Like many people, I have been watching the Post Office Horizon inquiry; but yesterday and todays performance by Paula Vennells was particularly striking for me personally, as I realised I had seen Paula before.
When I say I had seen her before I don’t actually mean her, but that over the last 45 years that I have seen (and worked in) organisations where the very top of the tree was occupied by someone who didn’t have operational experience of a similar organisation, lacked the curiosity to understand the business and had little or no interest in the day-to-day lives of the people they were charged to lead.
I worked with some great ones as well, but this post is not about them.
Based on the number of times that Paula answers an inquiry question with, “I didn’t know”, “nobody told me”, “I can’t remember”, “I don’t know” et all; It’s plain to see that understanding the issues people in the Post Office faced and exercising operational grip to solve them was/is not her forte.
The thing is that experience of operating in a similar role and having a track record of success, or any other tangible rational is not why people like Paula are placed in such exalted and well-paid roles, It’s all about their ability to manage up, not down. Moreover, if you’re looking for the classic embodiment of “it’s not what you know, it’s who you know”, then Paula and her ilk are constant living proof of it.
In my journey through corporate life (which ended 14 years ago), I've observed a concerning trend where senior executives are promoted based primarily on their ability to manage up, rather than on their operational acumen.
This ability to stakeholder manage interested parties, (institutional shareholders, investors, PR) not surprisingly coincided with the growth of executive bonuses tied to share prices and the perception (not the reality) of an organisation’s performance.
The approach often leads to significant organisational pitfalls, a classic example being the Horizon IT scandal at the Post Office under Paula’s leadership. Under her tenure, a focus on senior stakeholder management overshadowed the operational integrity of the organisation.
The Horizon system and the lack of honesty over its flaws led to over 900 sub postmasters and post mistresses of being accused of theft.
Instead of addressing these operational failures, the Paula and her leadership team, intent on preserving its image with stakeholders and the board, failed to heed warnings from those affected at the operational level. This not only led to financial ruin for many innocent victims but also tarnished the reputation of the Post Office and led to a loss of trust in its operations.
The allure of executives like Vennells, who are adept at navigating the upper echelons of corporate politics, is evident. They often project confidence and alignment with the strategic directions favoured by boards and C-suite executives. However, this can mask a lack of engagement with the day-to-day realities of the business; in the case of the Post Office, it meant ignoring the very real operational issues presented by the Horizon system until it spiralled into a full-blown scandal.
The consequences of such poor leadership as Paula’s are tragic at a human level and (probably) irreparable at trusted brand level. If the post office had a real like-for-like competitor it would have been out of business by the end of the year.
What, then, can be done to prevent such scenarios? In reality it's not difficult, organisations need to value operational excellence and hands-on management as much as they value strategic vision and stakeholder engagement.
Performance metrics for potential leaders should reflect their operational impact alongside their strategic influence. Additionally, leadership culture should be holistic, encompassing both strategic management and operational efficiency to foster well-rounded leaders who are in tune with every aspect of the business. In other words, it’s not all about the share price.
By creating leaders who are as committed to the nuts and bolts of business operations as they are to managing up, companies can avoid the pitfalls seen in the Horizon scandal. More importantly, they can build a more ethical, responsive, and sustainable business environment.
The Post Office Horizon scandal, with Paula Vennells at its helm, serves as a sobering reminder of the risks associated with developing a culture and promoting leaders who prioritise upward management over operational effectiveness.
By realigning leadership development priorities, organisations can ensure they are led by individuals capable of guiding them with both strategic foresight and operational integrity. This balance is not just desirable but essential for the long-term health and success of any organisation and the people who work in it.
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