Liz and Julie go to the Bank

‘One has overspent’ screamed the headline from i, the Independent’s ‘quality tabloid’, thereby putting a flame to the ‘quality’ bit of that Unique Selling Point.

This was the revelation that the royal household hasn’t been too good at balancing its budget, primarily in relation to the cost of maintaining so many Royal garrets up and down the country.

The story itself is piddly – a waste of £2m, while significant to Joe Q Taxpayer, is smaller than the smallest beer at the institutional/corporate/national level. Government departments waste this sort of money through over generous allocation of toilet paper every hour (probably). And anyway, someone won 50 times that much on the Euromillions last year, so live with it.

No, the underlying topic of how this lands in the public sphere is much more interesting. The i’s headline is telling: this mundane tale of some lackey failing to do his sums is turned into a SHOCK! expose that plays (by design?) to a well worn meme: our lords and masters are idiots and/or crooks.

This massaging of events is the harsh reality of what risk people call reputation risk. The term is often watered down to a vague narrative, such as ‘negative media exposure’, which doesn’t really do justice to the toxicity of the issue.

The truth is, I reckon HRH doesn’t really have anything to worry about – her public standing is almost unassailable. Probably second only to Julie Walters who can afford to appear in The Harry Hill Movie without so much as a smudge on her credibility. If you want to find a entity that’s genuinely vulnerable to reputation risk look no further than the Royal Bank of Scotland.

RBS was established in 1727 and spent nearly three centuries building a cachet that one commentator characterised as ‘Corporate Deity’ before watching it plummet to ‘Lower Than Whale Shit’ in a few short years.

The latest press grumblings have to do with executive bonuses – as expected. Such stories at least have the merit of actually being about the organisation. Other reporting can’t claim such distinction: the recent TSB/Lloyds/Bank of Scotland IT outage invited comparison with RBS (it had nothing to do with the firm). Even more bizarrely, a recent piece discussing historical perspectives of the First World war saw fit to gauge the quality of military command with the standard of management in RBS.

When your reputation amounts to being a yardstick for cock-up you know you’ve got a problem. How do you bounce back from that? Time and hard works, perhaps – but don’t be too sure. Just ask British Rail which once, many years ago, claimed ‘leaves on the line’ had been sufficient to disrupt train services. That particular piece of communications genius has become a sort of national shorthand for incompetence and even pops up in the current Audi advert.

For their part, I think Risk people need to do more to explain reputation risk – more helpfully thought of as a consequence of operational risk – to better prepare the executive classes for the true impact of their decisions. It’s no exaggeration to say that, in some cases, hundreds of years of work could be at stake.

Too Much of a Good Thing

Choice – what’s not to like?

Choice – and plenty of it – is what progress looks like. Or so we’re told. The engine for delivering choice is, of course, the free market where, the theory tells us, the exercising of choice will allow the cream to rise to the top, leaving the optimum result. Happiness and contentment follow. Job done. 

Nice idea. However, I wonder if having lots of this choice thingy is all it’s cracked up to be. What happens when the sheer number of choices becomes bewildering, when there is simply too much to choose from? Ever been to a toy shop with kids itching to spend their allowance? Choosing can become frustrating and discontentment can follow from exposure to all the stuff they can’t have. 

The same can be said for television broadcasting (so many channels – which one to watch??), household technologies, clothing, insert the commodity of your choice (there it is again, see?). 

And what happens when the choice is about something that’s long term, complex and important, such as financial products? The theory says that, by the almighty power of the market, poorly designed, badly priced products will fail, leaving us with top notch, well designed and fairly priced pensions, savings and investment vehicles.

Take a look around. Any new mis-selling scandals? Be patient, there’s bound to be one along in a minute. 

Of course, we might argue that the market’s ‘invisible hand’ is still at work. Perhaps, but if so, are we to accept that, in the interim, countless thousands can expect to be disadvantaged as the market balances itself out? Ouch.

Musician Peter Gabriel makes the observation that the worst thing you can give an artist is lots of options: narrowing choices – for example, by limiting materials or time – forces creative thinking, driving new ways of working and unforeseen solutions. There’s also the often overlooked satisfaction that comes from working it out for yourself.

It’s a compelling perspective and one that’s lost on many people used to living and working in the land of plenty: too much of a good thing can be a real problem. In such an environment making choices requires discipline, the mental rigour to weigh a rational analysis of options against gut feel and make a clear-headed assessment of wants and needs. 

Making choices becomes increasingly difficult as the number of options increases and yet, making good choices underpins contentment and happiness – and it’s good for business.  In affluent societies learning to make choices should be seen as survival training.