Magazine article New Statesman (1996)

Targets Are All the Rage in Industry as Well as in Government; but Company Bosses, at BP and Elsewhere, Are Finding That They Cause Subordinates to Cover Up the Bad News. (the Business)

Magazine article New Statesman (1996)

Targets Are All the Rage in Industry as Well as in Government; but Company Bosses, at BP and Elsewhere, Are Finding That They Cause Subordinates to Cover Up the Bad News. (the Business)

Article excerpt

Lord Browne of Madingley, chief executive of BP, is human after all. The business hagiographers have for years attributed godlike talents to this man. He is credited with transforming BP from a debt-crippled also-ran into Britain's biggest company. He has been voted British manager of the year three years running. He is the cuddly, green-tinged face of Big Oil, and a people's peer as well.

The Financial Times, over the summer, published an unprecedented 10,000-word series based on interviews with the man they called the Sun King. In the City, which is always suspicious of personality cults, the articles went down like an anarchist in Lombard Street. I'm told they laughed like drains at Shell, where they regarded it as a sign that Browne was riding for an almighty fall.

Sure enough, Browne's personal gusher has suddenly fizzled out. For the third time in eight weeks, he has had to confess to shareholders that BP won't be disgorging as much of the black stuff this year as he'd earlier promised. Missing targets once is forgivable; do it twice and lips get pursed. Three times, and the big shareholder battalions ask what the hell is going on.

Browne is the ultimate target-obsessed Blairite. He would boast of targets set and met with all the fervour of a new Labour health minister enumerating waiting-list successes. The ultimate management task, he said four months ago, is "to say what you're going to do and then do what you said, and then repeat the experience again and again". No wonder that Anji Hunter, Blair's personal gatekeeper at No 10, jumped ship to join BP. She must feel at home in the company known as Blair Petroleum.

There are two versions of what has gone wrong. The official BP line is that the company was hit by natural disasters and one-off problems and had not allowed itself enough headroom to avoid an embarrassing output downgrade. Slow reporting lines added to the misery.

The unofficial reason -- emphatically denied by BP -- is that employees are terrified of bringing Browne any bad news. One City analyst suggests that subordinates simply produce wrong numbers, rather than admit failure, in a company where meeting targets is a religion. Certainly, to miss a target is to invite both a bollocking from above and a cut in your performance-related bonus. Even where the target is met, it may only be at the expense of other things. Targets can be dangerously distortive, especially in very large organisations. …

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