Businesses should learn from the Post Office scandal to put people first

Q The Post Office scandal has shocked Britain, with the revelations coming out of the public inquiry at times unbelievable. What lessons can businesses learn from the debacle?

A When it comes to big projects – not dissimilar to the Post Office’s compensation scheme for subpostmasters – company executives often promise to deliver new projects at “scale and pace”. It is a sound bite that seldom lives up to the rhetoric. The phrase is used by executives who live life in meeting rooms full of decks, dashboards, deep dives, surveys, governance, key performance indicators, policy and process.

The Post Office has failed to compensate victims of the Horizon scandal at an appropriate scale or a proper pace and, as evidence given to the recent inquiry shows, they still don’t realise the damage caused by a dictatorial central team that ran the organisation from head office.

The scandal should conveyed a strong message to every other big head office-based organisation.

Let’s start with the senior managers who, throughout the drama, failed to accept they were at fault and claimed they acted to protect the Post Office’s reputation. They got that wrong – the organisation’s reputation isn’t established by head office but by local service provided by sub-postmasters. The sub-postmasters needed support, trust and understanding that would have helped to make their jobs easier.

It seems that executives based in London hadn’t met many of the people who were running the post offices. Despite having a field structure responsible for supporting each shop, they failed to provide that support when it was most needed.

The Post Office was fortunate that the role of sub-postmaster attracted so many people who played a positive role in the community. If former chief executive Paula Vennells had met a few sub-postmasters every week she should have known that few were the type to take £40,000 from the till. The poisonous culture at the Post Office was the result of bad choices made many years ago. The wrong organisation, a controlling culture and the failure to recognise the importance of the people who served their customers. This case calls into question the reputation of large organisations run from corporate offices. Head office should never run the day-to-day business. The board sets strategy, approves capital investment and controls the cash, but it should not be devising policies and putting in processes that tell front-line colleagues what to do. The Horizon tragedy would never have happened if the Post Office had a field team that used trust and kindness to give sub-postmasters the support they needed. Sadly, too many of our big businesses are run by professional managers who never see the front-line people who create most of the success.

Big companies need inspirational leaders who bring out the best in their colleagues, but government regulation, company politics and professional managers all want a head office that is in control, tracking processes rather than trusting highly qualified colleagues. It could get worse with artificial intelligence. There will be mistakes when AI takes charge and executives reject concerns from colleagues – like the Post Office did in defence of Horizon.

As long as head offices take control and fail to leave their ivory towers, there will be another scandal. One area of concern is children’s social services – where the demands of safeguarding and record keeping mean that, on average, social workers spend less than 20pc of their time with children and families, creating an unhappy workplace and a recruitment crisis.

Sub-postmaster Alan Bates showed how big organisations should act like a small business and put their people first. Let’s hope other business leaders get the message.

‘Too many big businesses are run by professional managers who never see the front-line people’