Philip Whiteley's Blog

February 10, 2014

Vested interests, lazy journalism, and the biggest scandal you’ve never heard of

Filed under: Uncategorized — felipewh @ 10:24 am

Last Monday, on the BBC documentary Britain’s Great War, presenter Jeremy Paxman highlighted the case of the munitions worker Charlotte Meade. She suffered from an industrial injury during the First World War, contracting ‘toxic jaundice’ from chemicals used in arms manufacture, and died within a year. Under war-time censorship, the press was prevented from reporting the case.

Not so long ago, the same Jeremy Paxman admitted that Newsnight, which he hosts, is a tad ‘boring’ on slow news days. The irony is that, if he were aware of the modern equivalents of Charlotte Meade, he would be without a slow news day between now and the next general election. His team would be reporting one of the biggest corporate scandals since corporations first came into being. It is also a political scandal, as I shall explain.

Over the past six months or so, I have been researching for a book on toxic injury from leaks of jet engine oil fumes into aircraft cabins. I never doubted that my client, former Flybe captain and chair of the Aerotoxic Association John Hoyte, was genuine. As soon as I learned that aircraft cabin air is bled directly off the engine feed, passing close by engine oil, I could see it was an industrial accident waiting to happen. Unlike most journalists, I have A-Level chemistry. The shocking thing is that it seems that aeronautical engineers do not; or at least, do not recall what they learned.

What has astonished me over the course of the past few months, however, has been the following:

  • Just how serious the toxic injuries are, and that jet engine oil contains organophosphates. It is similar in seriousness to WW1 cases of ‘toxic jaundice’, and the cause is every bit as clear. While most flights pose minimal risk, from time to time an engine seal fails and there is a leak of toxic fumes.
  • Just how common these leaks of toxic gases are. There is industry jargon for such incidents: ‘fume events’. On 12 November 1999 in Malmö, Sweden, both pilots nearly passed out and had to don oxygen masks. Yet there were no product recalls; no response at all from the industry; and there have been many incidents since. Just last Friday, a British Airways 747 had to make an emergency landing in Dallas-Fort Worth after a fume event. It is unlikely that BA or the Civil Aviation Authority will be issuing any press releases – or advising those affected of the chemicals to which they have been exposed. A BA insider says: ‘This fume issue is getting worse; the general standard of BA’s 747s is worrying.’
  • Just how many people are affected – certainly thousands; possibly hundreds of thousands of people, nearly all mis-diagnosed; many confused as a result of irreversible brain injury.
  • The extent of the industry’s cover-ups and deceptions. This includes directing airline medical officers to mis-diagnose with psychological causes.
  • The way in which every arm of the British state, including the medical establishment, has allied itself with those causing harm, rather than those suffering harm, in a chronicle of biased tribunals and disciplinary/grievance procedures, and denial of basic human rights, including health rights. Even the NHS comes out badly, as it refuses to acknowledge that chronic fatigue can be caused by toxic injury.
  • A failure rigorously to honour and police the ‘duty of care’ that is supposed to lie at the heart of health and safety legislation.
  • The collusion right across the political spectrum, including the main union set up to represent pilots.

What I had initially assumed was the plight of a small number of people to get their industrial illness recognized instead turns out to be a major scandal, raising profound questions about human rights and the accountability of democratic institutions.

Between 2008 and 2011 the UK Government pretended to investigate the matter. Having turned down a request for funding by Dr Sarah Mackenzie Ross of University College London for a large-scale study into affected pilots, following initial research that showed alarming cognitive deterioration, the Department for Transport organized some studies that did not involve any fume events or any affected pilots. Researchers measured air quality on 100 normal flights (using a sampler criticized by one of the peer reviews). It revealed trace elements of organophosphates on some flights, and very high levels of (unspecified) ultrafine particles. Into the executive summary was inserted the phrase: ‘There was no evidence of pollutants occurring in cabin air at levels exceeding available health and safety standards and guidelines.’ This has been duly cut and pasted by Ministry of Transport mandarins into the minister’s statement after the report’s publication in May 2011, and by aviation industry spin doctors since, which was precisely the intention. British Airways kindly reproduced it upon the death of its pilot Richard Westgate, as seen on this regional ITV clip.

It is the same technique as the ’45-minute’ clause inserted into the ’dodgy dossier’ to justify the Iraq invasion. As cover-ups go, it is not even particularly sophisticated. It has, however, been enough to scare off lazy news editors, who want their scandals brought to them on a plate – a recent example is the Mid-Staffordshire NHS scandal, a story broken by David Cameron, not the media, and only fully covered since the publication of the Francis Inquiry. UK newspaper coverage of toxins in cabin air pretty much stops in May 2011, with the honourable exception of the Express.

The aviation industry goes to great lengths to cast doubt on the numerous studies showing ill-health from fume leaks; arguing that they do not prove causality; that there is ‘only’ a correlation and could be a coincidence. This is like saying that there is ‘only’ a correlation between road traffic accidents and head injuries. People are healthy, they get exposed to a fume event, they get sick, sometimes very badly sick, with the same chemicals in their body as you find in jet engine oil. Some coincidence.

By the way, I’m not an anti-corporate campaigner. I am pro-business. I think that there are probably too many workplace regulations. What we have is the worst of both worlds: honest, decent employers saddled with prescriptive rules on this or that way to handle a grievance procedure, while authorities fail to implement essential safety laws in an industry with high-level political connections, who play the jobs card with unions and governments when their insurers smell the possibility of compensation payouts.

As for the business implications, while there would be compensation payouts and upfront costs if aviation ended the practice of bleed air, there would be massive operating savings from lower staff turnover once they stop poisoning their employees – especially given the huge cost of training pilots. Nearly all employers grossly under-estimate the cost of high staff absence and turnover.

But one should not need a business case for doing the right thing, when the wrong thing is as wrong as this. I am ashamed that my profession, journalism, hasn’t done enough to expose this. The government doesn’t formally have censorship, but in the aerotoxic scandal, it hasn’t needed it – so far. I hope we don’t have to wait 100 years for justice.

September 18, 2013

Ethical success

Filed under: Uncategorized — felipewh @ 2:29 pm

As part of its Management Futures series of blogs, the Chartered Management Institute picks up on the theme of ethical governance and management for its September feature. Like New Normal Radical Shift, it challenges the idea that ethical conduct and commercial success are natural opposites. The following is an excerpt:

For the past few decades, the matters of ethics and social responsibility in business have been put firmly in their place: a short section near the end of the annual report; a few minutes before the close of the Board meeting. Social responsibility has meant some charitable donations and volunteer days, perhaps creating useful photo opportunities for the PR department. It has been – and often still is – seen as very much junior to the big beasts of finance, strategy and marketing. This is changing, however. In the past few years, some highly unethical practices, often enthusiastically pursued as part of the quest for high returns, have destroyed much shareholder value.

Click here for the full article.

Click here to buy New Normal Radical Shift

(This blog was published simultaneously on the Radical Shift site http://radical-shift.net/.)

August 5, 2013

Why does the Left promote poverty pay?

Filed under: Uncategorized — felipewh @ 11:56 am

With the rise of zero-hours contracts, and campaigns for a living wage, it is distressing that so many wages are low, but heartening that living standards are at least becoming a political issue.

Some of the most vociferous campaigners, however, are unwittingly undermining their own case, by exaggerating the business benefits of low wages. The Guardian-Observer, for example, the leading centre-left news journal in the UK, gave the issue considerable coverage on 28th July, with news coverage and letter-writers angrily denouncing the ‘scandal’ of low pay. Some of the contributors, however, repeated the common error of assuming that wage costs = employment costs, and that it’s in the interests of the business to keep wages at a minimum.

I duly submitted a letter for publication pointing out this error, which unsurprisingly went unpublished. A full text is below. If you care at all about low wages – and about the cause of low wages – please publicise this.

Low pay is a perfectly avoidable scandal

I do despair when I come across Observer readers and trade unionists who enthusiastically promote low wages in the private sector. Many of your correspondents (Low pay is not only a scandal it disenfranchises the young, 28 July 2013), repeat the common assumption that low pay maximises profits. SJ Closs, for example, argues that the ‘only way’ a private company can reduce its costs is to reduce wage and benefit levels.

It turns out, however, that this is not true. The direct cost of employing people is only a part of total employment costs, and is often dwarfed by factors such as poor skills, weak leadership and low engagement.

After 15 years of writing and researching on the subject, I have come to the conclusion that the cultural belief in low wages as a commercial priority has three main culprits:

  1. Domination of accountancy. This leads to the false equation that wage costs = employment costs.
  2. Right-wing economic theory. Milton Friedman urged a ‘costs-based’ approach to management, neglecting matters such as employee engagement and skills.
  3. Left-wing economic theory. Karl Marx’s surplus value is the same zero-sum calculation as Friedman’s. It finds its contemporary shape in trade unions’ ‘social dumping’ argument, which also actively promotes low wages in the profit-making sector.

Neither Marx nor Friedman based their ideas on what actually happens in organizations, where some of the most ethical employers (WL Gore, John Lewis Partnership etc) are also some of the most successful.

Low pay is not just a scandal, but a perfectly avoidable one, created by centuries of bean-counting, Marxism and neo-liberalism. It has all been a terrible mistake.

Sincerely

Philip Whiteley

  • Our case study in New Normal Radical Shift, on how a living wage helped productivity and service standards for Marks & Spencer suppliers in Bangladesh, can be found on this link.

August 1, 2013

Readings and songs from Meet the New Boss: 7th September

Filed under: Uncategorized — felipewh @ 1:47 pm

Special Announcement from Ampthill Writers 

An evening of readings and acoustic songs …. In preparation for the inaugural Ampthill Literary Festival, 2014

Have you ever wondered why work gets a bad press? Or why songs about hard toil and the nine-to-five make such a great soundtrack? Ampthill author Philip Whiteley presents readings, observations and a selection of songs on the theme of work, based on his award-winning publication Meet the New Boss. He will be joined by Peter Webster and Ross Fergusson, plus special guests, to play some classic songs, including: Between the Wars, Nine-to-Five, We Gotta Get out of This Place, and more.

Free excerpts from Meet the New Boss: http://www.whiteleywords.com/Phil/books/new_boss_extract.html

Buy the book here: http://tinyurl.com/okfvkjn

Ampthill authors – Screenplay writer Simon Michael and best-selling thriller writer Adam Croft now confirmed

Date: Saturday 7th September 2013. 08.00pm-10.00pm

Venue: Postern Piece Farm, Bedford Road, Ampthill MK45 2EX

Special note: The readings will be by professional authors. The music will be by professional musicians and singers. For the most part.

Admission free: but RSVP, as places are limited, to:

phil@whiteleywords.com or max@haymax.biz

June 4, 2013

My talk to Human Potential Accounting

Filed under: Uncategorized — felipewh @ 10:55 am

On 23rd May, I gave a talk to a London meeting convened by Human Potential Accounting, to mark the lanuch of the Human Capital Handbook. One quote: “When both left and right argue that low pay maximizes margins, it’s hardly surprising that there’s a lot of low pay – something that, I would argue, benefits no one.”

May 30, 2013

Food banks, Big Data and a refusal to learn

Filed under: Uncategorized — felipewh @ 9:25 am

Three articles this week, mostly depressing but with a glimmer of hope in one, offer a vivid portrayal of our technologically rich, economically unequal, debt-ridden, politically anachronistic and remarkably conservative and incurious society.

In The Independent, a report that use of food banks in the UK has shot up. The usual suspects are highlighted: delays in benefit system; curbs to benefit increases, pay freezes. Not mentioned in the report, for political reasons as the title is anti-Coalition, is the high level of personal debt in the UK, which soared under the last Labour government – and under the Conservative government before it – as a 2010 Bank of England Working Paper notes: up by more than 50% between 1987 and 2006.

Inventor Jaron Lanier, in a report that led to a lively discussion on the Radical Shift Linked-in group, noted how social media and other consumer firms are using Big Data to manipulate consumers. Simon Caulkin, spot on as usual, relates how corporations have been captured by the neo-liberal cult of only caring about shareholders, focusing on the short-term, and enriching a few.

There is one matter on which the neo-liberal zealots and The Independent agree: that extreme inequality helps the corporations. Over the longer term, especially, this is not consistently true. As discussed repeatedly on this blog and on Radical Shift, low pay does not maximize profits – this is a cynical myth supported by right-wing and left-wing economics. We have known since at least the 1930s and the Hawthorne experiments, that the way in which you treat workers is the single most important element in enhancing performance and the customer experience. The more ethical employers are also some of the most successful.

What is depressing this week is the extent to which there seems to be a refusal to learn: an insistence that low pay is inevitable or helps economic efficiency; that corporations cannot have a soul or a conscience; that only the state – itself massively indebted in each of the major economies – can help those on low incomes.

We have highly advanced electronic communications yet continue to neglect human communication. We think data is the hard stuff and relationships are the soft stuff. Corporations, keen to apply 21st Century Big Data, have yet to apply management research from the early 20th Century. Some progress. Half a century ago Martin Luther King complained that we had guided missiles but unguided people; we made progress in technology, but not in governance and leadership. Still the case.

I hate to be pessimistic, so now to the glimmer of hope. In Simon Caulkin’s piece, there was a report of a radically different vision of capitalism, one in which all of society stands to benefit. The head of McKinsey, no less, Dominic Barton said that capitalism had 10-30 years to reform itself. The business schools must follow suit. It’s challenging but not impossible. There are highly enlightened practices emerging from many supermarkets and consumer multinationals, especially on sustainability. You can read some examples in New Normal Radical Shift.

May 3, 2013

Left-right politics keeps wages down

Filed under: Uncategorized — felipewh @ 9:37 am

One of the biggest misconceptions in management and politics is the idea that careers, good earnings and self-esteem only matter to high-flying graduates and the ambitious upper-middle class. One of the most heartening lessons I’ve learned in recent years has been the example of enlightened employers bringing better wages and careers prospects to people such as cleaners, security guards, gardeners and workers in clothing factories.

There are, however, two major obstacles to spreading this amazing and enlightening example. One is right-wing politics. The other is left-wing politics.

The misanthropic nonsense that has emerged from neo-liberals in the past half a century is a major contributory factor, with their absurd notions of people as ‘human resources’, or ‘cost units’. Outsourcing decisions have been based on the notion that it’s rational to transfer a service across the world to where the wage rates are x per cent lower. This is simplistic and risky from a pure business point of view, never mind the ethics.

But it’s also worth exploring the contribution of liberals in the arts, in maintaining the idea that an unfashionable job in a factory or shop or office is type of prison from which one ought to escape. I explore these ideas in Meet the New Boss.

Worse still, left-wing politicians, instead of challenging the exploitative neo-liberal business model, lend ideological backing. The recent fire in a clothing factory in Bangladesh was proof, left-wing bloggers thundered, that ‘capitalism’ puts profits ahead of welfare and safety. The fact that you can make more profits by treating workers well is something that the reactionary forces of the left and the right want to keep hidden from us.

As we describe in New Normal, Radical Shift, Marks & Spencer actually improved their margins when they moved to a living wage policy in Bangladesh.

Ed Miliband, UK Labour leader, has recently spoken in favour of a living wage policy, which is a mighty step forward. Unfortunately, he does not consistently believe in the business case. Just a few months ago, he predicted that people would be fired all over the place ‘if their employer didn’t like them’, should labour regulations be lessened even slightly; and he seems to think that businesses have to be bribed with tax cuts in order to implement the living wage.

A truly progressive policy would make living wages and enlightened leadership in the public and private sector the centrepiece of economic and business policy, as well as social policy. There is no benefit to low wages and miserable working conditions. NONE AT ALL. It has all been a terrible mistake, sustained by right-wing and left-wing political beliefs.

Excerpt from New Normal, Radical Shift:

Centuries of Marxists and neo-liberals claiming that exploitation is the way to boost margins, encourages the worst types of managerial style to be deployed. Employee relations can descend into a self-fulfilling, vicious cycle of mutual fear and threat, with management and unions seeing themselves as being on opposite sides of a conflict, each keen to get their retaliation in first. This unhealthy dynamic was the principal cause of the collapse of entire industries in some western countries in the 1970s and 1980s, and was largely self-fulfilling, based on inaccurate and cynical political philosophies.

April 30, 2013

Radical Shift: Leadership book challenges economic and political beliefs

Filed under: Uncategorized — felipewh @ 9:31 am

Following the banking crisis and amid increasing environmental pressures, it is clear that the dominant business model in the west is unfit for purpose, and that the dash for short-term growth at any cost has led to economic ruptures and, in some cases, ruin.

There are many books that demonstrate the benefits of enlightened leadership, engaged employees and environmental protection. New Normal, Radical Shift – now available for sale – is different. As well as charting the evidence that demonstrates the effectiveness of strong leadership, it questions the habits that undermine good practice. The authors, Neela Bettridge and Philip Whiteley, have used their experience as, respectively, executive coach and journalist, to explore the beliefs that have encouraged many to believe the opposite: that exploiting the workers and the environment maximizes corporate profits. They chronicle the damage that such cynical beliefs have brought, and discuss their origins in political theories, forming the momentous conclusion that the ‘left-right’ way of viewing economics and society is profoundly flawed.

New Normal, Radical Shift calls for a fundamental renewal of the business model, and a much higher priority for governance and sustainability, including environmental sustainability, in political circles.

The authors report how the organizations that have hit crisis – many western banks, and those firms brought down by accountancy scandals or reckless merger activity – followed the cynical fads that had their roots in political ideology. By contrast, many principled organizations that refused the dash for short-term or speculative profits have proved to be more profitable as well as more ethical and sustainable. The book sets out an alternative business model that is at once more practical and more positive. It features case studies with leading employers that have delivered for all their stakeholders. These include: Westpac, ISS, the Prospect trade union, and Marks & Spencer.

Neela Bettridge says: ‘The most effective business leaders understand that the modern corporation has high levels of inter-dependence and requires correspondingly high levels of cooperation. This is an inescapable reality, not a “nice-to-have” extra. In my coaching work, I encourage individuals to become emotionally, spiritually and analytically intelligent. This book explains the context and the commercial relevance for such disciplines.’

Philip Whiteley says: ‘For decades, working as a business journalist, the priorities of management fads have struck me as illogical and damaging. In particular, the tendency to overlook the importance of employee relations, despite its fundamental importance to how the organization functions, is a major weakness. I’m delighted to partner with Neela to put together a comprehensive book that seeks to rectify this and other weaknesses.’

April 13, 2013

Japanese motorbikes, flying pickets and Margaret Thatcher

Filed under: Uncategorized — felipewh @ 9:28 am

It was a shiny new 750cc motorbike, and the brand on the petrol tank said ‘Yamaha’. I was surprised. My patriotic friend had for years been extolling the virtues of British motorbikes, riding a reconditioned Triumph, but by his 18th birthday had switched to the Japanese marque.

This was the late 1970s/early 1980s, a period of British history recently revived in the collective memory following media coverage of the death of Margaret Thatcher. Nothing more clearly symbolized the decline of manufacturing in the UK, and the superior industrial leadership, skills, teamwork and product quality of Japanese (and also German) companies at the time. Even the most fierce patriots had to succumb. British police rode BMWs.

Most of the recent coverage falls into a partisan pattern: the Iron Lady either rescued the country from union militancy and bankruptcy, or savaged it with class war and unemployment. There is an alternative perspective; that it wasn’t the unions or the Thatcher Government who destroyed large swathes of British industry, so much as the fight between them; an ugly left-right sectarianism that prioritized inflicting damage on the other constituency ahead of building businesses with good pay and prospects, strong teamwork and skills. This was a colossal and historic failure of leadership – both of industries and of unions.

It culminated in the restructuring of the coal industry being settled in quasi-Mediaeval battles between flying pickets and policemen, in the hideous – and largely gratuitous – year-long strike in 1984/5. This was no way to modernize an industry, and Thatcher’s description of miners as the ‘enemy within’ was shocking and undeserved for communities who had served their country with courage in peace-time and war. But the idea that the industry didn’t require modernization was unrealistic.

At least as much blame falls on the unions for the decline of industry. Much of the militancy was gratuitous, with political ambitions. In the 1980s I was talking with a Workers Revolutionary Party veteran who said that during the 1970s their members, fired up by the protests of 1968, were directed to go into unions in targeted industries: automotive, ship-building, etc, with a view to disrupting entire industries and preparing the way for revolution. They spent long days door-stepping the mining communities. It is possible to overstate this influence, but it was a shocking revelation that tales of revolutionary activism in left-wing unions was not, after all, dreamt up by the Daily Mail. It’s an aspect of the history of those times that you won’t find in The Guardian or the New Statesman. Manufacturing was destroyed by class-based, short-termist management and Marxist-influenced unions. Thatcher was merely the undertaker.

Another under-reported feature of the era concerns the fall in support for the parties of left and right. To hear them talk, then and now, you would think that they represented the whole of society between them. In fact, millions of voters deserted both. In the election of 1970, Conservatives and Labour had polled nearly 90 per cent of the votes between them. By the election of 1983 this had fallen to just 70 per cent: a 20 percentage-point fall during the years of militancy. Of the two, Labour lost much more.

While class warfare and employer-union militancy are thankfully now reduced – Triumph are even exporting motorbikes again! – the cynical theory that you can only win by exploiting the other side lingers on. My new book New Normal, Radical Shift, co-authored with Neela Bettridge, points to a future based on an understanding of inter-dependence; not in a romantic way, but as a pragmatic approach to building better organizations.

March 28, 2013

Expense is not cost; people are not resources

Filed under: Uncategorized — felipewh @ 11:24 am

One of the many baleful examples of an accountancy-dominated business model is the pretence that the numbers tell the whole story. Commonly heard in management circles is the mantra: if you can’t measure it, you can’t manage it. This is nonsense. At the very least, 50 per cent of management is un-measurable, because you cannot measure the impact of a course of action you decided not to take. Every time a manager takes a decision, there is an unquantifiable opportunity/risk that is passed over. Real management involves forming a judgement on hypothetical matters; it also means being comfortable with paradox. If you only manage what you can measure, you cannot manage at all, you can only add up.

What is worrying is that the ‘financial data tells the whole story’ myth is creeping in to the personnel profession, as my new article in Personnel Today reports. Many employers are pretending that reducing the direct costs of hire always results in lower operating costs, neglecting matters such as morale, skills, communication and so on that have a direct bearing on efficiency and operating costs.

As economist Haig Nalbantian describes in this article, there is a difference between ‘expense’, the direct costs of hiring people; and ‘cost’, which is an economic construct that depends upon collective performance. The measures that he and his team have developed over the past 20 years are far more sophisticated and valuable to a management team, because they analyse the inter-relationships between deployment of people and types of reward and training, and the impact on the business.

Even here, though, a judgement has to be taken; Haig refers to ‘sleuthing’, because data, even sophisticated data, cannot tell the full story. I sometimes liken it to forensic science in a court case: necessary, but not sufficient. You also need to know about motive and relationships.

This is not an argument against measurement; it is an argument both for better measurement and for an understanding of its limits.

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