth is unvarnished, and yet carefully polished in the posting. Polished to remove any hint that mistakes might have been made, or that changes will have to be made that will be unpleasant for investors. The dilemma is the inclination to be honest about such matters. To treat people frankly. Doesn’t that help build trust? And is it really the case that it will be pretty much business as usual in the future?

A mischievous suggestion

Sometimes it helps to face reality by acknowledging what can’t be said. Suppose the reality is that Northern Rock has been in a near fatal accident? At the moment it is presumed to be wrapped up in a financial security blanket and unlikely to return to full health. No-one will turn the life-support system off until arrangements have been made for donation of the various organs. A first message is received from the bedside of the patient.

There has not been much time to reflect on how I arrived in the Accident and Emergency Room of the Financial General Hospital. I suppose I had been feeling a bit off-colour for quite a while. But I had always been in such good health before. Maybe that had prevented me from seeing those symptoms that something was going wrong.

In hindsight, I suppose my lifestyle was unhealthy in some ways. I’m just thankful to all those who helped keep me alive. The doctors tell me that I will make a full recovery. I’m not sure. I’ll probably have to change my life style quite a lot. Still, must put a brave face on for the sake of the family. There’s a lot more like me. That A&E department is working 24/7. I think I’ll say it’s business as usual. Except I suppose it can’t really be the same business again. Can it?

If you want to sit in judgment …

A lot of effort is going into trying to establish ‘who is to blame’ in the declining fortunes of Northern Rock. I would prefer to see whether there is anything to be learned from what’s going on. Would things have been better, say, if Robert Peston had been in change of Northern Rock? Or Will Hutton in charge of The Bank of England? Or if George Osborne, or Roman Abramovich, or Warren Barton had … Enough of that. Let he who is without sin cast the first stone.


Mourinho Fulfils his Destiny

September 20, 2007

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Jose Mourinho leaves Chelsea football club. In doing so, he fulfils his destiny as the special one, chosen to achieve greatness. His story, like that of David Beckham, is the tragedy of those who would challenge the Gods by flying too close to the sun

Jose Mourinho is the John F Kennedy of football mangers. The clearest illustration of the charismatic personality in a sport not lacking in charismatics. The similarities to the stories of David Beckham and George Best are worth noting.

According the mythologists, the story draws on deep and commonly shared beliefs about ourselves and our world. It speaks of our acceptance of powerful forces guiding our destiny. The most powerful stories are told and retold down the ages. They can be found in Greek tragedies, in Celtic and Norse sagas, and also in the campfire tales of ancient peoples. The central figure is heroic. Destined to succeed spectacularly, and then fail spectacularly. The message is that the special ones may appear to have been blessed, but whoever is out there doing the blessing also wants to remind us that humans at some point have to come to terms with their limitations.

The special gifts of the charismatic include that of captivating those with whom they come into contact. We still use the old terms such as ‘spell-binding’ about their acts and speeches.

Jose had to go

Jose was fated to lead Chelsea to success, as he was fated to win the European Cup with Porto, a team hardly considered capable of it. Charismatic leaders have that effect on followers. The spell makes then capable of achieving things they would otherwise have believed to be impossible.

Those who come to mock often fall under the spell, but may fight against it. So it was that Mourinho even captivated the skilled and wilful members of the English Media legions, although there were those waiting, waiting patiently for the story to end in tears.

However, the spell retains its potency. Even when there are signals of a different reality, there are cries of denial. Jose has a contract to 2010. He will be staying at Chelsea. Thus spake Peter Kenyon on behalf of the club. But the fact he needed to make such an assurance was significant.

Perhaps sensitized by the week’s financial denials and reversals of policy by the Government and the Bank of England, I was not convinced by the spokesman on behalf of the Chelsea financial empire. So much so that I found time yesterday to update an earlier post, on the likelihood of Jose leaving the club.

Jose, David, and George

As is it with Jose, so it was with David Beckham and George Best. Their stories have similar ingredients of great giftedness and achievements accompanied by reminders of their fallibility, and potential downfalls. All achieved world-wide acclaim. All suffered. I will spare further links to the stories of the great Achilles or the original Hero. Jose and David still may have opportunities for further episodes in their reworking of that ancient story.


Northern Rock and Stone Age Economics

September 16, 2007

Northern Rock

The Bank of England backs a national bank as lender of last resort. Within a day of the announcement, Northern Rock customers flocked to their local branches. The great panic had begun. Assurances by the Chancellor of the Exchequer, various officials from the Bank of England, and the CEO of Northern Rock had little impact

The queues continue to grow

To be sure, the company has not helped itself, as a drama turned into a crisis. The cardinal rule under these circumstances is to find some way of making specific information available as rapidly as possible. Instead, the Bank was unable to deal with the technical problems following the crash of its website (presumably through sheer weight of attempted traffic).

Timeline of a crisis

Friday September 14th 2007. Radio and TV media throughout the day showed the growing queues outside selected branch offices. Nervous depositors and mortgage holders were interviewed. The beautiful impartiality of the media shone through the reports. Or was it the icy heartlessness which Graham Greene considered was the characteristic of the creative temperament? It’s an old debate.

The emergency lending facility to Northern Rock was agreed by Mr Darling, on advice from Mervyn King, governor of the Bank of England. Northern Rock chief executive Adam Applegarth said that it had not yet borrowed any of the “unlimited” funds available… [The Chancellor, Mr Darling] said that “in order to create a stable banking system, the Bank [of England] steps in and it makes facilities available to the Northern Rock.” .. Angela Knight, chief executive of the British Bankers’ Association, said that anybody who was “either a saver with Northern Rock or has got a mortgage… can be absolutely confident that they have got their money with or they have borrowed from a very sound financial institution.”

All the calming words did not stop some Northern Rock customers [attempting] to move some or all of their money to accounts with other banks.

Saturday 15th September.

Media reports concentrate on the big story. Big queues. Panic. Anxiety No ice in the heart from the customers. I imagined they would be mostly the inadequates and mostly poor and uninformed people. Confused casualties. Instead I heard interviews with articulate pensioners. Young house-holders. A university lecturer. Recently retired business people. (What sort of business?). Many had come with friend or family support. Some had knowledge of the likely downside to their investments. Maximum £900 from over £30,000. One was intending to retrieve £10. Others talked of £100,000. Taken collectively, these groups far from matched my stupidly simplistic expectations. These worried lines of people had more financial resources than you might expect from a queue of people to be found at a post office each week on ‘benefits day’. Was it time, too, for me to revise a long-held image of ‘ordinary people’ flocking to their banks in the financial crash in 1929?

This seems an example of mild hysteria to be witnessed at airports as crowds build up around desks, seeking information during a flight delay. I recognised the ‘nobody seems to know anything. They won’t tell you anything. I don’t believe what I’ve been told, anyway. They [the ‘they’ of possible mightmares] can’t ever be trusted. Politicians. Bankers. Airlines’.

The BBC treatment has been clumsy. Not so much ice in the heart, as unthinking. Northern Rock customers (those who were not queueing) were being advised to go to the BBC website. Where they would find the main report asking what if Northern Rock goes bust.

There was excellent information (as there generally is) to be obtained. That’s why I like the BBC coverage of national stories. But its efforts to become both more commercial and demonstrate its independence are regularly less than impressive. An earlier piece entitled Market Jitters and your pocket was also on offer

The piece on Financial Jitters: Lessons from History was informative about that Mother of Financial Crashes in 1929. Tucked away in that report was the steps taken internationally to avoid such an event happening again. The piece quite rightly pointed out that nothing is certain in life, and any deposits are theoretically vulnerable.

Overall, the Northern Rock customers who failed to get information on the corporate website seem to have remained in a state of high anxiety.

Leadership reflections

What sort of leadership are we observing here? Adam Applegarth was widely regarded as a skilful leader in Northern Rock’s transformation from a little Building Society into an international bank. He pioneered an imaginative business model which was in tune with clever notions of slicing and dicing investments and loan risks. Admiring enthusiasts of the mathematics of derivatives have been particularly impressed.

His experience in working his way up to the top of the organization suggests ability, energy and intelligence. In hindsight it is easy to suggest that the company was still not too far away from the management skills of a much smaller institution. Cynics tends to warn against investment in swanky new headquarters of the kind Northern Rock is building. And what to make of the unusual skills for a chairman, Dr Matt Ridley, better-known as a journalist and popular science writer on socio-biology (unkindly sometimes described as stone-age economics)?

Or a company committing a proportion of profits to charity through its own charitable foundation. Quirky and admirable maybe. Or too clever by half, and undone by market circumstances?