Looking back at all the mighty companies that have fallen in the last 20-30 years makes you realize how much on a knife’s edge so many companies operate – whilst looking so solid from the outside. Although there have been examples of prolonged death throes, the precariousness of many companies was either not known up until a few days before their demise or – as in the case of Enron and MCI-Worldcom – only known to a few at the very top.
To the extent that our glorious world is divided (to quote King Lear) between rogues, fools and madmen – with some evident exceptions (such as the author and reader) – so too is the world of corporate business. When disaster strikes it is therefore due to one of the three perennial causes and in the thick of it is HR not doing its job of being the conscience of the business.
For me the biggest shock was not the fall of Lehman Brothers. That was just the first peg to pop out of the tray as the economic landslide hit. Woolworths too was one of those rare long drawn-out agonies. Bethlehem Steel and Compaq simply lost the plot and Tower records lost its shops through straight mismanagement. What for me was the most seminal collapse was Arthur Anderson. The moment credibility is lost the whole structure collapses – and auditors are the last body you expect to fail.
So as the twenty-first century advances what have we learned about management and economics? Very little I fear. We keep following the leader, even though they often turn out to be the Pied Piper, we are risk aversive when we should be courageous and cautious when we should be taking a punt. HR management hides when it should stand firm and the banking system – that should be the economy’s solid core – turns out so often to be its soft pathetic core. Governments are just a sleazy club for the third-rate on the “make” and we cannot even go swinging down to hell in a handbasket – because dear Liza has found a hole in that too.