When life assurer Friends Provident listed on the London Stock Exchange in 2001, then FD Martin Jackson acknowledged that his company had to tread carefully where company culture and heritage were concerned.
“The situation is balanced because we have a long history of being a mutual, and we have a good history in socially responsible investment,” he says. “With Friends Provident’s heritage, we have got a proportion of policyholders that are tied to the history of the company and the mutual status.”
Friends went ahead with the flotation and most policyholders were looking no further than the immediate cash benefits of demutualisation – historical continuity came second to long-term survival. But Friends’ predicament begs the question of how important company history is in making strategic decisions that affect the here and now of business.
Many large companies have their histories written up in large dusty tomes for the delight of the academic community and little else. And, on the face of it, the founding fathers and principles of age-old businesses have little to do with successful business in the 21st century, where the corporate motto ‘change is the norm’ reigns supreme.
Ken Temple, partners’ counsellor for the John Lewis Partnership, is a great believer in the power that company history has in shaping an ongoing business. “I’m what other companies might term director of culture. I’m paid to think about what makes us different as a business. My job is also to influence people in executive management so they can think about what makes us different and apply that in their day-to-day management,” he says.
Temple says that John Lewis’s success over the past 75 years has been down to its stakeholder structure, where the people working on the shop floor also own the business. “We are owned by a trust that has existed since 1929 for the benefit of employees,” Temple says. “That means all our partners are co-owners of the business and have a personal sense of responsibility for it. I’m certain that gives us huge competitive advantage.”
And while Temple admits that few employees have a sense of John Lewis’s history, its structure, ethics and the principles that have remained unchanged for nearly a century must continue to be promoted within the business to retain a competitive edge. “The ultimate aim of our business – and it’s the same as it was 75 years ago – is that wacky, hippy, tree-hugging thing called happiness, and happiness comes from worthwhile, satisfying employment in a successful business,” he says.
He says that age-old principles also apply to John Lewis’s suppliers. “We have always had a culture that says if we sign a supply agreement we stick to it. And if we say we are going to pay in 30 days, we will. We have never played fast and loose, and suppliers have come to respect those values.”
But Temple warns that companies should learn from the past without becoming victims of nostalgia and inertia. “We are trying to position ourselves in partners’ minds as a go-ahead company – not as something that is 75 years old and in late middle age. Rather than having a great sense of the weight of responsibility of history on our shoulders, we want to have a good understanding of our core values and shift away from the bits of our history that represented structure and administration. Some of the things that worked well in 1950 do not work so well now,” he says.
One company that has spent a lot of time and money charting its history is BP. At its corporate archive, housed at the university of Warwick, correspondence and other literature going back to the company’s foundation as the Anglo-Persian Oil Company over 100 years ago is carefully catalogued and managed by a team of BP staff. Jim Bamberg, a Cambridge University academic and official historian of BP, says that while the BP archive is open to the public for the purposes of academic research, the reason for keeping business records goes beyond curiosity value. “People can use the archive for many uses – research into the company, the Middle East, health and safety, etc,” Bamberg says.
“But BP also uses its knowledge of the company’s history for staff training. BP runs courses that get people out of their day-to-day jobs, where they are small cogs in a very big wheel, and tries to get them to look at the big picture of the company.”
Like Temple, Bamberg is keen to stress that BP is a forward-looking company, but BP’s past achievements are what have shaped it. By looking at the good and bad points of BP’s history, staff and senior management are better placed to generate growth in the future.
“BP doesn’t employ mechanistic processes for learning from its past. It uses its history in a more subtle way to communicate achievements. The history I am working on is candid and frank, but it is important to communicate BP’s mistakes, too,” Bamberg says.
BP publishes huge amounts of information on its website covering its early history, including ethical principles, values, statistical data and detailed reports on the company’s impact on society over 100 years. But the tremendous growth in information, especially electronic information like email, means that companies are finding it increasingly difficult to manage and interrogate their filing systems. Recording company history is no longer just about archiving a few handwritten notes from the chairman. “Every day, millions of messages pass through company computers and some of these messages have tremendous historical significance for understanding how we do business. The trick is to know which ones to keep for posterity and which to discard,” says Bamberg.
“The question of email is something the archiving profession is trying to address,” explains Bamberg. “My own feeling is that email has replaced the telephone and so we have a trail of information. Keeping electronic messages is a challenge, but a lot of archive resources can be made available on the internet. Email is not a threat to keeping good records of what your business is doing, it is an opportunity for improving the way in which some of a businesses historical knowledge can be used.”
But not all companies have BP’s resources for storing communications data. Nick Hood, senior partner at 170-year-old insolvency firm Begbies Traynor, says companies have to get more selective about what data they keep.
“I see it as largely about a fundamental change in how companies run their offices and processes these days,” says Hood. “Back in the good old days, when everything was kept on paper, people saved everything. We are now moving to double documentation, where there is lots of electronic traffic kept on a sporadic basis, and paper copies being printed off and filed. It’s a mish-mash of two different systems.”
Hood says that a lot of the information a company needs to store in order to understand where it has come from is lost somewhere between these two systems. “Companies need to understand better the day-to-day implications of not being good at selecting the right information and hanging on to it,” he says. “How many companies can tell you what they were displaying on their websites a few months ago? Not many.”
Interestingly enough it appears some companies are more proactively selective about the information they keep than others. On the companies history section of Marconi’s website, for example, it appears that very little actually happened between its birth out of GEC in 1999 and financial restructuring in 2003 – perhaps its share price falling by 90% twice didn’t merit an entry. Likewise, US telecoms company MCI doesn’t seem to be forthcoming about its old name on its site – perhaps no one would remember WorldCom anyway. Top marks for disclosure to Xerox, however, which is full and frank on its website about a 2002 SEC investigation into the company’s accounting methods.
Hood believes that those companies which cannot afford dedicated archiving staff should nominate a champion within the business who becomes responsible for continuity on culture, ethics and principles. “You need someone in the organisation who can keep the company’s history alive – someone to make practical and sensible decisions about what information is kept, and for how long. In Begbies Traynor, that champion is me, mainly because I have been around longer than anyone else,” Hood says.
One of the first steps a company can introduce to prevent the loss of valuable data is to stop employees using the hard disks of their computers where information is not archived. “Employees who hold all their correspondence on their desktops or hard drives are, in effect, withholding their knowledge and experiences from the company,” says Hood.
Too much information stored in a chaotic fashion can also be damaging to a business, especially when that information is about customers. The need to get a better idea about a company’s customer history, and to prevent, for example, marketing the same individuals several times, is one of the reasons why software systems such as customer relationship management have become so popular.
So when companies think about their company history and how the foundations of their business effect the way they do business today, they should also consider the way their current information management processes will effect competitive advantage in future. “It’s not just about knowing where you were 100 years ago,” says Hood. “It’s about having a grasp on who the company does business with now, why it has been successful, or not, in the past, and knowing enough of its own history to be able to function effectively.”
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