Integrity must be the new message from the top, says Sants

October 13, 2010

At the risk of infuriating Andrew Marr, I intend to commit my thoughts to a blog on the subject of corporate ethics. No, this is not my rumination on a firm with headquarters in Chelmsford, but on the thorny issue of business integrity.

Gekko says that greed is good and now it's legal

Gordon Gekko is back in British filmhouses in Wall Street 2: Money Never Sleeps with Michael Douglas reprising the role of the unprincipled slash and burn moneyman.

In the new film we see an unrepentant Gekko in the days of boom before the recent banking bust celebrating the fact that “greed is good and now it seems it’s legal”. According to the film’s director Oliver Stone, individuals like Gekko have passed their date stamp, sharp suited dinosaurs who have been replaced by the major banks and the hedge funds: “They are the big players now…the money’s too big.”

With impeccable timing, in the same week of the film’s UK release, Hector Sants, chief executive of the Financial Services Authority, addressed the issue of corporate culture and ethics in a Mansion House conference speech, and how in the banking industry a company’s value system was critical in shaping the behaviours and judgments of its people.

Management, he said, had a critical role in determining the culture of an organisation and setting the direction and tone of a company so that employees made the right decisions. He then posed some questions that should be asked about ones firm:

  • Do management model good behaviour, i.e. make their values ‘live’?
  • Do management articulate a clearly understandable strategy?
  • Do management offer guidance and training to assist in good decision-making – for example, on ensuring the fair treatment of customers and effective risk management?
  • Do management incentivise good behaviour and deter poor behaviour and how?
  • Do management encourage the required diversity to facilitate challenge to ‘group-think’?
  • Do management articulate their vision of the right culture? (Linking the brand of the institution and its culture)

These questions should not be asked as part of a box-ticking exercise; the company culture must “ring true and be consistent with what the firm does”.

This is not always the case, he said. Some of the causes of the recent crisis were rooted in the behaviours of firms and organisational cultures. And, worryingly, some senior managers had evidently failed to learn the lessons and were repeating their mistakes as if in defiance of Einstein’s definition of insanity (doing the same thing again and again in expectation of a different result).

Companies that fail to act with integrity and to ensure good behaviour is part of the lifeblood of their organisation face regulation, he warned. He could have added that they might also find themselves the subject of Mr Stone’s next cinematic opus.


Posh nosh and French polish – giving brands a makeover

February 25, 2010

So Greggs the bakers is getting the Eliza Doolittle treatment. The high street snackerie famous for its pies, pasties and pastries has announced that it’s going posh to broaden its appeal. The bakers, which began life in the North East in the 1960s, is giving its London stores a makeover – wooden floors and moody lighting – to tempt its target white-collar customers into tucking into this week’s flavoursome star buy sticky toffee muffin or lunching on a steak-filled pasty and yum yum combo.

The firm’s chief executive, Ken McMeikan, says the changes will enhance the buying experience of all customers from “barristers to builders” as the company competes against the likes of Starbucks and Pret A Manger.

Of course, Greggs is not the first brand to attempt to refashion itself. Skoda, once the object of mirth among car drivers, was taken over by Volkswagen in the 1990s and, while cleverly satirising its own image for nerdiness, carefully built a reputation for reliability and affordability. Skoda now tags itself “the manufacturer of happy drivers” and boasts that 98 per cent of Skoda owners would probably recommend them to a friend. We are presumably expected to skim over the word ‘probably’, but you get the drift.


A still from the visitBlackpool campaign.

It is not just cars and shops that can get the sort of facelift that would make Mickey Rourke envious. Blackpool, once the go to destination for hen parties, is now billing itself as a cultural hub, must-see visitor attraction and conference host for the working classes. It has done so in a very imaginative and witty promotional video that applies some French polish to a destination which now attracts 13 million visitors a year.

According to Natalie Wyatt, Head of visitBlackpool, the aim of the video, which shows a young French woman waiting listlessly in a restaurant, was to encourage visitors to take a fresh look at Blackpool and highlight the resort’s attractions.

She said: “We have received many positive comments from journalists, visitors and locals and I am certain that our increased visitor numbers are thanks, in part, to new visitors coming to try a spot of ‘otpot and a glass of champagne after viewing the ad!”

Champagne and ‘otpot – sounds like a new menu option for Greggs.

Oxford to London in 2 hours and 15 minutes

August 19, 2009

The fastest man in the world just got faster. At the Olympic Stadium in Berlin, Usain Bolt broke the tape in the final of the World Championships 100 metres in 9.58 seconds, shaving 0.11 seconds of his winning time in Beijing.

The Jamaican believes he can go faster still, perhaps as low as 9.4 if he keeps improving and avoids his favourite snack of chicken nuggets. Is he right? Can man boldly go faster and faster? In 1912 the 100 metre record stood at 10.6 seconds, so in less than a century athletes have chipped more than a second off the fastest time. But sport scientists and researchers in human performance suggest athletes, particularly in speed events, have begun to plateau out and in less than 20 years they will have hit the limits of their potential in most events.

In 20 years it is likely that the urban sprawl of London will have swallowed up Oxford. So it was prescient of executives at Oxford Airport to this week rebrand their airport London Oxford. Although the airport, which serves mostly businesspeople and private charters, is more than 60 miles from the centre of London, the benefits of being on the doorstep of the capitol and conveniently placed for both London and Birmingham were widely promoted in press reports.

The move has naturally excited a lot of interest (which is probably mission accomplished if you work in the airport’s marketing department) and got people ‘webchatting’ about their journeys flying to international airports which turned out to be a long way from their intended destination. By and large, people’s personal experience tends to shape their attitudes to the debate about whether Oxford should be included in the next edition of the A-Z of London.

For instance, if you have ever flown from the UK to Vienna airport and looked up from your in-flight magazine to find you have actually landed in Bratislava in a different country, you will probably regard the controversy as small beer. 

And as the airport website highlights, the crucial issue is not proximity to London but travel time. Trains take under an hour, driving time to the M25 is approximately 45 minutes and if your name is Usain Bolt and you are capable of sustaining a top speed of 28mph you can be in the West End in about 2 hours and 15 minutes. I am, of course, allowing for no headwind and a congestion-free sprint down the M4.

Think global, shop local

July 14, 2009

The economic boom was, if you were living in one of the developed economies, a fairground ride we all wanted to jump on. It was also a ride that we thought would probably never end. Gordon Brown had, he assured us, flattened out the bumps of boom and bust and we hit the malls with our plastic. But end it did, in thudding, juddering style. Look around your local town centre and you will see the consequences: boarded shops, liquidation sales and here-today-gone-next-week discounts outlets.

In a new book Real England: Battle Against the Bland, Paul Kingsnorth suggests that the recession may actually give us [citizens] the opportunity to step back, clear our heads and consider the negative impacts that the rush for growth had upon the world. The downside of boom, he contends, has been the emergence of a “homogenised” high street, the disappearance of independent retailers and “the relentless march of the identikit landscape”.

There is nothing new in this critique. But while researching his book, the author met people in different parts of the country who are campaigning to reverse the tide of corporate blandness. He witnessed communities rallying together to save local shops and businesses, and groups engaged in protests at the plans of ‘big business’ to build developments which are unsympathetic to the local community.

In St Albans, where I live, there is a campaign by local residents concerned by Tesco’s plans to develop a site in the town centre. While the standoff between Tesco and the city’s town planners goes on, the earmarked site remains empty, shops in the vicinity are either abandoned or taken on short-term leases by fast food joints, and nearby streets begin to look shabby and deprived. It is a pitiable and dispiriting sight.

So is it possible to reconcile these two forces: the spread of high street brands and the maintenance of local needs? How do you reconnect the global and the local? The answer may exist in Dorchester where following the collapse of Woolworths, the former manager, Claire Robertson, reopened the store as Wellworths, or “Wellies”, as the locals prefer to call it. Three months on, the new store has served more than 100,000 customers and there are plans to open a second store in the autumn.

According to Claire, the problem with Woolworths was that all stores had to look the same, stock the same things and failed to meet local needs. Claire isn’t making the same mistake. “We know what is going to do well and people are starting to realise that we are listening to them,” she says. One only hopes that the big brand stores that survive the recession are listening too.

Size does matter

June 4, 2009

Interesting times on the high street. The bowler hat (Bradford & Bingley), the square umbrella (Abbey, formerly Abbey National) and what looks like an opened orange-coloured box with a blue base (Alliance & Leicester) are being replaced by the red flame logo of super-bank Santander.

I am sure most Alliance & Leicester customers will not be greatly exercised by the fact that their bank – a bank with a history dating back more than 150 years – will from next year assume the name of a port and beach resort on the north coast of Spain. If you are a B&B customer living anywhere outside of the West Yorkshire town of Bradford, you may even look forward to a ‘swoosh’ of Spanish glamour.

What customers of all three banks will probably welcome is the reassurance of visible links with a bank that has 90 million customers in more than 40 countries and describes itself as “one of the strongest and most secure banks in the world”. Strength, scale and prudence are the key brand attributes all retail banks are looking to project to instil confidence in customers left dazed and confused by the banking meltdown. And whatever the risks and costs involved in a major rebranding exercise (the marketing campaign supporting the relaunch of Norwich Union as Aviva this week is estimated at £10million), the Santander proposition is clear: at times of financial storms, seek out a safe port.

If Santander is relying on its size to connect with customers, other brands are using their history. The use of so-called ‘heritage’ branding will be understood by anyone who saw long lines of people outside M&S stores recently as the retailer celebrated its 125th birthday with a penny bazaar sale on selected items. Meanwhile, Virgin Atlantic has dug out a brick mobile phone and shoulder pads from the 1980s to celebrate its 25th anniversary, and Persil and Milkybar are also airing their back catalogue of television advertisements.  Far from breeding contempt, familiarity in a recession can be used to signify trust, reliability and value for money. In troubled times, it pays to be big and old.