Calculating The High Price Of Zombie Leadership

The recent report by the Parliamentary Commission on Banking Standards (chaired by Andrew Tyrie MP, Lord Lawson and incoming Archbishop Justin Welby) stated that “The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for [the] disaster, with Andy Hornby [his successor as chief executive], who proved unable or unwilling to change course, and [former chairman] Lord Stevenson, who presided over the bank’s board from its birth to its death,”. The Commission also called for this trio from the top of HBOS to be banned from working in the financial services industry.

This story of financial incompetence or mismanagement begs several big questions about governance (what were the other directors doing whilst the ship was sinking) and of what Mind Fit Ltd has begun to call the absence of “Critical Adaptability^TM” (CA): the ability to successfully apply Can-Do behaviours from one context, within another.

The Report suggested that Sir James’s appointed senior directors with inappropriate experience to key roles. What is fascinating is the assertion the “The weakness of group risk in HBOS were a matter of design, not accident,” the report declared. “Responsibility for this lies with Sir James Crosby, who as chief executive until 2005 was responsible for that design [which led to] “a culture of perilously high risk lending” involving £46.7bn.

What is fascinating is that Sir James sold around two-thirds of his shares in HBOS in the two years before its collapse. Which poses the question: if he could forsee the collapse, why didn’t he do something about it? What prevented him, and others from doing the “right thing”?

At some point, Sir James may provide a convincing narrative that explains this relentless pursuit of incompetence. Perhaps he and others knew things that couldn’t be revealed to the Parliamentary Commission, insights that will come out in the fullness of time. Perhaps.

But on the other hand, Sir James and the others are not alone in their relentless Zombie-like pursuit of mediocrity. They are merely a few from within a select Zombie cohort who focused on institutional careers, who encouraged investment dead or unsustainable Zombie ideas, long past their sell-by date. 

The 2 key elements of Critical Adaptability are Mapping and Exploitation: the ability to map the relative flux change-vectors within your operational and social context, and their ability to impact you; and the ability to apply thinking tools that enable pattern recognition and their exploitation.

Consider how many politicians, religious leaders, policemen and generals, journalists and business leaders who are still working at the head of major institutions, still relentlessly, uncritically pursuing Zombie business and social business formulae to elevate careers, that were only viable before 2008, viable within an artificially-growing economy based on unlimited debt? Leaders who have successfully quashed, sacked or paid off generation of whistle-blowers, and recruited waves of deferential, submissive managers to build heightened levels of disengagement at the front-line, as the tax-payer picks up their tab.

On BBC Radio 4’s Today Programme, Mr Tyrie refused to say whether he would like to see Sir James or Lord Stevenson stripped of their titles. He said "That is not our job, we were not set up as a Banking Commission to strip people of their titles… I don't think the public are so concerned about knighthoods, what they want is reassurance that they won't get hit by this again, that people who do such damage are identified and are prevented from practising and that people should not be allowed to gamble with our money and then walk away with huge bonuses."

At least with bankers you can quantify the cost. The HBOS “culture of perilously high risk lending” involved £46.7bn. Their incompetence could be quantified. Just imagine how big the sum could be of accumulated Zombie Leadership in politics, public service as well as industry.

Imagine the size of the bill that we aren’t even aware that we are currently paying?