Thirty years ago I was a middle manager in the construction industry. I found myself a member of a small team that went into loss making projects and turned them around. By the time we were called in much of the damage had been done but usually we could turn burgeoning losses into small profits.

Later on I lead the team.

It all became rather routine. We turned up one-third of the way through a contract to find money flowing away like water through desert sand. All sorts of nice people, drawing fine salaries and eating in the best restaurants and doing a few hours work every day whether they needed to or not left execution in the hands of their supervisors. Their supervisors, with no power to affect policy or direction, dealt with the day-to-day problems that landed on their desks and congratulated themselves loudly round the bar every evening.

The supervisors were all superb ‘fire-fighters’. They put out one organisational or technical fire after another without ever asking ‘should that fire have been there in the first place?’

If there was no fire to extinguish they lit one.

As the leader of the turn-around team I asked, on a daily basis ‘what are our objectives here?’, ‘Why are we doing it this way?’, ‘Why are we doing it at all?’. I was something of a bore. I sent home dozens of ‘nice chaps’, and few of them ever knew why though I had told them clearly enough.

As I got better at it I turned around operations, then operational bases, then subsidiaries and then whole companies. What I failed to notice was that the boards I reported to were made up of the self-same ‘nice chaps’ that I had previously sent home.

You see, I hadn’t detected the flaw in my own strategy. The nice chaps who wrecked that company, took it to the brink of bankruptcy so that it had to be rescued by the government – I’ll not tell you which government’ liked big numbers. I dealt in hundreds of thousands; they in millions. I was a small-time operator, they saw the bigger picture.
They counted the number of noughts and ignored the little ‘-‘ in front of them.

Now, in a completely different industry we see the same ‘count the noughts’ philosophy coming to the fore again. The mistake of mistaking turn-over for profitability and ignoring risk has resulted in mighty financial institutions failing on a weekly basis…and the lesson still hasn’t been learned! We see people rewarded in millions for their talents in bringing their organisations to their knees.

But I have to say I thinks that’s only right!

You and I wouldn’t know how to wreck Leeman Brothers, or to bring HBOS down, or even on a smaller scale how to write off Northern Rock. We remain small minded and parochial.
When my little company failed in the 80s the bank manager said ‘awfully sorry, but we’re foreclosing’.

He was a 'nice chap'. He’s probably closed down dozens of small business in his climb to the top. He’s banked his bonuses. He’s might by now have worked out that this year’s bonus won’t match last year’s.

Poor man.