BUSINESS ANALYSIS: Monuments to Folly: When a New HQ Spells Trouble ; BUSINESS ANALYSIS Is RBS the Latest Victim of Corporate Hubris?
Reece, Damian, The Independent (London, England)
WHILE SIR Fred Goodwin is busy trying to protect his reputation from ridicule by suing The Sunday Times for libel, another monument to his time as chief executive of the Royal Bank of Scotland is taking shape outside Edinburgh - a gleaming new pounds 350m headquarters for the Scottish banking group.
However, while Sir Fred's immediate concern is fighting for damages through the courts, history suggests it may well be the new corporate HQ that comes to be remembered most about the Goodwin years.
The past century is littered with examples of ambitious corporate architecture which has subsequently proved that pride comes before a fall and that shareholders should beware acts of corporate hubris.
Sir Fred's libel claim relates to allegations in The Sunday Times that he wanted a private road built between the bank's new headquarters and Edinburgh airport and that he had had a "personal onsite cabin" erected so he could inspect the new headquarters currently being built. A third allegation claimed Sir Fred "has been seeking membership of Bruntsfield Links Golfing Society" only to be told he had to join a 10-year waiting list. RBS and Sir Fred strenuously deny all three claims.
However, the lawsuit and the new HQ have raised the issue of corporate hubris once again. Not that RBS needs any reminding of how important the warnings from corporate history are.
National Westminster Bank had a 42-storey skyscraper built in the heart of the City of London in the 1970s to reflect its banking glory. But after years of subsequent lacklustre performance it was taken over by RBS itself and is now merely a brand owned by its once smaller rival.
RBS says it is confident that its new Edinburgh building will not join the list of monuments to fallen corporate egos. It says it is moving 3,250 staff from 26 separate offices to work together under one roof for very sensible organisational reasons. The pounds 350m price tag, says the bank, is hardly outrageous given the cost of headquarters for rival companies based in London. A spokeswoman for the bank says: "It is appropriate to our operational needs and will play a part in making us an employer of choice."
Barclays is moving into a towering Canary Wharf skyscraper at the beginning of next year, but has decided to rent. HSBC already occupies a similarly imposing site near by, but again is renting.
However, the City of London is home to numerous follies to corporate hubris quite apart from the old NatWest tower. Lloyd's of London commissioned Lord Rogers to build its new home, which was completed in 1986, just a few years before the insurance market nearly collapsed in a scandal that left thousands of Names, or members, penniless.
Sir Peter Davis moved J Sainsbury into a gleaming glass and steel structure in summer 2001 at Holborn Circus. Although the company rents the site, its fortunes since the move have been disastrous. …