The Underdeveloped British Businessman

by Sheffield White

ENGLAND in the past few years has chewed on more self-delusion than any nation can be expected to swallow without acute indigestion. “English methods are the best methods.” “British craftsmanship is the best in the world.” “British radio is the best in the world !” Be the accent Oxford, BBC, or Cockney, the gist is the same: If it’s British, by definition it’s the best.

The economic situation today would not lead one to believe wholeheartedly in this opinion. England’s forecast growth rate for 1965 is 1.1 percent below that of 1964, and economists see the rate for 1966 falling to the discouraging figure of 1 percent. This is far below the forecast figures for France, 4 percent; Japan and the United States, 4 percent; and West Germany, 5 percent. With the rest of the West in if not a boom, certainly a reasonable facsimile thereof, England is today talking of a recession, worrying about balance of payments, and fearing the effects of a possible revaluation of the pound. And after years of pointing with unjustified pride at something they call “full employment,” workers are now being declared “redundant” (English for “unnecessary”) by the thousands.

A few months ago the largest British car manufacturer, BMC, put ten thousand workers on a four-day week. Other manufacturers are in the wait-and-see period. It appears likely that total car production will be down by more than 150,000 from last year. Domestic appliances, television sets, radios are also sliding off in sales, and gloomy are the predictions for fall and winter sales. But whose fault, and what’s the cure? You can hear almost any answer your prejudices desire. But three years as a director of an English company have given me a distinct feeling that Britain’s economic problems stem in large part from the British businessman himself, and he in turn is the inevitable product of the social environment of England.

One finds in the British public a debilitating willingness to go along with things, good or bad, as they are. There is an apathetic acceptance of shoddy merchandise, second-rate workmanship, and slipshod service. There is no passion for improvement, no sense of urgency. No one gets angry. The expressive action is not a shout but a shrug. All is passed off with “Not to worry. It will all sort itself out.”

The winter of 1962 was the coldest in memory. Since it is estimated that only 12 to 18 percent of the homes in Britain are centrally heated, what heat there is in London is provided by electric “fires,” or space heaters. When all these went on at once throughout the city, the load was too much for London’s electricity supply. So for days on end, when the cold was at its coldest, little or no heat was available. One can almost hear the angry crowds gathered around the city hall of any American city. But in London? Some grumbling, some grousing, but no indignation. “Not to worry. It will all sort itself out.” And the next winter came statements from the electricity board warning of coming electricity shortages if another cold winter should visit itself upon London. Nothing had been done to see that one of the world’s great cities should not be cold in winter.

This lethargy, this willingness to muddle through, this reluctance to remedy outmoded ways, pervades business as it pervades the entire scene.

A young man recently joined one of the largest travel agencies in London. As low man on the totem pole he started going through files. He found there a number of requests for travel rates, accommodations, and so on, each with its appropriate answer. He rather brightly thought that following up these requests might lead to some business, so he got on the telephone. He had completed three or four calls when his boss asked what he was doing. The young man told him, whereupon his boss answered, “This isn’t the way we do business. We don’t bother our clients. If they want anything from us, they know where we are.”

So is enterprise stifled in England today. There is still an abiding dislike, if not contempt, for anything that smacks of “salesmanship.” It is not performed on any level, from the managing director to the salesgirl at the counter. A charming Australian woman in search of gifts for friends back home in Canberra went into a Bond Street shop for scarves. She found an aisle table laden with them and picked out half a dozen, with thoughtful consideration for her friends’ tastes. “What are you doing with those?” a chilly voice asked over her shoulder. “I should like to buy them.” “Well, you can’t. These are sale merchandise, and the sale doesn’t begin for two days.” The Australian, not awed by British imperiousness, drew herself up and remarked, “No wonder your English economy is in such trouble,” and walked out the door.

Not so many years ago, the British motorcar industry had the Australian market wrapped up, with more than 70 percent of the market. Today British manufacturers have 12 percent:, because, like the salesgirl in Bond Street, they disregarded their customers. The Australians wanted a car designed for Australia, not England. The longer distances required cars with more powerful engines, more legroom, more comfort, and larger gasoline tanks. But the same four-cylinder, small, underpowered “suitable-to-English-needs” cars kept coming out. It was inevitable that the Aussies turned to the United States, and England lost another market.

More recently, the same trend of events has been seen in Nigeria. In 1959, Nigeria imported 4681 British ears and 4745 non-British. Five years later, in 1964, imports from Britain were just about the same, 4353, but the non-British imports had skyrocketed to 13,241. The total value of British cars imported into Nigeria has fallen from £3,800,000 in 1960, the year of Nigeria’s independence, to £2,200,000 in 1964.

There is nothing fundamentally inferior about the British cars, nor is price the problem. A British Ford Zephyr 4 at £1100 is virtually the same price as the French Peugeot Saloon. Yet in exporting to Nigeria, France has already overtaken Britain in this class of car: 2446 against 1593.

It is the Australian story all over again. The Nigerians need tough cars capable of standing up to their bumpy, potholcd roads. The French Peugeot, with its heavy springs and all-over rugged construction, fills the bill exactly, while to quote one British owner of a Peugeot: “British cars just rattle to pieces on these roads.”

JLHE English businessman makes little real effort to find out what his export market needs or wants. He makes it, be it car, ship, or dynamo, the way he always has, sells it on his own terms, and more often than not, as many an Englishman has confessed, fails to keep his delivery dates or live up to his service promises. This was all very well for the “lesser breeds without the law” in the days of the empire, but unfortunately, the lesser breeds aren’t lesser anymore. They’re smart fellows indeed, who know what they want, and if they can’t get it from England, there are plenty of places where they can. So they buy their ships from Japan, their small motorcars from Germany, their iron and steel from Alsace, and their almost anything else from the United States.

The English businessman simply does not know how to cope with competition, perhaps because he doesn’t like it, doesn’t want it, and believes if he does nothing about it, it will go away. He is quite comfortable in his cartel mind. He is happiest with high prices and high profit percentages; let sales take care of themselves.

A sales and marketing meeting took place in the conference room of one of the largest and most successful English manufacturers of food products. His leading product, once enjoying upwards of a 60 percent share of the market, was being vigorously and successfully attacked by an equally good but lower-priced product. What to do? One bold marketeer suggested: “Cut your price. Take a lower unit profit, and go after your competitors hammer and tongs with more advertising and promotion.” “Impossible” was the reply. “The directors would never stand for a profit cut.” The profit per packet was 47 percent!

This obsession with long profit margins apparently blinded British business to the lesson of John Bloom. Mr. Bloom took for himself 25 percent of the home-washer business in less than eighteen months. His method was simple and so well-known in the United States as to be trite. He made a good twin-tub washer, priced it way below the popular brands, and sold it door to door, with the aid of big blatant bombastic ads. British housewives, who, it had been thought, would never respond to this unBritish, high-pressure salesmanship, bought Mr. Bloom’s washers in bunches like bananas. But the message was never received, and Mr. Bloom’s subsequent failure, for reasons that had nothing to do with his salesmanship, justified the indignant industry in its indignation.

English business has still to discover, as American business did long ago, that high volume at reasonable profit is what makes the balance sheet bloom. Certainly there are some Englishmen who realize this, but they tend to be those with a deal of international marketing experience. Commander Whitehead, the bearded president of Schweppes (U.S.A.), Ltd., in 1953 dropped the price of Schweppes Quinine Water by 50 percent, and sales “Schweppervesced” 1000 percent over the previous year. Years later when introducing Schweppes Bitter Lemon to the United States, the high cost of ingredients and cross-country transportation dictated lower profit margins than the far from exorbitant 20 percent of the quinine water. The temptation to raise Bitter Lemon prices to return the same margin was hardheadedly resisted. Now Schweppes Bitter Lemon is a firmly established going product in major markets.

In fact, the whole Schweppes operation in the United States is, or should be, a clear object lesson to all British businessmen, not only those interested in export. Commander Whitehead reports that in its seventh year of operation, the whole of the English parent company’s investment has been repaid. And at the end of 1963, sales were twelve times over those of the successful year of 1953 (the year that itself was 1000 percent over 1952!).

SALESMANSHIP and marketing skill, however, are not the only, and perhaps not even the most important, deficiency of the British businessman. The Observer, a London newspaper not noted for going off half-cocked, reports that “the misuse of manpower in factories up and down the land is a crying scandal.” The prideful boast that England has few if any unemployed — “Look how much better we are than the United States, with 5 percent of your labor force not working!” — becomes empty indeed when the prefix “un” is changed to the more factual “mis.” This misemployment is not confined to the men at the machines. It finds its way into the executive office as well. One man in a managerial capacity for a world-famous textile firm left after five years. “Why I left,” he explained to a Sunday Times reporter, “was that for the majority of my time I was grossly under-employed. I spent three months in one of the factories knitting my own pyjamas. At no time was I given any responsibility or executive authority.”

Leslie Williams, vice-chairman of Imperial Chemical Industries, is quoted in the Observer as saying that the work now done by 160,000 ICI workers could well be turned out by 15,000 less. “It is no good pillorying the unions,” he says. “Management throughout Britain is blindly convinced that it is using the best possible system.”

Best it may be to British minds, but productivity figures suggest otherwise. At Youngstown Sheet and Tube, ninety-five people turn out $2,800,000 worth of steel; at Stewart & Lloyd’s, one of Britain’s largest steel companies, it takes 259 men to produce the same amount. Imperial Chemical Industries employs 167 people to produce $2,800,000 worth of chemicals, DuPont 101. And so it goes throughout British industry. According to Me Kinsey, the international management-consultant firm, turnover per worker in the United States is two or three times that in Britain. William Keefer, an American, is vice president of Warner Electric Brake & Clutch in the United States and a director of Westool Company, Durham, England. He reports, “With the same machinery the American workman turns out three times as much as his British counterpart. Even though we pay our workmen more than twice as much as in England, even though the United States is four thousand miles from Europe and England only two hundred, we can make the same product and undersell its English counterpart all over the Continent.” The figures he quotes carry their own warning to British business. The yearly output per worker in cash sales: Westool (England) £2400; Warner (United States) £9280. The British firm, of which Warner owns one third, employs 900, the American firm 1000. Yet the American company has annual sales of more than three times those of Westool. (And Westool is one of the most modern factories in England. It has three modern buildings with piped-in music and complete air conditioning.) The average wage of Westool is about $45 a week, plus $28 in overtime. Warner’s workers make about $105 per week, with an extra in overtime of another $45. So the American worker makes more than twice as much as his English counterpart, but he pays for this with his greater productivity.

In West Germany, too, the contrast is hardly consoling. Britain and West Germany are broadly similar in population and size of labor force. Yet in the ten years from 1953 to 1963, production in West Germany more than doubled; in England it has risen a discouraging 36 percent. Taking 1959 as a base, the index of national production in Germany has risen 32 points, in England only 17. During this same period, Germany’s share of world trade has gone from 18.5 percent to 20.2 percent, whereas England’s has sunk from 17.8 percent to 15 percent.

Real wages in Germany, with full allowance for cost-of-living increases, have doubled since 1953, compared with Britain’s increase of 36 percent. Here again, as in the United States, the German wage increase has been earned by increased productivity— 107 percent, while England lags sadly behind with little over 30 percent.

Yet in uses of manpower, to requote ICI’s Mr. Williams, “Management throughout Britain is blindly convinced that it is using the best possible system!”

This “best possible system” seems to be one based on the assumption that the “gifted amateur” is in some occult British way better than the professional. An example of this attitude is the way in which an English businessman will evaluate an associate. “Pilkington-Jones,” he will say, “is a splendid chap and not bad at his job either.” His American counterpart, making the same kind of judgment, will say, “Bill Jones is one hell of a sales manager and not a bad joe either.” The depressing thing to one whose entire ancestry, immediate and remote, is British, and who came to England with stars in his eyes, is the bleakness of the future.

One would expect that the older generation of managers, stuck with their built-in British prejudices, had messed things up a bit, but that the younger generation, brought up in a far more competitive world, would move in with new ideas, new energy, new skills, and put things right. The disappointing aspect of this theory, however, is that the vast majority of the new managerial generation are products of precisely the environment that produced their predecessors. They come from the same class, and class is still a dominant factor in British society. They went to and were conditioned by the same public schools and the same two universities. For though the grammar school and red-brick universities have had much publicity, their effect, if any, still lies in the future. One company, a large textile and chemical concern, openly admits it recruits only Oxbridge graduates. “They are the cream. Why should we look elsewhere?”

It is true, of course, that these new men are somewhat more aware of the times and its needs. They do exhibit somewhat more business radicalism than those they follow. It is hardly, however, the adventurous, searching imagination that at an earlier day in Britain’s life produced the Industrial Revolution. It is more of the pale-pink variety that rarely urges them into looking for new paths out of England’s economic morass. At best they seek to travel a little faster along the same old paths that led them into the morass in the first place.

Possibly one would not view the future in quite so gray a light if one could see the current delusions dying with the generation they nourish. A blow to this hope was delivered by two eminent British psychologists, Gustav Jahoda of the University of Strathclyde in Glasgow, and Henri Tajfel of Oxford. On September 3, 1965, they presented a report to the British Association for the Advancement of Science that said, in part, “Emotional attitudes toward various foreign countries are, as it were, built into small children before they have assimilated even the most elementary factual information about them. Generally the children said the people they liked belonged to their own nationality.”

This, of course, is not unnatural. One would expect to find this attitude among children of most, if not all, countries. But the report goes on to point out that this somewhat chauvinistic attitude is observed among English children particularly. “One could almost say,” the report concludes, “that in England the word ‘English’ is equivalent to ‘nice’ and “not English’ to ‘not nice.”’

England has already had as great an effect on civilization as China, Greece, or Rome. It has founded and run the greatest empire in history. It colonized a large part of the world, and for generations, for all practical purposes, ran it. These past accomplishments seem ever in the forefront of an Englishman’s mind. He longs for those great times to return, to see again the world’s map colored largely red. He resents the fact that others, less able and less admirable, with not so distinguished an accent, have taken his place, if not of power, certainly of influence.

But the impression is that the drive necessary to compete in an increasingly competitive industrial world is simply not there. The remarks about British golf made by Mark McCormack, the Ohio lawyer who manages Gary Player, Art Palmer, and Jack Nicklaus, might well apply to British business. “Being British,” he said, “is a definite drawback in golf. Stroke for stroke Peter Alliss and Christy O’Connor [top-ranking British professional golfers] are equal to Palmer and Player. But, because of the tempo of British golf, they just don’t have that competitive ‘edge.’ And if Palmer and Player played there they wouldn’t have it either.”

One would hope that the coming generation of English businessmen would see through the complacent self-delusions of their predecessors and seek to acquire the competitive “edge” without which Britain seems likely to remain hopelessly rooted in the outmoded methods of the past.