Five Loaves, Two Fishes and Six Chicken Nuggets: Urinations From Inside the Fast Food Tent (6 page)

Let me give you the case of Sir Hector MacDonald, commander of the British forces in Ceylon in 1903. He was a Boer War hero, but had been disgraced, exposed as a pederast, and faced a court martial. He was summoned back to England to have a pre-trial meeting with his Field Marshal. From that meeting, he was ‘called’ to a meeting with King Edward VII. After meeting his monarch, he thoughtfully cut the whole process short by shooting himself. Speculation has it the King suggested this solution – which is ironic, if true, because the King himself had many big appetites, only some of which were to do with food.

I can’t help it. I am fascinated by why and how that meeting was staged, and how the hell King Eddie broached the subject. What do you do? Wait until the port (an 1877 Taylor’s, I presume) and then lean gently forward, let the first cigar smoke clear, and amiably let it drop:

‘I say, old bean. Had a chat with the powers that be, and it would be awfully bad sport to let this spot of bother reach the papers. You know, the good name of the Regiment and all that. What ho. Might make sense for all parties if you topped yourself – and sooner rather than later.’

I can only imagine Mac never blinked or skipped breath:

‘Absolutely, Your Majesty. Took the words out of my mouth. Great, really great, idea.’

What has this got to do with modern business? This bizarre incident reflects a time when public figures, faced with failure, were prepared to stand up and accept responsibility, and the ramifications that came with it. The last of these was John Profumo – to my eyes a troubled hero, not an enemy of the State. Not every one of these involved a bottle of whisky and a revolver, and not every one involved scandal. But a public failure was not necessarily seen as dishonourable in an age when honour was still worn as though it was your best suit. No, the dishonour came from the way you handled failure. If you openly accepted responsibility, you didn’t try to deflect the blame, and you stepped down from office and disappeared for a while, the chances are that you could rise again. Society at large, and your peers specifically, could forgive an honourable human failing, but they would not forgive a dishonourable attempt to lie, hide, and profit from it.

Now, contrast that with today’s business heroes. Over the past few years, a whole gaggle of businesses have failed. It’s not the first time a bubble has burst in history – and it won’t be the last – but it has been widespread and painful. Investors saw market values tank, pensioners got beached and employees were laid off, again, in thousands. Behind all this were a bunch of business ‘leaders’, largely in technology businesses, who saw nothing to worry about when their price–earnings ratios were in triple digits, their borrowings (and gearing) were off the graph, their overhead burn-rates were chomping their liquidity and their revenues were a long distant promise.

It is wrong to say their myopic leadership was solely responsible for bringing down this total house of cards, but they were on the bridges of their ships when it happened. Those who suffered when their particular companies crashed had nowhere else to look for responsibility and accountability than at the
grand fromage
who was leading the business at the time. Now then, have there been a bunch of honourable suicides, or – at the very least – some honourable acceptances of guilt and resignations as a result of all these failures and failings? Nah.

Let’s take the case of Richard McGinn, who supervised the disintegration of shareholder value in Lucent (along with more than ten thousand jobs) during his three-year time on the ship’s bridge. (I could have picked any of fifty – a hundred, maybe – names, from either side of the Atlantic, to make this point.) Resign? I don’t think so. The ‘price’ Mr. McGinn ‘charged’ for leaving the debacle he had steered Lucent into was (approximately) $13 million, and he is entitled to a long list of future perks, including a near-$1 million annual pension.

There is no public disgrace with these people. They are hidden behind a panel of attorneys. The exit packages are all definitive agreements. Everything is legal.

After a lot of thought, I have concluded that there is no need for these failing people to kill themselves in these sanguine times. But that may need to change soon, and my suggestion to today’s business community would be that somebody should take on the role of the King in 1903 – you know, making sensible and sensitive judgements, but being prepared to make an example now and again.

It would work, I know it would – and I am available.

13. First, finish your chicken

I
have lived a full and contributive life. It was I who brought all our children back to their senses by inventing, planning, and overseeing the execution of the punk rock movement. I cannot claim full authorship – but it was I, together with a thin, wiry Elvis Costello, back in the seventies, who decided one night, albeit after a jug or two of grappa, that the Moody Blues had become too fat and orchestrated. The rest, of course, is history. Our children were saved.

For many, that would be enough for one lifetime. Not me. Angered by the docility and comfort of the wealth-creating institutions of the eighties, I sat down with another friend, Ivan Boesky, and this time, helped by a decanter of fine port, we planned the whole junk-bond thing. That proved so radical that I had to call in a few IOUs in the White House to stay out of jail. Ivan, of course, was not so lucky.

You would think that reforming the whole youth movement and the basic structures of wealth creation would be enough – but I’m off again. This time I need to sort out these things called ‘consumers’. They are becoming their own worst enemies.

I’ll start with chicken, move through salmon, and on to airlines. On the way I’ll develop a theory. At this stage you’ll just have to trust me on that.

The free market is like democracy and the internet. The benefits of all three of them are extensive and obvious, but the pitfalls are significant and usually swept under the rug. All three of them can be defended on the basis that, on balance, we are much better off with them than without them.

One of the tenets of the free market is that competition will provide the required Darwinism. Supply and demand lines will cross on a graph and fix a value for a product or service. If the market is left alone, the aggregate of all those points will optimise the ‘welfare’ of the maximum possible number of people. The problem is that the common way of measuring value is the price you pay for it, and the increasing assumption is that the cheaper it is, the better it is for the buyer. Therefore, the cheaper it is, the more you will sell of it.

This works well in areas where nobody is actually put at risk or exploited by cheapening the products. But the reality is that the ‘hunt for low overhead’ increasingly involves exploitative practices (for example, using Third-World labour). In my observation, it can also involve real risks to the ignorant but enthusiastic consumer.

In my childhood, we were neither rich nor poor. A roast chicken, however, was still something of an event in our post-war English house, and tasted delicious. Salmon was a true rarity, costing, as it did, the price of a dozen alternative meals for a pound of it. Air flights were still a dream. Today, all three are virtual commodities. On the surface, that is welcome news for the consumers of the world. It should also be terrifying.

Chicken is cheap. Why? Because, if the average reader knew the true conditions of the battery farming techniques brought into play to make that cheapness possible, they would faint. I am not going to go into detail here – but it is fairly indisputable that at least twenty million battery chickens are killed, world-wide, each day, in a none-too-pleasant way, after about six weeks of a none-too-pleasant life, at the end of which they can just stand up in the space they are allowed after being pumped with growth-promoting antibiotics. Sure, it’s cheap. But the only way you can get any flavour in the ‘meat’ is to coat it with sauce or spices.

Salmon? The ‘salmon’ on most of our plates today bears no relation to the athletic king of the wild stream that is the true bearer of the name. The natural habitat of most of these ‘fish’ is a bathful of chemically tainted, louse-and-parasite-infested, excrement-laden, and occasionally toxic seawater. Their diet is mainly colorant. Many of them ‘escape’ their prison farms and infect their wild cousins. They now threaten the very existence of the real thing. Sure, it’s cheap. The cause of that cheapness, however, is such that I will never knowingly eat farmed salmon again.

It’s not just food. Air travel is now within the financial reach of most people. What the year 2001 taught us was that a big plane, full of fuel, in the hands of a trained pilot who has a profoundly different opinion on the sanctity of human life than most of us, is a fearful weapon. One of the reasons air flights are so (relatively) cheap, is that the security practices required to completely avoid those circumstances are expensive and, therefore, under-resourced.

Cheapness that involves exploitation and/or risk is not value. In my world, chicken, salmon and air travel (as a
start
) would cease to be commodities. They should be mandated to cost five times as much as they do, and become special again. They would become special again because they could be done properly. We will re-discover what chicken tastes like. We will save up for, and celebrate, a piece of salmon. Air travel will become something you look forward to.

Wow. Is there no stopping me? First, our children, and then wealth creators. Now I’ve done consumers. Next, I will take on soccer players’ salaries, followed by the whole ‘bling’ concept.

14. What a load of haggis

T
o Scotland – by my calculation, the fiftieth country I have visited. Many of my US readers will not have been there, but most will have mental images of all that wonderful Scottish stuff – kilts, St. Andrews golf course, malt whisky, the Highlands and Mel Gibson. I fell in love with the place twenty-five years ago when my wife and I had a bed-and-breakfast touring holiday in the Western Isles. We were introduced to a concept called ‘high tea’, and I put on about forty pounds in ten days.

In the winter, it’s a bit of an effort for an ex-Florida dweller like me to brave the climate and go there – but I was determined so to do. The event was to celebrate the winners of a bunch of prestigious corporate training awards, and I wanted to hoot and holler my support. In these parlous and difficult times, when discretionary spending budgets have all but disappeared, these companies had been brave enough to raid the corporate coffers to invest in developing their people.

The images of September 11, now almost five years old, are still horribly fresh in our minds, but what happened immediately afterwards seems a bit blurry. There was a load of political rhetoric and military posturing. Consumers changed a lot of buying habits overnight. Financial markets reflected a surge out of equities. Many companies seemed frozen in the headlights, simply – and understandably – not sure of the implications for them. If you re-run your memory-movie, however, you will recall that a few of them moved rapidly and within a couple of days had announced huge layoffs – some of them in double-digit thousands.

Now then, I’m willing to make a bet. If you took those companies that made such a move and scoured their previous corporate communication documents or the transcripts of their shareholder meetings, my bet is you would find the words ‘our people are our greatest asset’ somewhere in there. So we have this strange pattern of behaviour – if you are suddenly faced with a crisis, you decide to face it
without
your best weapon, i.e. your greatest asset.

Of course, the whole ‘greatest asset’ thing is a load of haggis (while I’m in Scotland …). It represents the cynicism of modern business at its worst, and has now overtaken ‘empowerment’ as the biggest gap between walk and talk in industry today. But I found that particular round of layoffs a wee bit more sinister.

I can tell you, from experience, that mass layoffs are complicated things to do properly. The company’s behaviour and actions are, rightly, governed by employee contracts and legal regulation – which varies, sometimes by local statute as well as national law. It needs careful planning, communication and consultation. If a company announces a specific figure of x-thousand layoffs, as a reaction to a specific event, within a couple of days of that event, it tells me that such companies were reading from one of two scripts.

The first script is that the plan already existed in detail, and the company was waiting for an opportune moment, or an appropriate set of circumstances, to put it in the public domain. These would be defined, of course, as circumstances that enabled the company to blame something other than its own woeful performance for the cutbacks. Am I saying some corporate big cheeses actually
welcomed
the September atrocities? Absolutely not. That would be a crass accusation. Am I saying a few took the chance to hide existing bad news behind the chaos? Absolutely.

There is another scenario: a detailed plan didn’t pre-exist. In which case the number of announced layoffs had little or no science, thought or planning behind it. The eventual number probably had its genesis in a CEO banging a table and yelling that the company needed ten thousand off the payroll. Now. Today. Two days later, a figure of twelve thousand (‘Err on the side of aggression – this may not happen again’) is announced – which is no more than a swish in the air in an attempt to address perceived future market slowdown and shareholder paranoia. If you can think of a better way to make the wrong decision for the wrong reason, e-mail it to me.