The Strains Of Strategy Fall On Corporate Culture

Michael Hedges September 12, 2013 Follow on Twitter

Corporate culture is a curious notion, often at odds with corporate structure. Public sector corporate culture can be either stimulating or fear inducing depending on leadership. Mission and its relevance to the public at large can be easily dislodged by indecision as much as bad ones. A positive corporate culture can embrace the ambiguity common to today’s media world but it cannot forge a path without strength of conviction.

A committee of the UK Parliament hauled before it this week current BBC Trust chairman Lord Chris Patton, former chairman Sir Michael Lyons, former BBC Director General Mark Thompson and other mere mortals for the periodic dressing down. The chief inquisitor was House of Commons public accounts committee chair Margaret Hodge. Questioning addressed severance and separation payments to executives in response to political demands to reduce the BBC headcount. Employees unsure of their own futures pay close attention to these details.

Severance payments to exiting BBC executives and managers during the three-year period ending last December “breached its own policies… too often without good reason resulting in payments that have not served the best interests of license fee payers,” concluded a report by the National Audit Office (NAO) released in July. The auditors hammered pay-offs to top executives, several with decades of service, as “poor value for money.” Outrage followed, not simply from politicians, some still smarting from news reports of MP’s dubious expense claims, but also from rank and file BBC staff preparing for industrial action over wages and benefits. The NAO report was triggered by headline grabbing outrage over the severance payment to BBC Director General George Entwistle, fired after a mere two months tenure and recipient of the contractually obligated full-years salary.

At the top end, the severance and separation payments were, at worst, embarrassing. The NAO found many discrepancies between policy and practice. Deputy Director General Mark Byford, a BBC lifer, received nearly GB£ 1 million in a settlement negotiated nine months before he left in June 2011. A memo from Mr. Thompson to the BBC Trust, published by the NAO last week, indicated that Mr. Byford could be entitled to as much as GB£2.5 million, public backlash from which likely “enormous.” Mr. Byford was the “details guy,” Mr. Thompson the “strategy guy,” and its generally felt within the BBC that the judgment errors of Mr. Thompson’s successor, Mr. Entwistle, would not have been possible under Mr. Byford’s watchful eye.   

For UK politicians and headline writers the looming Nixonian question has been who knew what and when. BBC Trust chairman Lord Patton and Trust member Anthony Fry pointed at Mr. Thompson when called to Lady Hodge’s behest in July, saying the Trust had been kept in the dark about the various pay-offs. Mr. Thompson rattled the UK media establishment – and not a few politicians – by leaving the BBC and, rather than slinking off into obscurity, becoming CEO of the New York Times Company. In this weeks hearing before MPs, he vociferously contradicted the current and former Trust chairmen and noted that he’d been under “ferocious pressure” to lop off executive heads at the BBC.

The BBC Trust was created in 2006 to “(set) the overall strategic direction of the BBC, including its priorities, and in exercising a general oversight of the work of the Executive Board.” The BBC Board of Governors was scrapped as too malleable under political pressure. Lady Hodge called the Trust “broken” and other UK politicians announced victory, predicting the Trust will disappear in 2017 when the current Royal Charter expires.

Other European public broadcasters – large and small – make executives, managers and staff redundant, downsizing being the face of reorganization plans. Generally, these plans flow directly from government ministries, terms set by public law on public sector employment. The Greek government’s firing of the entire staff of public broadcaster ERT earlier this year was an exception. Directors general or their equivalents will often leave office with government changes, quite often flowing gracefully to similar employment in the public sphere.

Corporate culture is no less apparent in the public sector than in privately owned enterprises. Indeed, it may be stronger with loyalty built on mission. In the private sector corporate culture is almost wholly determined by leadership, often the strong presence of founders like Bill Gates, Steve Jobs and, yes, Rupert Murdoch.

In big organizations, public or private, sub-cultures rise to fit a variety of narratives. Old guard employees gravitate to one, new employees to another. Creative types to theirs and techies to theirs. The BBC is typical of a large organization with many sub-cultures and it’s been said that a captain can only steer when he sees both ends of the boat. For the BBC, the admirals keep sending up smoke.

See also in ftm Knowledge

The BBC

Few pure media brands transcend borders and boundries to acheive the iconic status of the BBC. The institution has come to define public service broadcasting. Yet missteps, errors and judgment questions fuel critics. The BBC battles those critics and competitors and, sometimes, itself. 119 pages PDF (February 2012)

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