A prisoner of the past

Breaking the constraints of corporate history in the UK

Britain continues to lag behind its peers in terms of industrial performance, partly as a result of the reluctance of the country’s industrial and educational sectors to recognise and learn from the lessons of the past. Arnold Kransdorff relates the enormous cost of this failure and outlines a plan to galvanise experiential learning for the 21st century.

When it comes to industrial performance, one of the most pertinent questions in the UK today is why this once all-powerful business machine languishes in the second division of OECD nations. The birth rate for medium-sized companies in the UK is less than a third of what it is in the US, a figure that also lags behind the equivalent rate in Canada, Israel and Italy. Britain is ranked 13^th out of 17 industrial nations in its ability to derive commercial benefit from science and technology. A global survey of respected companies puts the highest ranking UK business at 21st. Overall, just two per cent of British companies are judged to be world class, while government-acknowledged productivity is up to 40 per cent below that of the US, Germany, France, Holland, Canada, Ireland, Singapore, Hong Kong, Finland and Luxembourg. Ranked against 16 European countries, the UK comes 10^th in terms of per capita income, just ahead of Ireland and Italy. This is hardly a satisfactory position for the world’s oldest industrial economy, where logic would suggest that maturity should give rise to some experiential advantage over its competitors.

Among the many excuses given for Britain’s sub-standard performance are a lack of investment, systems failure, the value of sterling (whether the currency is low or high) and even the weather. But significantly, one explanation is routinely ignored – poorly schooled decision makers all the way up the line. When pressed, the most regularly used riposte is: “It’s easy to have 20:20 vision with hindsight.”

If hindsight is the elusive factor in the pursuit of decision-making excellence, then experiential learning – the erudition that comes from applying one’s own and others’ tried and tested experience – is the corporate imperative. But against mountains of contributory evidence of overrun budgets, late completions, painstakingly slow productivity improvements, corporate change that takes an interminably long time, endemic fire fighting and a conveyor belt of repeated mistake and re-invented wheels in both the private and public sector, the irrefutable fact is that not much learning from experience is taking place. Or, more accurately, others are relatively better at it than Britain.

The core problem in the UK is that British industry is widely disposed towards non-reflectiveness, while management and business educators are still wedded to methodologies dominated by macroeconomics and quantitative analysis. The application as a learning tool of actual experience or organisational memory (OM) – what is otherwise known as corporate and business history – is studiously avoided, leaving most experiential learning in Britain unstructured, informal and random. In the words of Martin Jacques, a co-founder of the apolitical think-tank Demos: “History has become disembodied from the present. Japan has a very powerful sense of its history, but this is the handmaiden of the present and is combined with an intense interest in the future. The culture is forward looking and strategic. The United States, though possessed of a short memory, is also driven by a sense of its own history, the frontier for example, but nobody could possible describe American culture as nostalgic or historically escapist.”

The rear-view mirror concept

Using a more graphic analogy, history’s role in experiential learning can be seen as being like looking in the rear-view mirror in a car. If one does not, one has to continually crane one’s head to make navigational decisions. At best, drivers get themselves a stiff neck. At worse, they can have a fatal accident, a precept characterised by Harvard scholar Alan Kantrow, who says: “Like it or not, the past infects the world we live in, the decisions we make, the very choices we see to lie before us. If we ignore its influence, we do not escape its power. All we do is remain to some extent its prisoners without ever really knowing that is what we are.” The consequential prospect is appositely conjured up by Prime Minister Tony Blair’s exasperated admission in 2000 that he had scars on his back from trying to persuade the public sector to change.

The absence of a business-type rear-view mirror in the UK is glaringly evident. In education, for example, subjects like political, military and social history are an integral part of many general curricula. Elsewhere, musicians study music history, artists art history, architects architectural history and soldiers military history, but for the people who have to go out and earn their livings in other ways – ie, almost everyone else – there is virtually no corporate history in the education system, even in business schools. When case studies are used (generally US or Japanese), they are usually no more than summarised snapshot examples to explain the workings of some functional management discipline, an approach that inescapably disaggregates their interrelationship with other management factors and influences. The wider contextual picture illustrating the more complex and intimate nature of running a real business is assiduously shunned. Alongside this, the use of wider-based business history is also virtually unknown. The only history that does feature, albeit in declining measure, is economic history, which deals with macro fiscal issues as they affect national and international constituencies, a discipline that is only remotely associated with the day-to-day running of a business.

Without these subjects in the curricula, students have only hearsay’s unreliable recall to learn from work’s tried and tested experiences. Alongside the deceptively simple reality that they have to start from scratch when they enter the workforce, there are few role models, no formal mechanisms to inherit the cultural qualities inherent in corporate enterprise, little received wisdom for the world of work and no efficient way to effectively improve on either past successes or failures. Business history is the story of change, and the absence of these factors undermines a potentially powerful way of teaching how to manage this most fundamental character of business that the UK finds so difficult to accommodate.

In industry, the relatively few corporate histories that are done are produced almost exclusively for public relations purposes. The other formal methodologies that use OM as the learning medium (for instance, action learning, an approach pioneered by Reg Revans in the early 1980s that generally uses a skilled facilitator to impose a discipline of self-reflection and analysis on team members of individual projects, and the oral debriefing techniques developed by London-based Pencorp for applications in project management, induction and management development) are equally rare.

Any learning deficit their scarcity imposes is compounded by the flexible labour market, which has introduced two hefty burdens on productivity and competitiveness: massively increased jobs disruption and the wholesale dispersal of institution-specific know-how that is otherwise necessary for organisational durability. Without good corporate history, which is the most portable repository of institutional-specific experience, there is no way of efficiently acquainting the rolling generations of new employees with the necessary corporate familiarity to reduce disruption or to effectively reduce repeated mistakes and re-invented wheels.

Alongside this, corporate and business historians, together with their subject matters, have largely failed to overcome the production and perception issues that routinely devalue the genre. When corporate histories – the rootstock of broader business history – are researched and written by university academics, the output is invariably exceptionally heavy-handed, often written in PhD-speak. Although more readable when researched and written by professional writers, such work is automatically considered not authoritative enough for serious application in industry or education, often with justification. In both cases, corporate histories are usually conceived without any meaningful application, mainly because companies and authors are unacquainted with their potential usage beyond public relations. Either way, and however accomplished the works produced are, the outcome is invariably dismissed as partisan because of the nature of the subject, in particular the company funding and commemorative purpose usually associated with their production.

As a result, whether written by academic or professional authors, few such histories are put on university reading lists and only a handful go on public sale, often with their cover price typically two or three times the cost of conventional business books. Hardly any are reviewed, even fewer authoritatively. Their exposure is also minimal; the average outside sale for all the company histories published by Cambridge University Press during the 1980s, for instance, was just 700 copies per title, a print run that included the books given to the captive audience of the subject companies.

In relation to wider-based business histories, similar characteristics are evident. Unlike analogous subjects (eg, politics, art, music, architecture and so on, which sustain a healthy research/publishing/teaching base), business history in Britain is virtually unknown as an established historical discipline. The professional reputations of the UK’s handful of academic business historians do not extend beyond their own community, while the first history of British business by an acknowledged academic business historian only saw the light of day in 1995. There is still no 20^th century history of British management on the shelves. The absence of a specific British methodology for researching business history, or even the adaptation of any of the US approaches (eg, the Chandler model) is also glaring.

History at work

But what proof is there that more history in the education and business sector would have a perceptible spin-off value? External evidence of business history’s value can be seen in the related science sector in the US, a highly successful segment of US industry and one of the more prolific industries at producing individual corporate histories. The broader-based history of science, which has been driven from these individual monographs, was – like business history – acknowledged as an independent discipline in the 1920s. Alongside the enormous number of US-produced books now available on the history of science, there are more than 60 American universities offering dedicated higher degrees in the history of science, technology and medicine. In addition, many colleges offer modules on the history of science at an undergraduate level. The subject’s importance was endorsed in the 1980s by Secretary of Education William Bennett, who declared that “all students should study the history of science and technology”.

Where history is not working

By way of contrast British industry, which has lagged in the science sector for decades, has been complaining for years that fewer students are considering science as their vocation or as a career. It is no coincidence, in my opinion at least, that the history of science, which might otherwise have provided motivational role models and an inheritance for successive generations of new entrants into the profession, is a curricula subject in fewer than a handful of British schools and universities.

A specific example of the effect of this oversight in the UK exists in the aluminium industry, where the sector’s own trade body complains that educational institutions and industry are woefully ignorant about the metal’s uses, despite it having been around since the early 1800s. Little suitable teaching material is available in the educational system. As a result, it was deemed necessary to embark on a £1m European-wide programme to rectify what Brian Turner, president of the Aluminium Federation, described in 1993 as “one of the most appalling educational failures of recent decades”. With the help of 25 universities, the industry’s objective is to provide 150 hours of teaching material covering technology-transfer aspects of the metal. As it happens, the use of history-related material is conspicuously absent from the package of planned teaching material.

A British example of how an awareness of business history has been used to beneficial effect (and then squandered) can be seen in how the modern Labour Party formulated its policy on the internet. The invitation to private companies to set up a ‘national grid for learning’, providing services on the superhighway for schools and universities, was modelled on the way radio manufacturers clubbed together 75 years ago to create the organisation that eventually became the BBC. This resourcefulness in one branch of internet activity is being offset by the broadband conversion delays that are not as evident in other European countries or in the US and Canada, and the less than proactive resolution of issues such as unmetered internet access and the price of leased lines.

A plan of action

So if corporate and business history has a role to play in experiential learning, how could the UK’s corporate and business history community respond?

· British corporate historians must establish a formalised approach that also suits the education sector. This might include, for example, providing historical insights into decision-making processes and a concentration on the use of tacit knowledge to compensate for the educational system’s attachment to theory;

· Like their US counterparts, who have taken the genre through at least two evolutionary phases since Alfred Chandler’s pioneering contributions after World War Two, British business historians have to devise their own clear methodology for conducting wider-based business histories that suit both British industry and management education;

To overcome the perception that subject-company funding and co-operation automatically produces partisan history, a code of conduct for authors, publishers and subject companies needs to be formulated;
Academic historians need to be encouraged to write primarily for industry and the public rather than just academia;
To facilitate the maximum business inheritance, universities should be able to provide students with a selection of biographies of companies in whose industries they intend to work;
Publishers of corporate histories, which traditionally receive healthy stipends from subject companies, set cover prices substantially higher than non-sponsored commercial business books, do minimal editing and marketing, and achieve low sales, which are then used to justify their high cover prices in the first place. They should have to rigorously defend their editing, pricing and marketing strategies;
To enable wider currency of the genre, a centralised lending repository for both published and unpublished manuscripts needs to build up a comprehensive collection of corporate histories. Where copies are in short supply, e-book technology should be employed to make them available over the internet;
The subject of business history should be transferred from universities’ economics departments and to business departments proper, where its application would arguably be more relevant;
The internet should be used as a medium to offer courses on corporate and business history;
Deep-set animosity between business historians and management educators has to be overcome, as does that between academic and non-academic corporate and business historians. Given that writers not in full-time academia dominate the genre’s output, the Association of Business Historians, which is the only representative body of corporate and business historians in the UK, should go out of its way to recruit non-academic authors with a view to influencing wider standards in a positive way;
Given the limited success of the genre to date and the need to ally both academic and non-academic authors, serious consideration should be given to a more unified Business History Institute along the lines of the Institute of Contemporary British History;
With archive preservation critical to good corporate and business history, a much closer organisational relationship with the Business Archives Council should be considered,
Corporate and business history has wider legitimacy in the US and Japan, mainly because the genre has an educational application largely unrecognised in the UK. Business historians should solicit the advice of key business history campaigners and operatives in these countries to learn how they have been more successful at promoting the genre, and implement relevant strategies. Specifically, the widespread attitude that corporate and business history’s application is either for PR purposes or a narrow-interest activity for a few postgraduates needs to be changed to at least correspond with the significantly higher levels of corporate and business history activity in the US and Japan;
Management is a functional task. Efforts need to be made to shift management education away from its resolute concentration on theory towards teaching based on real experience;
So as not to lose their experience, the knowledge of Britain’s army of retired managers needs to be recorded without delay;
The genre shares its educational obscurity in the UK with science history. Both disciplines need to collaborate to advance their branches of learning;
A network of champions in industry, management education/business schools, government and the media needs to be identified, nurtured and utilised to raise the profile of the subject.

In a climate of such rapid change, the tried and tested past is an extremely valuable corporate asset. In the information age, the genre of business history represents knowledge as valuable as anything else and, as such, should not be treated as a narrow-interest scholarly pursuit. Applied well, accurate, authoritative and readable corporate histories, individual biographies/autobiographies and broader-based business histories are highly effective knowledge management tools that are being neglected by both the corporate and educational sectors. Until they are recognised as such, Great Britain plc will have to carry on depending on informal and indiscriminate means to learn from its own experience.

This subject is explored in more depth in the author’s book, Corporate Amnesia, published by Butterworth-Heinemann.

Arnold Kransdorff runs Pencorp, a business history publisher and KM consultancy. He can be contacted at: ak@corporate-amnesia.com