It was impossible to watch the new British TV drama Mr Bates vs the Post Office without a tightening sense of rage.
In 1999, the UK Post Office installed a new IT system called “Horizon” to run its accounts. Shortfalls quickly started to appear in local branches as postmasters totted up their takings. UK Post Office managers concluded that the shortfalls could only have one explanation: a sudden outbreak of criminality among postmasters. The IT system was “robust” — who had ever heard of IT systems failing — it must be the frontline workers who were to blame.
The result was what the BBC has called “the UK’s most widespread miscarriage of justice.” More than 700 postmasters were falsely accused of theft, false accounting and fraud. Some were imprisoned; a few took their own lives. The UK Post Office compounded its original sin by repeatedly lying and stalling, crying crocodile tears and then playing hardball.
Illustration: Mountain People
The UK Post Office told postmasters who phoned up to complain about the IT system that they were the only ones who had experienced problems. It hired expensive lawyers to fight appeals brought by impoverished postal workers. The woman who ran the UK Post Office during this shameful period, Paula Vennells, was given a pat on the back and a CBE commendation when she retired in 2019.
Mr Bates vs the Post Office has finally provided the rotacket fuel the scandal deserves. Another 50 potential victims came forward after the program was broadcast. The Metropolitan Police announced a new investigation into the UK Post Office over potential fraud offenses. Vennells returned her CBE after 1 million people signed a petition calling for it to be removed.
Both Labour and Conservative party politicians are scrambling to speed up the lethargic workings of the justice system. The Liberal Democrats have been unusually quiet because their leader, Ed Davey, was post office minister in 2010, and refused to meet the lead campaigner, Alan Bates. Critics have also started asking questions about Fujitsu, the Japanese IT giant that ran the Horizon system and still has a multimillion-pound contract with the UK Post Office. Let us hope that they ask a lot more.
The scandal illuminates many of the things that are wrong with the UK’s political and legal systems: how ministers routinely side with the institutions they are supposed to monitor; how organizations with deep pockets — in this case provided by the taxpayer — could use the legal system to grind opponents into acquiescence; how quasi-privatized institutions could combine the worst of both the private and the public sectors.
However, it also tells us something more — that there is something wrong with our entire approach to management, which affects not just the UK, but the world. The UK Post Office scandal is at root a story of how people at the top would rather trust systems and numbers than regular people.
Bad managers have always treated their employees as shirkers needing to be bullied into shape. This attitude was transformed into a comprehensive theory in the early 20th century by the world’s first management guru, Frederick Winslow Taylor, author of one of the first business best-sellers, The Principles of Scientific Method (1911). Taylor argued that the only way to achieve efficiency is to put as little trust as possible in employees and as much trust in objective systems. Scrap “rule of thumb” methods that developed spontaneously. Study the workplace with slide-rules and measuring sticks. Divide jobs into discrete tasks, measure how well workers perform, and provide good performers with carrots and poor performers with sticks.
Scientific management took off across the world. Henry Ford made it the basis of “mass production.” Vladimir Lenin embraced it in the Soviet Union as a way of beating the capitalists at their own game. Charlie Chaplin satirized it in Modern Times. The manifold weaknesses of the system eventually emerged. Alienated workers were more likely to strike. Management gurus such as Mary Parker Follett and Elton Mayo argued that workers were more productive if you gave them more control over their work and relied on their innate desire to do a good job. Japanese car companies, which devolved power to self-governing teams, proved much more productive than US companies, which relied on Taylorism.
However, recent decades have seen a dramatic revival of do-not-trust-the-worker management thanks in part to two developments: the boom in the consulting industry and the rise of the MBA class. Companies have taken to outsourcing difficult problems to outsized consultants on a massive scale. This is particularly true in the public sector and in IT. A growing number of managers also learn their jobs in business schools rather than by doing a spell on the shop floor and working their way up.
Both developments have produced striking disasters. Consulting is so plagued with sandals that there is a mini-industry in writing books about it: See The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments and Warps Our Economies or When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm.
Yet none of this seems to have diminished the appetite for more of what they are selling. In 2021, estimates for the size of the global market for management consulting ranged between almost US$700 billion and more than US$900 billion. This included ￡2.5 billion (US$3.19 billion) from British public bodies. Many of the brightest people in the world also continue to mortgage their futures for an MBA degree.
Clever people remain bewitched by “scientific” theories that would provide them with the secret for how to run complicated organizations. What could provide a better justification of your power over other people than numbers and formulas? Given a little encouragement, clever people routinely treat others as objects of management rather than as partners in a collective enterprise. Business schools and consultancies are adept at appealing to these dark prejudices: Just listen to a consultant, dressed in a power suit, hinting at secret knowledge based on benchmarking “global champions” that could “transform” your company from basket case to world-beater.
It would be a relief to conclude that the UK Post Office scandal would lead to a change of attitude in the upper echelons of management — that The Post Office vs Mr Bates would become compulsory viewing in MBA courses and that consultants would take a vow of humility.
However, innumerable previous scandals have done little to reduce the demand for supposed management wisdom. Consultancies and business schools are masters of the art of forgetting.
More importantly, business is about to be transformed by a new force that is likely to reinforce the damn-the-workers attitude: artificial intelligence (AI).
AI brings even more glamor to management decisions than regular computers or management systems. Yet it is also prone to failure. Police officers habitually assume that facial recognition software is 100 percent correct. Yet one study by a sociologist who accompanied London’s Metropolitan Police as they went about their business found that the software turned out right only 19 percent of the time. Nearly all Fortune 500 companies use software to filter the flood of job applicants they receive every day. Yet the software routinely screens out some people for no good reason, leading CEOs to complain about mounting skills shortages even as they turn away qualified workers. Companies increasingly use algorithms to monitor our productivity or even our collegiality during meetings. Yet these algorithms do not have the ability to distinguish between busywork — repeatedly hitting the keys on the keyboard — and creative contributions.
Until managers change their fundamental way of thinking — their deference to numbers and algorithms and their suspicion of frontline workers as habitual shirkers — the UK Post Office scandal would merely be a prologue to many more scandals to come.
Adrian Wooldridge is the global business columnist for Bloomberg Opinion. A former writer at The Economist, he is author of The Aristocracy of Talent: How Meritocracy Made the Modern World. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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