The British Post Office scandal ruined lives, but an unhealthy corporate culture that protected ‘the brand’ at the expense of people allowed it to happen, say insights experts Carl Davidson and Duncan Stuart.
If you saw the TV show Mr Bates vs The Post Office, you will know about the British Post Office scandal. The inquiry into this debacle shone a revealing light on the IT failures that led to more than 900 Post Office branch managers being bankrupted and wrongly prosecuted for fraud. But the harshest beam fell on the toxic culture of the upper management team that ran the Post Office.
The inquiry showed how the chief executive and many of her senior management team ignored information that contradicted their views – and then lied to cover their malfeasance. Those lies stretched all the way from Mr Bates’ village Post Office to the Houses of Parliament.
The inquiry makes for fascinating viewing, as good as any literal car-crash TV. When asked about her involvement in different stages of the cover-up, the CEO’s defensive body language hit 11 on the Spinal Tap scale. The CEO tried duck-shoving too, saying responsibility for the fiasco lay outside of her job description – which, memorably, led the incredulous prosecutor to bluntly ask what, if anything, did she actually do?
This matters if you’re a marketer because the rancid corporate culture at head office level was predicated on protecting the trustworthiness of the brand.
You heard it right: the management team viewed the brand as an asset whose value was measured by a computer system that – if plans had gone smoothly – would not only handle stamps and mail transactions, but would in time have hosted a mighty network of banking services. Business growth hinged on the trustworthiness of this computer system.
Management, ignoring evidence to the contrary, maintained that the IT system was fault-free and any discrepancies therefore had to be due to isolated incompetence or dishonesty of the retailers.
In this equation, the actual people who served local customers were seen as an expendable expense. They were hung out to dry.
The Post Office scandal has been called one of the greatest miscarriages of justice in UK history. Yet it has important lessons for all of us who care about marketing. Namely, the marketing decisions you make ultimately depend on your organisation’s culture.
Corporate culture was identified and labelled in the mid-1950s by psychologist Ed Schein. He studied soldiers who faced hostile interrogation during the Korean War. He had expected to find a tribe of tough, stoic soldiers who could withstand the pressure, and alongside them, a tribe of weaker individuals who would likely succumb. What he found surprised him. The key variable was not individual toughness, it was the strength and cohesiveness of the culture within each soldier’s unit.
Schein published hundreds of articles and more than 30 books and was a darling of business schools in the 1980s. Even after his death, at age 94, his star is once more in the ascendancy thanks to what he had to say about culture, psychological safety, and the challenges of hybrid work.
One of his great insights is that most organisations are an amalgam of three main tribes, with each having its own sub-culture and ways of making decisions. Very often these tribes either ignore the others or simply fail to communicate.
The three tribes are:
- The financial people. Starting with the CFO, but including the accountants and payroll. Most CEOs live here.
- The engineers. The people who look after the infrastructure of doing business. In an energy company, they are responsible for getting electricity generated and delivered. In FMCG, these are the people in charge of physically making the product. IT lives
here also. - The ‘people’ people. Includes marketers, those in communications, advertising, PR as well as the brand or product managers, the researchers and the designers.
The elegance of Schein’s insight is that it puts marketers into context. Marketers frequently complain they’re not included in the C-Suite and that their recommendations go unheeded. Instead of seeing research, product development and advertising as an investment, what the CEO, CFO and the chief of operations see is an unwelcome expense and a target for cost-cutting. Welcome to Schein’s culture wars. It can be an uphill battle.
When is marketing facing too much of an uphill battle? One telltale sign is when discussion of the brand, which was once the domain of the marketers, has been hijacked by the financial people.
This is what happened at the British Post Office. The financial people and the engineers took control of the brand, redefined it (but not as the people tribe would define it), and spent millions prosecuting anyone who dared question the IT engineering.
Marketers need to ponder their workplace culture. If you’re losing the culture war, you need some serious negotiations with the CEO – or, failing that, start a conversation with an organisation where the ‘people’ people are respected.
If you want to know more then just about anything Ed Schein wrote is worth reading. We’re tempted to say that marketers would most benefit from reading Schein’s Humble Inquiry or Humble Consulting. But his analysis of cultures, and the way they misunderstand each other, is best set out in his Organizational Culture and Leadership. It’s worth reading just to understand Schein’s notion of ‘cultural artifacts’.
This a seminal work for understanding organisations, and is name-checked by many of today’s guru consultants and leadership coaches.
This was first published in the 2024 June-July NZ Marketing Magazine issue. Subscribe here.
