7

The Enforced Strategy for Creating Change: Petrochemicals Division

Early in 1971 ICI announced one of their periodic reorganisations involving a reshuffling of business areas and redrawing and relabelling of divisional boundaries. Nobel's Explosives Company Ltd was formed to take over and operate the explose assets of Nobel Division. ICI Fibres Ltd was reconstituted as a division. Dyestuffs Division combined with parts of Nobel Division to become Organics Division, and Heavy Organic Chemicals Division acquired parts of the old fibres and dyestuffs operations and was renamed Petrochemicals Division. To many of the managers who had left the old Billingham Division in 1958 to form Heavy Organic Chemicals Division (HOC), who were part of the tremendous technological and market growth of ICI's chemicals from petroleum interests in the 1950s and 1960s, the naming of Petrochemicals Division (PCD) symbolised that period of individual and business sector success.

Almost exactly ten years later, in March 1981, PCD no longer existed as a separate division of ICI. As a senior manager of ICI put it, in April 1980, PCD “fell off a cliff”. On the way down they met Plastics Division and in April 1981 those two divisions were merged to form Petrochemicals and Plastics Division. In 1979 the ICI worldwide petrochemicals business had made a profit of £98m. The extent of the fall off the cliff can be gauged by looking at the corresponding figures for the year ending December 1980. By then ICI's petrochemicals business was making a loss of £44m on sales of £976m and the plastics business a loss of £35m on sales of £738m. Because of these losses, and similar difficulties in their Fibres and Organics Divisions, ICI as a group made losses of £10m and £6m in the third and fourth quarters of 1980. These were the first losses in the group's history and were widely used as a barometer of the extent of difficulties in the UK economy in late 1980 and early 1981. How ICI, as a group, changed during and as a consequence of the business traumas of 1980 and 1981 will form an important part of the concluding section of this book. The objective of this chapter is to return to an earlier period in the business and organisational history of ICI's petroleum chemical interests in order to explore first the context in which organisation development activities emerged in Petrochemicals Division, and then to chronicle and broadly analyse the birth, functioning, and demise of the OD unit in Petrochemicals Division. The above analysis will reveal a quite different pattern of birth, evolution, and development of OD activities, and a different kind of impact for OD resources in PCD than that which occured in Agricultural Division, even though by the early 1970s we will be discussing divisions of the same company, of comparable size, both based on large multidivision manufacturing sites, and with their headquarters initially only a quarter of a mile from one another.

HEAVY ORGANIC CHEMICALS/PETROCHEMICALS DIVISION: BUSINESS HISTORY, ORGANISATION, AND CULTURE: 1958–81

In order to adequately explain the creation of HOC Division in 1958, its growth and development into PCD in 1971, and to understand some of the antecedents and evolution of OD in PCD, it is important to know something of the origins of the large chemical manufacturing site south of the River Tees at Wilton. Even though from 1958 until 1974 the headquarters of HOC/PCD was north of the Tees at Billingham, and indeed some of PCD manufacturing capacity is on the Agricultural Division-managed Billingham site, the rise of the HOC/PCD businesses and their associated manpower and managerial cultures is very much also the story of the Wilton site.

The idea of basing a good deal of ICI's post-war expansion plans on a large, integrated manufacturing site dates from deliberations of the ICI Development Executive Committee of 1943 (Reader, 1975:392). By the end of 1945 the 3,500 acre Wilton Estate, complete with nineteenth-century mansion, Wilton Castle, had been purchased for a sum of £190,000. In 1947 the main board of ICI sanctioned £25m of investment for various divisions at Wilton. By 1957 £114m had been sanctioned for Wilton, by 1965 £330m had been invested there (in 1972 pounds) and by 1972 the figure was £560m, representing a quarter of the company's assets (Roeber, 1975:120). In 1981 the investment on Wilton in 1981 prices was around £2,000m. Driving past the Wilton complex in the evening, the site appears the apotheosis of technological glamour and industrial power.

There are various reasons why the Wilton Estate was chosen as the focal point for ICI's postwar development. The Tees offered access to the sea for the import of materials and the shipping of chemicals and finished goods. The Tees also provided water for cooling and the tidal river or sea an outlet for effluent. Coal and salt were close at hand in Durham, and as a “development area” there would be financial and other encouragement from the Government and local authorities. Wilton also had one other big advantage – proximity to ICPs existing large chemical works at Billingham on the opposite bank of the Tees. This made possible the interconnection of Billingham and Wilton by means of a 10-mile-long pipelink soon to be built by ICI for this purpose. Eventually the advantages of scale and integration were to be reinforced by the construction of a further tunnel under the Tees through which raw materials, products and services could flow in both directions. The Teesside ICI complex is also linked by pipelines to other related chemical plants and processes in the north-west of England, and central Scotland.

ICI had been researching in petroleum chemical processes since 1929. At Billingham knowledge had been built up by operating the high-pressure hydrogenation process to produce petrol from coal or coal tar middle oil. The experience gained in operating this hydrogenation process, the techniques developed in working up its by-products, and the vast amount of research work carried out, provided the basis on which to develop petroleum chemical activities. In 1933 ICI scientists at Billingham discovered polythene. By the late 1960s this was the world's largest tonnage plastic. Yet for 12 years after 1939, when the first commercial polythene plant began operating, all of ICI's requirements of ethylene for polythene were derived from ethyl alcohol obtained from the fermentation of molasses. When, therefore, in 1951 ICI started up its first naphtha crackers at Wilton with a capacity of 30,000 tons a year, it did so essentially in support of polythene and other near consumer products such as “Perspex”, in order to achieve an economic raw material base. What these “crackers” do is to break down their raw materials – naphtha or natural gas liquids – and produce chemicals called olefines. These olefines in turn become the raw materials required for the plastics industry.

In the course of the next 15 years, three large olefine plants were built upon the Wilton site with a combined cracking capacity of 600,000 tons of naphtha per annum. By the late 1960s, Olefines 4 and 5 had a combined capacity of 650,000 tons of ethylene per annum. Around these olefine plants grew up fifteen other plants producing intermediate and finished petroleum chemical products for the plastics industry and an aromatics complex which provided raw materials for “Terylene” and nylon manufacture.

This picture of expansion of petroleum-based chemicals to be sent down-stream to ICI's own plastics or artificial fibres businesses, or to be exported to facilitate the growth of those industries in Western Europe, was influenced by worldwide economic recessions, and the cycles of boom and slump within the chemical industry. In the period 1951 to 1957 ICI poured capital into Wilton. All the other large chemical companies and some of the cash-rich oil companies did the same thing at the same time in order to keep up with the competition and growing world demand. As Roeber (1975) has argued, the economies of such heavy investment were compelling. “The more completely ICI could make use of its proliferating streams of products and by-products, the more efficient and profitable would the operation become. Allied to it is the logic of scale: in continuous process industries there are almost unlimited benefits to be gained from building bigger plants” Roeber (1975:120). As we shall see, however, the singular pursuit of these economic and technological logics eventually produced severe strains in the emerging workforce and managerial cultures which developed on the Wilton site.

The 1950s expansion of the world petrochemicals industry eventually produced its harvest of worldwide over-capacity and, with the 1958 US recession, dumping of chemicals in Europe followed by the price wars of the 1958-62 period. Faced with these developing business pressures in the late 1950s, ICI made one of its periodic reorganisations. On 1 January, 1958, ICI (Heavy Organic Chemicals) Ltd was formed and this new division took over the organic chemicals side of the business from Billingham Division. This involved the transfer of roughly one-third of the staff strength from the old division and the total production of two works. The new division, which employed 2,300 staff and payroll workers, was made entirely responsible for its own research and technical work and had an extensive engineering organisation. In the period 1958–63 this engineering organisation had a relatively quiet time. ICI's investment in Wilton virtually stopped in those years. In the period 1951–56 new expenditure on the site as a percentage of last year's total had been running between 33% and 21%. In the period 1959–63 expenditure on the site as a percentage of the previous year's total had declined to between 9% and 5%. But the chemical cycle picked up again and 1965 and 1966 were years of large capital expenditure on the Wilton site only to fall back once more in the period 1968–72, and pick up with massive new investments in the years 1974–79 when ICI was cash-rich.

The boom investment years of 1965 and 1966 were associated with unheralded expansion in the downstream plastics and fibres businesses. In 1964, for example, demand for plastics in the UK was expanding at 15% per annum. 1964 also saw the creation of ICI Fibres Ltd out of British Nylon Spinners and the “Terylene” and “Ulstron” interests of the old Fibres Division. ICI also in 1964 bought into English Sewing Cotton Ltd, Viyella International Ltd, and three other smaller textile companies. But these were volatile years for the textile industry, 1965–67 saw nylon sales and prices down, and after a brief upsurge in 1968 the textile interests of ICI had bad years from 1969 to 1971. This led to the reorganisations of the fibres, explosives and dyestuffs business areas which produced in 1971 an expanded Heavy Organic Chemicals Division which was renamed Petrochemicals Division.

The ICI Annual Reports have shown the performance of its business classes (worldwide) only since 1973. This makes it relatively easy to follow the worldwide profits and sales of Petrochemicals Division from 1973 until 1980 but virtually impossible to analyse the profitability of HOC Division from public sources through the period of its creation in 1958 until its reconstitution as PCD in 1971. Judging from evidence of the world economic and chemical recession of 1958–61, ICI cost-cutting and reorganising around that period, and the big drop in capital sanctioned and spent at Wilton then, one can reliably assume both that those were bad financial years for HOC, and that HOC benefited from the upturn in 1964–67. By 1969, however, interviews from authoritative sources in HOC at that time indicate “the most appalling financial results . . . with something like £200m invested . . . we didn't turn a bloody cent”. Internal sources indicate PCD made a profit of around £lm in 1971 and perhaps £5m in 1972. By 1973, PCD worldwide was turning a trading profit of £22m on sales of £272m. These fairly unspectacular financial results of HOC in the 1960s, and PCD in its first two years, do not justify the confident managerial culture that built up in HOC/PCD in the 1960s and early 1970s. But if the profits were not growing in the 1960s, the capital invested at Wilton continued to grow and that was the more likely spring from which the confidence of the division's managers developed.

PCD’s 1973 profits increased on the back of a demand boom. Table 20 shows that PCD prospered in the wake of the oil crisis of 1973–74. With shortages of petroleum-based raw materials customers were willing to pay high prices to maintain and even build their stock levels. Profits dropped again in the economic recession of 1975 but discipline among producers not to chase market share at the expense of prices, even in the overcapacity situation in plastics and fibres, meant that profits were healthy though volatile right up until the end of the 1970s.

TABLE 20  Petrochemicals Group worldwide: sales, trading profit and trading margins in £m

Year

Sales

Trading profit

Trading margin

1973

  272

  22

  8.1

1974

  503

  73

14.5

1975

  493

  49

  9.9

1976

  669

  82

12.3

1977

  699

  61

  8.7

1978

  673

  54

  8.0

1979

1076

  98

  9.1

1980

  976

(44)

(4.5)

Back in the mid-1960s two events had strengthened long-term petroleum chemical activities on Teesside. One was the decision made in 1964 to complete the vertical integration of ICI's petroleum activities at Wilton by taking a 50% stake in a new oil refinery to be built and operated jointly with Phillips Petroleum Company. This refinery was placed alongside North Tees Works and began to supply part of the naphtha requirements of ICI's plants at Billingham and Wilton. Crucially, however, 1964 also saw the setting up by ICI and Burmah Oil of an oil consortium to begin oil exploration in the North Sea. By the time Olefines 6 was commissioned in 1979 – a joint venture between ICI and British Petroleum – ICI had created ICI Petroleum Ltd and made them responsible for ICI's interests in exploration and development of oil and gas in the North Sea and refining of crude oil. ICI now had its own supply of an increasingly expensive raw material from the Ninian Field of the North Sea. By 1980 ICI was a partner in oil and gas interests in the North Sea, the Gulf of Mexico, offshore California, and in Alberta, Canada. After provision for petroleum revenue tax, the worldwide oil interests of ICI made a trading profit in 1980 of £97m on sales of £770m. But although Petrochemicals Division was benefiting directly in 1980 from ICI's oil and gas interests in the North Sea, those £97m trading profits were firmly under the oil, and not petrochemicals, business area.

1980 witnessed disastrous trading conditions for Petrochemicals Division. There was a worldwide recession and after record petrochemical sales in the first quarter of 1980 weakening demand for many products was exacerbated by heavy destocking by customers. For the year as a whole, crude oil prices were more than 50% higher than in 1979. The gap between United States and West European crude oil and petrochemical feedstock prices widened and this, coupled with the recession in the US demand, meant increased supplies of low-priced petrochemicals products from the USA. The ICI fibres business, a largish customer for PCD intermediate chemicals, was still further depressed by the dumping of US synthetic fibre in Europe. The resulting overcapacity in the European petrochemical, plastics, and fibres businesses provoked intense price competition and a severe squeeze on margins. In addition, realisations from all markets were reduced by the strength of sterling against the dollar and the Deutschemark, and were insufficiently compensated by exchange rate benefits on oil and gas feedstock costs. With costs on the feedstock (input) side escalating, a dramatic falling away of demand in a situation of worldwide overcapacity, prices collapsed, and PCD fell off a cliff. This was much worse than the 1958 collapse and one of its many implications within ICI was the merging of PCD and Plastics Divisions. If costs on the input side couldn't be controlled, and neither could prices on the output side, one thing that was still actionable upon was the middle-fixed costs. Reorganisation was the result.

image

FIGURE 7  Simplified flow chart for Petrochemicals in ICI

Nevertheless, by the end of the 1970s the large, composite, integrated chemical site ICI conceived of at the end of the Second World War was in place at Wilton, along with the new headquarters of the landlord of the site, Petrochemicals Division. Figure 7, in a highly abbreviated form, presents a flow chart for petrochemicals operations on the site and lists which division of ICI used PCD chemicals and chemical derivatives to make products. By the end of the 1970s, in the UK, Petrochemicals Division still was selling around nearly 50% of its output to other ICI units. As one PCD senior manager put it, “The big pool is still ICI demand, we are in fact a power station for ICI, producing all her feedstocks.”

The Wilton site organisation and culture

The context in which OD activities in Agricultural Division developed had a crucial role in shaping the evolution and impact of OD in that part of ICI. The relatively short life, task, and impact of the OD unit in Petrochemicals Division was also moulded by the manner in which it was born and the history and setting in which it emerged. Although the history of the Billingham site and the Billingham/Agricultural Division is, from an operating production point of view, 25 years or so longer than Wilton and HOC/PCD – and this exerted an important effect on creating some of the cultural differences between the two sites and divisions – the shorter Wilton/PCD story is a more complicated story to tell. One reason why the Billingham story is a simpler one is that the history of Billingham is so much more singularly the history of Billingham/Agricultural Division than was the case south of the River Tees at Wilton. Indeed, as the opening section of this chapter has indicated, the whole point of the Wilton site was that it should develop into a composite manufacturing setting where many of the ICI divisions would be represented.

Compared with the centrifugal role that Billingham/Agricultural Division played at Billingham, it was not until 1968, ten years after its creation, and four years after it was formally required to, that HOC actively began to take a managerial and political role in trying to pull together and co-ordinate what at that time was beginning to appear as an uncontrolled Wilton site. As we shall shortly see in more detail, the control problems on the site were not only in the management–trade union arena, but also in the conduct of relationships between manager and manager. In fact, the control problems in both those areas nourished one another. But in considering the developing organisation and culture of the Wilton site as part of the backcloth of OD in the HOC/PCD Division, it is important to remember the degree to which it is, in fact, separated out from the work of the OD unit. There is a separation of time in that the development work initiated to try and deal with some of the Wilton site's control problems began in 1968, some two years before the OD unit was created. There is a separation of focus in that the Wilton development work centred on the management of production, management–management relationships across the site, and the management of weekly staff, while the OD unit's work focussed entirely on the management of HOC/PCD divisional structure and monthly staff. There is a separation of personnel in that few of the members of the OD unit or their associates were much involved with the Wilton work. Finally there was also a geographical separation in that the OD unit and most of its clients were located in the HOC/PCD divisional headquarters building on the Billingham site. Nonetheless, the Wilton work did introduce organisation development activities on a wide scale for the first time, and the chief sponsor of these activities at Wilton, John Harvey-Jones, subsequently became chairman of the HOC/PCD Division and a major sponsor and user of the OD unit.

The differences in culture which emerged on the Billingham and Wilton sites are widely recognised and freely talked about by managers and trade unionists on both sites. But the differences acquire part of their fascination because we are talking about industrial sites with some crucial things in common. Crucially, one would think, we are talking of chemical sites employing people from the same company, located only 13 miles apart in the same industrial community, of broadly similar size, and part of the same broad industrial grouping. Billingham, of course, was built up around fertiliser products and Wilton around petrochemicals – but they are members of the same technological family in design principle terms and offer similar working conditions and rewards for the people who work on the sites. In the mid-1960s both sites comprised several works, each a self-contained factory, employing from 1,000 to 4,000 people. Also in the mid-1960s each site employed some 10,000 payroll and 4,000 monthly staff. By 1973, although both sites still had plants from five ICI divisions on them, and the type of labour on each site was still comparable, the plant closures on Billingham in the late 1960s and early 1970s had reduced their labour force to around 6,400. Table 21 provides a detailed picture of the ICI direct labour employed by both sites, by type of labour in 1973.

As Roeber (1975:87) has argued, probably the most crucial similarity between the two sites lay in employing people from the same part of the country. Teesside is one of Britain's oldest industrial communities. Coal mining, iron-ore mining, iron and steel manufacture, shipbuilding, heavy engineering, and railway engineering had been dominant employers in the area for a century or more. But with the decline in those industries, employment prospects in the area were deteriorating and there had been the manifest suffering amongst working people in the area during the 1920s and 1930s.

TABLE 21  ICI direct labour on Billingham and Wilton sites, 1973

Type of labour

Wilton site

Billingham site

ICI numbers on Teesside

Fitters

1081

  791

 1872

Electricians

  313

  278

   591

Instrument artificers

  380

  248

   628

Plumbers

  200

  164

   364

Platers

  116

  100

   216

Welders

    86

    59

   145

Riggers

  142

  256

   398

General workers

5735

4133

 9868

Miscellaneous

  288

  372

   660

 

8341

6401

14742

But in spite of these important similarities, the differences in the histories of the two sites, the places they occupied in the local communities, and what seemed for a time differences in the commercial future of the two sites all contributed to the emergence of contrasting cultures on the sites. These contrasting cultures were to manifest themselves most obviously in the different reactions coming from the sites in response to the variety of social innovations coming out of Millbank in the period 1965–72.

Billingham was a much older site – its history went back to the 1920s. In the context of the decline in the older industries on Teesside, and the high unemployment of the 1920s and 1930s, the arrival at that time of the newer chemical industry offering better working conditions, fringe benefits, and prospects than local competitive employers was one of the few optimistic events in a very bleak Teesside. First fathers and then sons went to work at “the ICI”. Under “hard but fair” management, amongst a management group which was itself relatively stable and secure, an aura of paternalistic working relationships developed on Billingham where in spite of the normal frictions there were deep-rooted relationships where “dad knew best and handled change in a fair, sensible fashion”. Billingham was also very much a factory town, the Teesside at Mid-Century report by House and Fullerton (1960) showed that by 1955, 30% of the factory payroll lived in Billingham itself in houses built by ICI before the Second World War.

In contrast to this Wilton had grown rapidly in the conditions of full employment of the 1950s when the trade unions were growing in size and confidence, and in social conditions where managerial prerogatives and practices were increasingly under question. Because there was little housing within a five-mile radius of the Wilton site, and by the 1950s, ICI had discontinued the practice of house-builder and landlord for its employees, Wilton employees had to come further afield to get to Wilton, and the communities they returned to after work were not so exclusively ICI as Billingham was. By the 1950s other chemical firms were investing in plants south of the Tees, and the steel industry was going through a period of local expansion. Wilton never became a company town in the way Billingham had been. A Wilton senior shop steward of many years standing had this to say about the emergence of the Wilton site:

When I first came here in 1952 this site had a nucleus of Billingham people here, but ICI was recruiting from shipbuilding and other industries as far away as Newcastle. People who came here had no paternalistic feeling about the situation. They were coming to do a job. There were a hell of a lot of Geordies, hell of a lot of Scotsmen. Knowing the background where they lived and the type of industrial relations they were used to – they were fairly militant. With regard to how they saw their jobs, the demarcations were fairly finely drawn, and everyone stood up for what he believed was his right. . . Billingham was a mature site even during the War. Although they recruited a lot of ex-coal mining people from the prewar era – they were quite happy, their allegiance to the company became paternalistic. The company looked after them. But on this site they came from all over, and they all had their own idiosyncracies in protecting their own spheres of influence.

Several Wilton shop stewards, some of whom had been floating “pool men” for a time and had thus worked at both Billingham and Wilton, described the lower management at Billingham in the early 1960s as being “much more friendly and helpful”. There was clearly a difference in the concern for people on the two sites. Here a Wilton manager captures some of the social system differences between the sites north and south of the Tees:

A friend of mine from Dyestuffs Division in Manchester had regular contact with both Nylon Works Billingham and Nylon Works Wilton. He said they were quite different. When you came into Billingham you came into something approaching a family concern, a human organisation with a social organisation attached to it. Going to Wilton – it's clinically clean. But it's just like going into a hospital. There's nothing wrong. Everything is right, but it certainly ain't a social organisation. That was probably 1960s, but I suspect that's still true today [in 1976].

An experienced industrial relations manager at Wilton had this to say of the origins and implications of the differences between Billingham and Wilton:

Billingham is ICI, the place is ICI. Wilton isn't ICI. Wilton is a farming village, and we draw our labour from the centre of Middlesbrough and East Cleveland, and there is nothing like an ICI identity at Wilton in the way there is at Billingham. Wilton is ICI, but not with the same local, family associations as at Billingham. At Wilton we have a more business-oriented relationship. Like we come to work and we go home, and it's not the same at Billingham. That shows in a number of ways. Relationships between site managers and shop stewards here are very different from Billingham. They are much closer, they have more docile shop stewards who are not as politically motivated (with a small “p”) as our shop stewards. Our shop stewards have a history of political aspirations within their union and within the district trade union organisations. Consequently, they have a very privileged position in terms of knowledge. Our shop stewards see themselves in an advantageous position because they sit on district committees, and in some cases national trade union and governmental bodies. They present themselves in a different way and this alters their relations with management. Managers feel vulnerable in that situation and that builds up resentment from managers . . . The shop stewards here at Wilton haven't the time and don't like to be huddled together in a hotel boozing with management. I've not perceived a management desire to do this here either. The stewards want to be negotiating all the time. They like to be sat at the other side of a table negotiating, tackling management, and management has done exactly the same now . . . unconsciously we must have colluded together to create this culture.

Wilton had grown very rapidly in the 1950s, there was also the constant change as plant after plant was built and commissioned, and the composition of the labour force on the site was in continual flux as waves of ICI and non-ICI construction workers swept in and off the site. Table 22 shows the rapid increase of ICI payroll and monthly staff employed on the site between 1946 and 1957. Table 22 also indicates both the large number of non-ICI contractors’ men on the site and the fluctuations in their numbers associated with ICI's capital expenditure activities. These contractors brought onto the site a different tradition of industrial relations from that developing in the chemical industry and in ICI, and added their contribution to the rather unstable, brittle, and self-interested culture at Wilton. As a shop steward with trade union experience on both sides of the Tees put it, the attitude which prevailed at Wilton was “every man for himself”. Shortly we shall see there were elements of that kind of attitudes and behaviour amongst the managers in HOC division who grew up at Wilton.

TABLE 22  Employment growth on the Wilton site, 1946–1957*

Year

ICI payroll: production and construction workers

Non-ICI contractors

Total labour strength

Monthly staff

1946

    86

  745

  831

  250

1947

  149

  847

  996

  354

1948

  474

  914

1388

  378

1949

  959

1466

2425

  411

1950

1861

1913

3774

  436

1951

2358

1321

3679

  727

1952

2672

1169

3841

  837

1853

3390

1798

5188

  985

1954

4404

1268

5672

1270

1955

5654

2065

7719

1554

1956

6086

3747

9833

1849

1957

7015

1887

8902

2284

* Abstracted from House and Fullerton (1960).

Managerial organisation and culture: the Wilton site and Heavy Organic Chemicals Division

From a management point of view the problems of lack of control and integration on the Wilton site got so bad in 1968 that Wilton attracted the interest and scrutiny of a main board committee headed by a future chairman of the company, Sir Jack Callard (Roeber, 1975:169). The trigger for the setting up of the Callard Committee had been companywide trade union resistance to MUPS, ICI's productivity bargaining exercise. Nowhere was the resistance to MUPS better organised or more vociferous than on Wilton. Before long, changes in structure and top management behaviour became evident on the Wilton site and in HOC Division. The reasons for these changes have important historical roots, not only in the developing workplace culture on the Wilton site, but also the pattern of managerial organisation and culture that existed at Wilton generally and also in HOC Division.

Crucial to the development of both the workplace and management culture on the Wilton site was the decision made at Wilton's birth to allow each of the divisions who came on the site to be responsible for its own works. Each division retained complete technical and commercial control of its plants. The Wilton Council was set up to direct the site. This council was accorded the same status as a division board and was composed of the chairman of the boards of the divisions establishing plants there and senior officials of the council's central organisation at Wilton, i.e., the chairman, the managing director, engineering director, technical director, works and personnel director, and the chief accountant. The main functions of the central organisation under the Wilton Council were to plan the layout and development of the site, to provide all common power, maintenance, and transport services, with the co-operation of the divisions to help all employees and provide eating and other facilities, and to co-ordinate the company's labour policy throughout the site.

The Wilton Council functioned as the integrative device until 1962, and apart from its overriding service-providing and technology-building role, managed to generate “a strong sense of belonging”. But the business difficulties of 1961 meant that “the company was hunting overhead, as it does periodically, and gave to a reluctant HOC division board the responsibility for running the Wilton site instead of the Wilton Council”. This takeover is important to the rest of the story; first, because it throws some light on the culture and style of the new HOC division; and second, because the site later became a major source of industrial relations problems, and dealing with these problems helped to develop some aspects of OD in the division. One manager who was part of the Wilton Council's central organisation described the takeover in this way:

Really it was a model of how not to do it. . . It was done in a brutal and insensitive way. The whole of the Wilton Council board disappeared. The most notable of them was retired prematurely when that was tantamount to being caught raping your secretary or with your finger in the till . . . The HOC people moved in instantly and the head of almost every Wilton department was demoted or generally removed.

The same manager continued by contrasting the style and orientations of the old and new managements:

The Wilton organisation, as it was, had been very highly people oriented. We didn't have any operating responsibility so we knew our board. HOC was apparently highly achievement oriented but in the most ludicrously bullshit way. You got marks if you rushed in, rolled around, bit the carpet, tore your hair, and cried generally about the terribleness of the problems you were facing, and then rolled back minutes later and said: “Oh! by the way, I managed to sort those out.” Enthusiasm and efficiency were equated with long hours and apparent dedication to the cause.

This description is more colourful than most, but it complements the descriptions given by other managers of a young, aggressive, highly technical, managerial culture. Asked in broad terms what adjectives he would use to describe the HOC/PCD managerial culture, one manager said:

I joined HOC in 1960 – it has consistently through all the 1960s and for much of the 1970s seen itself and been seen by others as young, aggressive, Americanised in many ways. There has been an American approach to a lot of things, technology, marketing, aggressive, rash, go go – all these types of adjectives and I think that lasted right through until the mid-1970s.

The managers and consultants asked to describe what the concept of a good manager was in HOC were highly consistent in mentioning, “technical competence and applied intelligence”; “highly task oriented and hierarchically conscious with a strong loading of a tough use of authority”; “very sharp, aggressive, fairly authoritarian, the ability to answer every question”. One manager rounded these kinds of statements out a bit by describing the kinds of criteria which made you promotable in HOC:

I think the general feeling would be that people are promoted on a fairly short-term basis. If they are successful in completing a job, like starting up a new plant, then that counts for more than the longer-term thinking . . . So probably the image is that professional success in your job, ability to keep your people under control, and to have the answers when required, goes a long way.

This picture of hierarchically conscious, rather cocky, growing, optimistic, and technologically aware division, is highly congruent with the evolution of the division's business throughout the 1960s which involved continuous expansion and building of highly capital-intensive plant. In this period Wilton became the largest concentration of investment in ICI, the glamorous power station for the downstream fibres and plastics businesses. Psychologically, as Roeber (1975:119) has argued, Wilton and HOC division represented a large part of ICI's claim to a place in the modern chemical world and for much of the 1960s it was all go go, and quick promotion for the high flyers in HOC.

All this must have appeared in stark contrast to the managers of Billingham Division who were just about to go through first a technological, and then a period of social, innovation on the Billingham site. Perhaps because some of the managers of the new HOC Division had come from Billingham Division, perhaps also because of the differences in the two divisions’ business fortunes at that time, and maybe also because throughout the 1960s and up until 1974 the headquarters of HOC/PCD Division was at Billingham, only a quarter of a mile from the Billingham Division headquarters, there was an active, almost conscious attempt by the HOC managers to be different from “the hidebound, gentlemanly, paternalistic” Billingham management scene. Two HOC managers had this to say about the differences between HOC and Billingham:

Certainly in the late 1960s there were many senior people in the division who were the young guys when the division was born. Then it was small and they knew each other. They were the pioneers and they were going to show that they were different from bloody Billingham. That's part of the reason for this technological efficiency culture.

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HOC, when set up, drew on the younger, more intolerant members of the old Billingham Division. We were much more intolerant of red tape. We were prepared to change things and discuss things . . . Since those days, HOC has gone through more organisational [structure] change than Agriculture . . . in this division we are operating in much more rapidly moving business environment. It's used to change. I see Agricultural Division as being more rigid in its attitude to structural change, less willing to undertake it.

The above characterisation is in part correct. Certainly the organisation structure at Billingham did not change radically throughout the 1960s and 1970s, but maybe they had enough to cope with in the way of technical and social change. In HOC it became one of the core beliefs and practices that the best way to make change in the organisation was by redesign, reappointment, and regrouping. These responses were already built into the HOC Division, itself, of course, a product of being structurally hived off from Billingham, well before the OD unit was born at HOC and acquired its initial organisational structure change task.

Throughout the 1960s HOC Division was structurally organised on a functional basis. Figure 8 shows the top of the division's organisation chart in 1969. Within this structure “the real power lay with the deputy chairmen”, and without contradiction, in the mid-sixties managers commented that in a very capital-intensive and capital-growing division, “it was those parts of the division concerned with capital spending and development that were always seen as important”. This meant that Technical Department was very powerful functionally, to be followed by marketing and production. Marketing (commercial) increased in power relative to technical areas in the late 1960s and 1970s as the amount of HOC/PCD product sold within ICI declined from 85% to around 60% or less with a vasdy expanded business. Personnel for much of the 1960s was seen “as a service department outside the real business”, but they increased in influence as the industrial relations and other people-related problems were given more attention at ICI main board level, and as industrial relations conflict broke out into the open on the Wilton site at the end of the 1960s.

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FIGURE 8  HOC Division: top organisation chart 1969

Although production was strong at HOC Division, it never acquired the singular and pre-eminent position it did at Billingham Division. The focus of HOC production strength was at the works manager rather than at the director level, and although the works managers had prestige and a clearly defined position, the real prestige lay in the headquarters departments where the technical and marketing people were. Although engineering was influential at times at HOC, it and R&D were much less important in the history and development of HOC than they had been at Billingham Division and were regarded by the managers interviewed at HOC as being on a distinct plane lower in power than were the triumvirate of technical, marketing, and production.

The recurring conflicts mentioned in HOC Division in the 1960s were primarily interdepartmental ones. Most often referred to were conflicts over the allocation of resources between functions, and issues about which department controlled a piece of new capital investment as it proceeded through its various phases. These conflicts were seen to be persistent right up until the organisational changes of 1972 strengthened the business areas. As one OD unit member put it, “it was co-ordination without authority”. These issues have been partially resolved but re-emerge to some extent between the business areas. When pressed, managers did indicate that there were recurring industrial relations problems but, in their view, these were not the major source of problems. In fact, by 1965 when MUPS was presented to Olefines Works on the Wilton site and ran into the strongest trade union resistance, it became very clear that there was an enormous power vacuum on the site which the trade union organisation filled. HOC had not been discharging their responsibilities as managers of the Wilton site. In a situation where managers were conflicted in their loyalty to the site or their parent division, “that could only be decided in favour of the divisions – which controlled the managerial reward systems . . . the dynamics of the site management were now completely wrong: there was no individual with an interest in running the site as a unit, nor with the power and authority. On the contrary, there was a confusing and conflicting web of responsibility and power in which none of the interrelated systems matched” (Roeber, 1975:122). The Wilton site had to put its house in order, doing that also required complementary organisational and people changes in HOC Division. Out of both of those requirements permeated the first use of OD technologies and ideas at Wilton, and in HOC Division.

MUPS/WSA and the Wilton site, 1965–72

MUPS/WSA, the companywide productivity bargain, has been extensively explored by Roeber (1975) and we have considered it and its intertwining with the evolution of OD in Chapters 4, 5, and 6.

MUPS (Manpower Utilization and Payment Structure) emerged in the company in 1965 as an agreement between the company and its Trades Union Advisory Committee to work towards greater manpower flexibility in keeping with the changing competitive, technical, and social developments which the company faced. Crucially, the attempt was to go beyond a straight productivity bargain of the type which became common in the UK in the late 1960s, to develop more joint problem-solving between company and unions, and to reduce the rigidities of bargaining itself. As such, it was recognised that there would be much bargaining about bargaining, that much time would be required, and that “trials” would need to be conducted at various sites to hammer out the agreement in practice. In the event it took about seven years and an extensive revision of the original guidelines (MUPS became WSA – the Weekly Staff Agreement – in 1969) before the agreement was in place across the company.

One works at Wilton (Olefines Works) was chosen for one of the first trials, partly because the company expected Wilton to be a difficult case. It more than lived up to that expectation.

As we have mentioned, the overall responsibility for the management of the Wilton site had been given, in 1962, to the HOC Division. Despite the fact that most of its own expanding production plant was located on this site, the divisional headquarters remained at Billingham, north of the river and the divisional management showed no great enthusiasm for site management. Thus by the mid-1960s the only effective sitewide “managing” bodies at Wilton were shop steward committees.

The shop stewards were naturally suspicious of MUPS on the basis that it was handed down to them initially by the company and by their national officials. And the craft unions were particularly suspicious of the “flexibility” aims which they saw as an obvious basis for the erosion of the hard-won skills and prerogatives which defended their membership. In addition, one must not lose sight of the issue of money; it was not clear that the proposed levels of payment under MUPS were sufficiently attractive. Some craftsmen had built up quite high levels of earnings in the existing, complex payment scheme with its estimated incentive bonus and with overtime.

In any case one group of stewards at Wilton (the AEUW stewards) refused to take part in even the initial talks about the first trial of MUPS at Wilton. They were soon joined by their other craft colleagues. It is important to remember that at Wilton and on other ICI sites there are essentially two separate, but interlinked, sides to production. The plant is operated to maintain a series of chemical processes which transform oil into intermediate chemicals. The managers of this side of the business are largely graduate chemists and the operators are general workers – mainly members of the T&GWU. An important aspect of MUPS was to recognise reward and maximise the flexibility in these jobs which became increasingly important with the development of giant and highly interdependent plant. This plant, however, requires construction and maintenance and this, engineering, side of production is managed largely by engineers and manned by members of craft unions. In the middle 1960s some 2000 men worked in these areas at Wilton and they essentially blocked any significant progress on MUPS for several years, despite the fact that slow progress was being made elsewhere in the company.

By 1968 the setting up of the Callard Committee to focus main board attention on the problems within MUPS was also a signal that the Wilton site and HOC management constituted something of a negative landmark in the company. In particular a running battle was developing between the company's central personnel department, which was the architect and prime mover behind MUPS, and senior HOC managers who were arguing for more local authority and the development of “mini-MUPS”, more adapted to local conditions. This was never granted, but the overall package was redesigned centrally and emerged as WSA in 1969.

There are many colourful and in the main consistent descriptions from managers of the Wilton site problems of the period 1965–68. In the search for causes of the lack of control on the site most managers talked of their HOC colleagues at that time as “not wanting the people problems of the site”, or of “only being interested in the Olefines plants and couldn't care less about the rest”. The site works managers “went their own way. They didn't meet.”1 There “was a tendency of some works managers to run their works as private feifdoms answerable only to some distant prince” back in their division. “The disintegration that started was very obvious . . . the unions picked this up and very rapidly started playing off one works management against another . . . it was near to cracking up. Productivity was appalling. Labour relations were terrible. Nobody at any level was co-operating – except the unions.” By this time the senior shop stewards on the site had organised themselves into an unofficial site committee complete with an off-site office and newsheet. As Roeber (1975:122) has argued, “the only body with a structure appropriate for operation on a sitewide basis, the power and will to do so was the unofficial committee of senior shop stewards”.

ICI publicly acted to take a grip on Wilton in October 1968. HOC appointed its then personnel director, John Harvey-Jones, as a divisional deputy chairman with responsibility for the Wilton site. Harvey-Jones takes up the story:

We had a site, in terms of its leverage on ICI which was absolutely key . . . There was a very strong shop stewards organisation, they faced a totally disparate and weak management who took their instructions from seven different divisions, each of whom couldn't give a — about the totality . . . The problem became how to get a grip of the management without the use of hierarchical power – because I couldn't get that. I tried but it was just too much for the main board to swallow.

Harvey-Jones later described his objectives in these terms:

I tried to do three things. The first was to try and get management to have some mutuality of respect and some identity of interest. So I had to get a grip on them and remove some of the disintegrative interventions from the divisions and from the centre (Millbank). The second thing was to try to rebalance the power between management and shop stewards. We solved it really by taking and winning a number of quite small strikes, culminating by firing the leader of the shop stewards committee. The third thing was to try to introduce a totally different style of management on a more collaborative, problem-solving basis.

While the above objectives were being pursued, Harvey-Jones and the chairman of HOC Division adopted a deliberate public relations strategy towards Millbank to try to improve the perceptions of the site and to give themselves room to make the changes which were needed. There were then three related elements in the site development strategy which emerged in the period 1968–72. These concerned:

1.  Site management committees

2.  The Coverdale programme for management development

3.  Continuing negotiations with the trade unions on WSA

As regards the first of these, a number of co-ordinating committees were introduced or strengthened. The most senior of these was the Wilton coordinating committee which was made up of a deputy chairman from each of the five divisions with works on the site. It was chaired by John Harvey-Jones and served the important function of symbolising a high-level commitment as well as providing a forum for policy initiatives.

The most important committee in all this was probably the works managers committee which already existed, but which Harvey-Jones used as a central focus for his efforts towards “siteliness”, as it was called. The works managers were the senior, landed representatives of the various divisions and had, in effect, become barons on the site. Besides spending a lot of time with this group, Harvey-Jones sent them on a Coverdale course, and got agreement from their divisions to include his assessment of them in their annual appraisals.

In addition a number of other cross-site committees were set up at lower levels – for example for engineering management. All of these things served to provide a statement of purpose and a framework for co-ordination and exchange of ideas, not least in regard to the continuing issues of WSA.

The second major strand of the change strategy was an attempt to put some flesh on the bones of this framework in the form of a common managerial language and set of procedures as developed in the site Coverdale programme. The basic building blocks of this programme were one-week courses. These courses aim at developing a common “systematic approach to problem-solving” by giving small groups of managers (who do not normally work together) a series of problems to solve. The emphasis was on the recurrent processes of group problem-solving, such as information-gathering, planning, acting and reviewing, and on the need to avoid losing sight of consciously managing these under the weight of detailed tasks.

The courses were run by a combination of Coverdale staff and Wilton managers who were seconded to do this training and to co-ordinate the programme. The first, abbreviated, courses were run for works managers in January 1969 and by the end of 1970 more than 1000 managers and supervisors had been through the courses. The programme continued on a diminishing scale through 1971. The total cost of the programme was estimated at about £300,000. Assessment of its value varied among those involved. To an extent the programme was itself hampered by the balkanisation problems which it was to help solve, because some works and their top management were more enthusiastic than others, and it was generally hard to get commitment to cross-works follow-up projects. In addition, it should be noted that the management of the engineering activity (ESW – Engineering Services, Wilton) opted out of Coverdale and developed their own PERA-based programme for supervisors. Nevertheless, the programme contributed considerably to the development of a common language and to the sharing of common problems across the site, particularly at middle managerial levels.

The third major strand of Wilton's development during this period was the continuation of attempts to get the MUPS/WSA negotiations under way. In the winter of 1969–70 a senior craft shop steward was fired and, after arbitration, the dismissal stood and a few months later a brief strike by general workers petered out with no gain to the strikers. A number of managers remember these events as morale-boosting demonstrations, for the first time in years demonstrating that the Wilton management could stand up for itself. But the deadlock on negotiations remained, and it was now well into its fifth year.

The deadlock was really only broken in the autumn of 1970 when the company, from the centre, made a major policy shift to allow individual unions to “go on” to WSA rather than sticking to the insistence that sites “go on” as a whole. What this meant at Wilton was that the general workers accepted WSA and the disparity in the pay rates forced the craft unions to follow in 1971. As Roeber (1975:133) has expressed it, “The management got their agreement, or a form of it; the craft unions got their pay increases. Neither side got much else. There was little change in the direction of more flexible working.”

This is, perhaps, an overharsh judgement made in the light of the original ambitious aims of MUPS/WSA and of the greater successes achieved at other sites. After all the resistance, even a limited agreement made without the incidence of a major strike must be regarded as an achievement. In addition, the Coverdale training and the development of site management committees were beginning to show results. In 1970 the chief sponsor of these activities, John Harvey-Jones, was promoted to the chairmanship of the HOC Division. The problems of HOC's stewardship of the large, multi-divisional site, with its expanding and complex technology were by no means solved, but a start had been made and the exhausting evolution of MUPS/WSA was over.

HEAVY ORGANIC CHEMICALS/PETROCHEMICALS DIVISION ORGANISATION DEVELOPMENT UNIT: AN OVERVIEW

The life histories of organisation development activities in Agricultural Division and Petrochemicals Division could not be more different. One difference subsequently crucial to the fate and impact of OD in both divisions was how OD was born in each division. A further difference was in how each activity was structured once in existence, and there were still further differences in the kind of organisation changes attempted by each group, and the strategies each group used to build networks of contact and otherwise influence their respective environments. It should also be apparent by now that both OD groups were born into quite different organisational contexts, although they were created within a year of one another, in different divisions of the same company. Their fate was also quite different. OD in Agricultural Division, albeit in a form quite unlike its birth, can still be said to be alive in 1983; whereas the OD unit in Petrochemicals Division (PCD) was born in May 1970 and had ceased to exist both as a structured unit and virtually as an activity by November 1973. As a former member of the PCD OD unit later crisply put it:

“OD [in PCD] was the OD unit – however much we as individuals within it tried to explain it to others. The need for the OD unit being over, there was no further need for “OD”.

The OD unit was born in 1970 as HOC Division was experiencing temporary but difficult business conditions. At the bottom of a trading cycle the division was barely profitable and senior managers were looking with discomfort at data from studies of the division's international competitors which suggested that high relative manning levels and low manpower productivity were potential problems threatening the long-term profitability of the division. In, for HOC, a quiet period in terms of capital sanctioning and expenditure, some members of the HOC board were also questioning the extent to which the still largely functional organisation in the division provided the business focus and orientation necessary to flourish in an increasingly crowded and competitive market for petrochemicals. There was also the more limited problem of what to do with a 90-strong Management Services Department which had grown steadily throughout the 1960s on the back first of all of traditional work study and work measurement skills and then more recently in association with the company Staff Development Programme (SDP) and new knowledge and skills in management training and the behavioural sciences.

Without anticipating too much of the forthcoming story, it became clear that this Management Services Department was vulnerable in a number of counts. Its sheer size as an overhead unit in a division experiencing financial problems meant that senior managers began to scrutinise its role and impact. Its core technology, work study and work measurement was now obsolete given that ICI had with its WSA agreement abandoned incentive systems of payment, and yet the management services operation was continuing to compete against the newer problem-solving technology of operations research/systems analysis being housed in the rival Central Investigation Department.

In short, what happened was that the Management Services Department was sacrificed and its personnel scattered to various parts of the division. Tom James, the manager of the now defunct Management Services Department, was asked to join a senior technical manager, Bill Heath, and an experienced production manager to form a task force “to study the organisation of the division”. This group of three shortly after acquired one of the old sections in the Management Services Department which had been called Organisation Development Projects. The leader of this section, Ken Ward and four others, joined the task force as a resource group. Within a short space of time the task force and resource group were formally designated the HOC Organisation Development Unit. The senior of the three managers in the task force, Bill Heath, was appointed manager of the OD unit.

The primary remit of the OD unit was set out in a memorandum to the HOC board dated 15 May 1970. It was “to study the organisation of the division as a total system and to recommend changes designed to increase efficiency of operation and simplification of management”. Other parts of the OD unit's remit included studying interface problems between departments in the division and where appropriate, recommending changes in organisation. Other suggested work areas were “to select, in conjunction with heads of departments the next steps in changing management style”, and “to revise and develop the training programme for the division”.

From the OD unit's beginning there was an uneasy split between the organisation structural aspects of their work, and their more behavioural process work. This split almost exacly corresponded to the board level organisation study given to the task force component of the unit, and the extension and continuation of SDP work by the more junior members of the OD unit who had been the rump of the Organisation Development Projects section from the old Management Services Department. This business-behavioural split in the group was never the object of group interest or energy. In contrast to the early days in Agricultural Division, the leadership of the OD unit was resistant to behavioural group development of the unit itself. This may be related to the visibility and high status of the original task force trio and the pressures on that trio to produce.

This the task force did. They prepared a report recommending organisation changes which would have strengthened the product and business areas vis-à-vis the functional managers. Their report was noted but shelved because in 1971 an enlarged HOC Division became Petrochemicals Division and the division became fully involved in coping with the consequences of merging with parts of the old fibres and dyestuffs operations. But the trio's division organisation study had given the OD unit visibility and broad-but-shallow top-level involvement and set precedents for unit activity. The production manager member of the original trio left the OD unit in 1971 to help with the amalgamation of parts of the old fibres division.

The behavioural work of the OD unit was mainly led by Ken Ward. Most of this work related to SDP and in the main was located with middle managers in non-dominant areas of the division, i.e. primarily research and development and engineering. With the exception of a few section managers, this team-building and group-process work was treated with reserve and scepticism. By 1971 there was much cynicism about effort spent on SDP and alarm even amongst some senior managers about the humanistic values propounded by some of the members in the behavioural wing of the OD unit. The board level network of the more senior members of the OD unit generated suspicion and wariness among senior managers rather than trusting relations based on client requests for help. Cynicism amongst middle managers about SDP and the OD unit's association with it, and wariness amongst senior managers were all intensified by the sizeable drop in monthly staff numbers in PCD from 4890 in 1971 to 4276 in 1972.

Early 1972 was a watershed in the fortunes of the OD unit. With the production manager of the original task force trio already gone, early in 1972 the OD unit lost its manager Bill Heath. The old rival of the Management Services Department, the Central Investigation Department had been wound up and a new advisory group – the Central Resource Group – created. Bill Heath was appointed manager of this Central Resource Group. Neither of the two senior members of the OD unit were replaced, nor were two junior members who left. What remained was a small team of ex-Management Services Department people. Tom James was appointed manager of an OD unit that now contained himself, Ken Ward, and three others.

Throughout the middle of 1972 and into 1973 the major focus of the OD unit's efforts was another study of the division's structure and organisation. James took the lead and co-ordinating role in this study and worked with the American external consultant Ron Mercer in supplying information to the board. Mercer also worked as a process consultant to the board. This time no external events were there to crowd out the impact of the OD unit's work, and structure changes were thought through, adopted, and implemented in the division.

With the departure of Heath and the production manager, the OD unit in 1972 had a more cohesive and consistent behavioural orientation. But Tom James himself was heavily committed in working on the division reorganisation, and, for the most part, he left the other members to work on with the few clients they still had at the middle management levels of the research and development and engineering functions. James did not push to restore the OD unit's dwindling strength and other members, somewhat resentful of this, looked for positions elsewhere in ICI and outside it. By the end of 1973 with the divisional restructuring over and Harvey-Jones the division chairman and the OD unit'schief board sponsor on his way to the ICI main board, the end of the unit was in sight. In November 1973 Tom James was appointed to a companywide internal consultancy role and left PCD. Shortly thereafter the OD unit was would up. “Its task considered completed and its original sponsors having moved on.”

ANTECEDENTS OF THE ORGANISATION DEVELOPMENT UNIT

The description and partial analysis of the birth and evolution of OD activities in Agricultural Division in the previous chapter emphasised the extent to which both the immediate business, technical, and organisational context, the long-term history of business development and culture in the division, and some features of the immediate pre-history of OD, shaped and moulded the career of organisation development activities in that division. New organisational activities do not spring into life unencumbered by the historical and present-day context. In most aspects of organisational functioning the past weighs a heavy hand; and not just in the sense of imposing constraints but also in providing enabling conditions and opportunities. On balance the argument can be made that in Agricultural Division efforts to use the specialist OD resources to help stimulate various kinds of organisational changes were facilitated more by historical and more immediate antecedent conditions than they were hindered by them. Equally crucially perhaps in Agricultural Division a case can also be made that the OD consultants there understand enough about the context in which they attempted to make their interventions to be able to adjust the content and locus of those interventions to at times match the context. This ability to understand the historical and emerging present-day context and to mobilise the context to help justify the content and process of particular changes is a crucial general aspect of the politics of creating change in organisations.

I shall return to take a more detailed and considered look at the relationship between the broad historical and present-day context surrounding specialist-led attempts to create change and the efficacy of the strategies for change pursued by those specialist groups in Chapter 12 of this book. For the time being, one aspect of the context which influenced the birth, evolution, and subsequent impact of OD in PCD were some features of the immediate prehistory of the OD unit. It is to these antecedent conditions and their role in shaping how and why the OD unit came into existence that I now turn.

There are three aspects of the immediate prehistory of organisational development in PCD which influenced the character of OD in the division, and the tasks and fate of the OD unit. One of these, MUPS/WSA, the centrally enforced companywide productivity bargain, harshly exposed both the shortcomings of the pattern of management–union relationships on the Wilton site, and one of the root causes of those shortcomings – Wilton management's failure both to communicate with one another through any systems of coherent organisation, and indeed their capacity and interest in identifying with the site. The way Harvey-Jones, the then deputy chairman of HOC Division, put together a development strategy composed of reactivating some old site management committees and creating some new ones, together with his launching of the Coverdale programme for management development – all to increase managers’ capacity to identify with and control the site – has already been described. These efforts were the first explicit attempt to introduce organisation development activities on the site. It is important to say in passing here that OD was being used as a management tool not so much in a positive sense to assist a locally generated change which was working, but almost in an atmosphere of crisis and retribution, to assist an externally imposed change process which was clearly not working. Apart from the massive coverage amongst managers and supervisors of the Coverdale programme, and some brief team-building work stimulated by a member of the Wilton site office, that was the extent of specialist OD involvement on the Wilton site.

At the time of the creation of the OD unit in May 1970 a Wilton site organisation development co-ordinator was appointed with a role “to act as a focal point between the Wilton management, the HOC board, and the OD unit”. An upshot of the appointment of this OD co-ordinator was that nothing further of an identifiable OD character occurred on the Wilton site and the new OD unit was given clear instructions “to keep off the Wilton site”. With the culture of management–union relationships as they were on the site, and with the WSA package still a focal point for conflict, this was not the context, or probably the time, to initiate the kind of OD-led joint problem-solving work which was getting off the ground across the river at Billingham. Whatever other directions for developing OD activities were to present themselves on the Wilton site and in HOC Division, it was already fairly clear before the OD unit was created that one avenue that was firmly closed was the organisation and functioning of the Wilton site, and the pattern of relationships between management and union.

If MUPS/WSA at Wilton could hardly be characterised as a catalyst or facilitator for OD activities, what role did the other two antecedents to the creation of the OD unit have? I have in mind here the activities and image of the Management Services Department (MDS), the department where the majority of the OD unit members came from, and SDP, the particular vehicle they were using to project themselves and OD technologies prior to the creation of the OD unit.

When in 1966 Tom James arrived at Wilton from Millbank to become manager of the MSD at HOC Division, the management services activity was a strange mixture of method study 15%, work measurement 25%, apprentice training school 50%, and management training 10%. Shortly after he arrived, James appointed Ken Ward as head of a small section in MSD. This section was initially called Organisation and Management Projects Section and busied itself trying to introduce management by objectives into the division. By 1968 Ken Ward's section was being called Organisation Development Projects, and then in 1970 on the creation of the OD unit Ward and two of his four-man group became the rump of the “behavioural” wing of the OD unit. In terms of activities the continuing thread from the Organisation Development Projects section of the MSD to the OD unit was Ken Ward's group’s involvement in helping to implement the companywide staff development programme. The SDP work began in 1969.

In a situation where half of his department was the apprentice training school, and a fair proportion of the remainder was based on the fading technologies of work study and work measurement, James was probably understating the point in contending “we didn't have very high credibility. We weren't seen as a driving force and we weren’t.” The more up-to-date management problem-solving technologies of operations research and systems analysis were at that time housed in the chillingly named Central Investigation Department. If James's MSD was to have a growth area, the two most promising contenders in 1966 were management training and the new section doing MBO work being built up by the forceful and energetic Ken Ward.

Ward and his most regular co-worker Brown, partly through the novelty of their techniques and message, partly from their obvious energy and commitment, and helped also by their own background and experience as scientists, were able to stimulate interest in their work in some of the sections and units in the engineering and research and development (R&D) functions. Pushing out from their base of MBO work, they sought to involve themselves in team-building, role clarification, and other intra- and inter-group problem-solving work in whatever parts of the HOC management system they could. Early attempts to use MBO in production environments had been rebuffed, “some works managers wanted to use MBO to screw people down rather than as a development thing”. Ward and his team seemed to have more success getting work either “to revitalize” a unit such as Technical Services and Market Development which had “lost prestige and potency”, or where they were charged by a director to assist a department such as R&D which was seen to be “ineffective”. Some of the middle managers in those departments at that time later acknowledged that Ward and Brown's work had been “helpful” and “useful” but Ward and his section got little political capital from this work. In the case of the Technical Services and Market Development section, it was because “that unit folded because of divisional economic problems” shortly after the Ward intervention, and in the case of the R&D function because consultant–client relationships were always strained there. As Brown said, “We were put into that department.”

While Ward and Brown were trying to get their behavioural work off the ground, James was asked in 1967 by the division chairman to launch an operations improvement programme (OIP). As James later said, “some senior company personnel people had been to the United States and seen this at Union Carbide. The chairman agreed to try it, along with two other divisions. I was put in charge of doing it.” The principle of the exercise was that all monthly staff should submit ideas for improving anything, and each staff member would be involved in processing the ideas. Departmental OIP co-ordinators were set up and “for a time suggestions poured in ranging from the trivial to the useful”. But ten months after its launch, James went back to the chairman and said, “This has outlived its usefulness . . . We stopped it and in effect it died completely.” Another member of the division cited the OIP as an example of the HOC Chairman's superficial adventurousness. He took “adventurous acts but didn't have a fundamentally adventurous philosophy”.2 Triggered by the Callard Committee, a more cohesive and consistent set of acts were just about to be carried out by the flamboyant HOC deputy chairman, Harvey-Jones. Way down in the organisation hierarchy in Ward's section of the MSD, “1968 was a worrying time. We were searching out and selling possibilities [for change]. Our ability to operate was dependent on our own credibility.” In March 1969 with the launching of yet another central initiative, the company SDP, Ward's section was given a temporary but forceful push forward. Brown later said, “It was the SDP programme which was the company policy which created a legitimate framework for doing more OD work. It was a crucial thing for getting OD forward in ICI.” A more jaundiced view of SDP might be that in the short term SDP represented “a great leap forward” for OD, but in the middle and long term it more accurately became a great step backwards for those internal OD consultants closely associated with it.

If WSA became son of MUPS, then SDP may be construed as cousin of MUPS. In exchange for demonstrable short-term increases in productivity and improvements in working practices, MUPS had brought ICI weekly staff wage increases which had substantially reduced the differentials between weekly staff and the junior reaches of monthly staff. At the end of 1968, it looked as if further increases to weekly staff under the shortly to be negotiated WSA, would reduce those differentials even further. Staff discontent was becoming apparent on some of the MUPS sites and there was always the fear that “if the company was not prepared to look after the interests of junior staff, there were staff unions only too prepared to do so instead” (Roeber, 1975:183). Politically, there was also the requirement at this time that all pay awards had to be referred to the National Board for Prices and Incomes and justified in terms of productivity improvements.

SDP was launched in March 1969 by the ICI Central Personnel Department with objectives and procedural arrangements similar to MUPS. In each division a board-level SDP review panel was created, a divisional co-ordinator, departmental co-ordinators and a divisional SDP resource group which sometimes drew on the services of external constulants. Salary increases were to be awarded to staff when the divisional SDP review panel agreed that objectives had been agreed and set for each work group and department, and working practices at the individual and group level had been reviewed and increases in effectiveness made. Such reviews had to involve all members of staff. Aside from “an exceptional and demonstrable improvement in organisational effectiveness in the short term”, the other objective of SDP was “in the longer term, an environment in which major improvements occur naturally and continually without being enforced or imposed”.

With the experience in goal setting and group process work from MBO and its derivatives under his belt, Ken Ward saw SDP as “a spring-board for developing a divisionwide initiative”. Ward proposed a structure for handling the SDP training which involved taking groups of staff off together in their back-home work groups on three-day workshops. The workshops were to use group exercises on process and problem-solving in order to stimulate diagnostic and action planning work on back-home departmental role interface, group interface, and team-building problems. The scale of the task – SDP was meant to cover all the monthly staff3 of HOC Division – required focussing the three-day workshops on training people to do the work themselves. Ward's proposal was accepted by the HOC board and he and his team threw themselves into it with gusto. Here was a clear task, and apparently some measure of board support and legitimacy for Ward and his organisation development projects section to do it. Ward was later to say:

Really we filled a vacuum. We took it [SDP] over. That was a massive intervention. We trained about 50% of the division . . . here was a resource (us) to do something which had a lot of visibility and importance in the eyes of the board . . . We really did indoctrinate the whole division – though it didn't really stick everywhere.

There were two primary sources to evaluate the impact of SDP in HOC Division. One is a research report based on interviewing a sample of managers who had attended SDP workshops, together with the researcher's own observations from attending one such workshop (Summerfield, 1969). The other data were collected as part of this research some seven years later, in 1976. Both sets of data produce highly consistent patterns and conclusions. Summerfield (1969:3) began his report with the epitaph “until SDP becomes important to the people involved, it will not be successful”. He went on to identify seven problems “attaching to and built into the programme which are hindering its acceptance and progress”. These included a fear that SDP was a redundancy exercise; a suspicion that the HOC board was merely going through the motions to implement a change exercise spawned and imposed from Millbank; a lack of clarity what SDP was, and hoped to achieve; a belief that in the light of WSA, SDP was merely a sop to the staff with just a cost of living type of salary increase at the end of the exercise – and fundamentally that SDP was yet another “management gimmick” being peddled by the Management Services Department. In 1976 the managers and consultants we interviewed had these rather emphatic statements about SDP to offer:

My own personal feelings which you can have recorded are that it (SDP) was basically a waste of time, and everybody thought so. Behavioural science techniques were used to try to get people to think about their jobs when they should have been doing it anyway. (Senior Manager)

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It was an imposed programme which created strains with senior managers, therefore managers did what was minimally required. (Internal Consultant)

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The companywide numbers cutting exercise in 1971 made rather a nonsense of all the bold and hopeful SDP statements. People felt rather conned. (Internal Consultant)

I think there was a general positive reaction in my group. I suppose that was not maintained because of the fact that it didn't achieve the expectations . . . But we had an oscillation, great – hell – well, better. (Manager)

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It was a company initiative based on embarrassment at the effects of MUPS/WSA on differentials, so the reasons for doing it were all wrong – it didn't stick everywhere, once the money was paid, some groups abandoned the approach. (Internal Consultant)

Although attitudes to the concept and implementation of SDP were largely critical there were pockets of HOC Division, most often specialist units in R&D and Engineering, where managers felt that working relationships had been improved by the behavioural concepts and skills introduced by SDP. Some of these managers used the resources of the soon to be created OD unit. But SDP was no more than a pinprick for the still essentially technical and market-driven HOC/PCD management culture. If anything, SDP created a negative aftermath for any subsequent structured OD interventions that might possibly have come from within the HOC/PCD Division.

Here was something imposed substantially from the company centre with a commitment, forced, I think . . . It eventually boiled down to a control operation, concern with increases in salary. That to my mind has created a reaction. It has really inhibited any possibility of a programme that might be internally generated within the division with the same sort of objective. Because people will lift a lip and say that's just like SDP – and SDP is black . . . I think the market for interpersonal and intergroup stuff went when SDP went.

If SDP's real downfall was a function of its external origins and imposed implementation, and the poor fit between its essentially behavioural content, process, and message, in a technology- and marketing-dominated context; then the manner in which it was introduced by Ward and his team and their association with other “management gimmicks” from the Management Services Department didn't help either.

Ward and his section members recall their group in 1968 and 1969 as being highly task-oriented with that part of the group with strong interests in the behavioural sciences, as being “enthused” and “highly committed”. There was also the use of a distinctive language – “I suppose we tended to use jargon at that time because we thought we were the bee's knees. (Laughs.) Other people would comment not to use jargon, so we must have been using words that were not part of the division's culture.” Ward's section also recall having somewhat distinctive values about “openness”, “data rather than opinion”, “boundaries not being sacrosanct – something to be pushed against and not accepted”; and of emphasizing the importance of “people values and growth potential” at work. This kind of subcultural distinctiveness earned them the labels “headshrinkers and trick cyclists” and a feeling that “we weren't very identified with the business”. The fact that when Ward and Brown met OD people outside their division and company, “we were seen as way over towards the business orientation rather than to the behavioural side . . . so we saw ourselves as being very business oriented” perhaps emphasises rather than de-emphasises how far apart culturally the OD projects section in the Management Services Department was from the dominant concerns and values of HOC/PCD in 1968 and 1969.

But Ward's sections’ high profile on the SDP activity also brought out into the open jealousy and resentment from other individuals and groups in HOC Division who may have laid down some specialist claim to be in the management training and OD business. “I have to be honest and say I really found them a bit unbearable, like I thought they were trying to teach me to suck eggs . . . and I really did believe that they had gone overboard on participation and team building, and neglected some of the values problems, and the functional aspects of organisations.” Even Tom James acknowledged, “We were perceived to be going a bit far out in all this OD stuff– particularly in the training area . . . there was doubt and uncertainty among the senior management.”

A long-term operator and survivor in the HOC/PCD management culture pinpointed the real affrontery about Ward's section was that they were beginning to offend the core of the HOC culture – its concern with hierarchy, structural clarity, and management control.

Ward and Brown were doing their thing with SDP – they were working very hard on the autonomy self-direction axis. All of a sudden this became for real. Ward and his men had tapped some energy, some real dissatisfaction with what was a very mechanistic bureaucratic organisation. A lot of fears were expressed to me about loss of control in what was really a bottom-up situation with no commitment or understanding from almost any of the senior group . . . the director responsible was a systems man by training and didn't like this because it was kind of a “thousand flowers grow” thing – and that's a phrase we used. He was saying, “I don't like what's happening. I feel we're losing control.” . . . You know we were starting by then early in 1970 to feel the first breath of the whirlwind on real economic stringency. Anyway, one day, out of the blue, the director says management services is to be disbanded. Bang! Caput! . . . the signs of the coming economic problems were already there to the senior people, so what a better way to get a name for yourself then by doing away with a department!

This director recalled his part in the downfall of management services in slighdy different terms:

When I got on the board there was an enormous Tom James’ department (MSD) and there was the Central Investigation Department, and there was Tom James’ fear that I was going to be unfair and support my old department against him. There was an almost universal whisper that Tom James had far too many people, and they farted about and wasted too much time. I dithered about and I consulted the deputy chairman . . . in the end I decided that good management required a touch of steel and in that I was backed by the deputy chairman and we did it. . . We wound up Tom James’ department and, I think the OD unit was one of the valuable pieces of fallout from that.

And so the OD unit was born out of the ashes of the Management Services Department, not an auspicious beginning. James was told his old department was to be dismembered just after he returned from an OD course.

It was a most astonishing bit of work. I had just been to Eastbourne learning about change, I was now being put into a role which was expected to make organisational change and I had just been obliged to force on my department a change which broke every rule in the OD book. I felt hurt for myself. But I felt worse for them . . . I couldn't get across to [the director responsible] the personnel problems he was giving me.

Ward later recalled the break-up of MSD “was really done in a most brutal way. There was a tremendous sense of hurt.” Brown commented that part of the problem was that James was taken straight out of his old role and put onto the organisation structure task force:

James was hardly able to manage the dissolution of the department, people felt very sore about that. People felt . . . we felt he'd deserted us. I felt that to some degree . . . but later it seemed to me that he was prevented from carrying out his job by the organisation.

With this kind of immediate prehistory, and with the nature of the task and leadership it was given, there seemed every likelihood that the OD unit at HOC/PCD would never be anything more than a tool, and possibly a temporary one at that, of the senior management of the division.

THE BIRTH: FROM TASK FORCE TO ORGANISATION DEVELOPMENT UNIT, 1970–72

Compared with the rather slower and arguably deeper process of evolution of OD resources in Agricultural Division, the birth of the OD unit in HOC/PCD was an instantaneous event. With board approval the three-man task force to study the division's organisation was in place in May 1970. Tom James had come from the now defunct Management Services Department. John Parker came into the trio as an experienced production man, and Bill Heath with his status as ex-manager of the powerful Technical Department was the leader of the task force. Shortly after the task force began their work, they acquired Ken Ward and most of the Organisation Development Projects section of the dismembered Management Services Department. Ward and his group of four were to be the resource group for the task force. Under pressure from the resource group, who “felt second-class citizens”, the task force of three shortly agreed that all eight should go under the banner of the OD unit. Bill Heath was appointed manager of that unit.

Although the OD unit made an instantaneous appearance as an identifiable structured department, the departmental origins of its personnel, and in particular the mixed attitudes which already existed to Ward's section and the “zealous and forceful” manner they were introducing SDP, meant that the OD unit by no means started off attitudinally with a clean sheet. The OD unit also had the opportunity and the problem of being openly sponsored by the new chairman of the division, John Harvey-Jones, though formally they reported to the organisation and training director. Harvey-Jones had by this time gone some considerable way to successfully tackling the change problems of the Wilton site, and was now turning his not inconsiderable skills as a flamboyant leader and articulator of the need for change, to HOC Division. A paper Harvey-Jones wrote for the HOC board called “Very Long-Term Organisational Aims”, about six months before the formal creation of the OD unit, contains some of the rationalisation which eventually appeared as the remit for the OD unit. In this paper Harvey-Jones talked of pressures to change our organisation from a realisation that “we cannot obtain sufficiently high productivity or efficient use of our people from the existing structure”. There was also a recognition “that our present organisational structure is not meeting the changes in technological advance and human needs which are occurring both outside and inside the company”. Harvey-Jones was also prepared to reinforce what he saw as “experiments towards a form of participative management”, and to argue that increasingly he thought younger managers would be seeking clarity of objectives, within more flexible structures where there would be “complete frustration with rigid and authoritarian systems, and contempt for power derived from a hierarchical position”.

Even coming from Harvey-Jones this must have been a pretty heady message for many senior managers in HOC Division to take, for as one manager said of the HOC/PCD management culture, “underneath the christian name bit we're a pretty bloody stuffy hierarchical organisation”. Harvey-Jones later acknowledged that his predecessor had started the process of changing HOC Division, but that when he became chairman he saw OD resources as a tool to carry this process forward:

I do not believe that running OD through Personnel or through Training gives it the best chance of success. Certainly my attempt was to try to get the thing linked through to some direct line management power . . . I saw a growing need to have OD consultants because my hope when I took over as chairman was to introduce a much more open management style. That was the first of the three objectives I set out when I became chairman. The others were slimming numbers and a fairly conventional profit objective . . . Heath, James and Parker, that was mine. I set it up as a task force. They were used by me, but were available to anybody else to help the process of change in the division that I saw as necessary . . . I used to drop in on that team of three about once a week. I used them as a sounding board and for specific tasks . . . eventually they wanted to become an OD unit rather than a task force.

Although Harvey-Jones created the original task force and then used it in a fairly direct and close fashion, there were early suspicions from his board about the task force, and Harvey-Jones had to deal with the wishes of some of the traditionalists in the division by appointing Heath and Parker to the original group. Harvey-Jones takes up the story:

When I became chairman my two deputy chairmen were both old, miles older than me . . . I had a major problem keeping one of them on board . . . The sort of way I wanted to run the division and the sort of division Chris wanted were just about at the opposite ends of the pole . . . When I set up that group [task force] Chris and the other deputy chairman were both petrified that I was going to have in it a bunch of long haired spooks who were going to upset everything . . . So when I set up that unit I did it with considerable debate with Chris and the other deputy . . . Bill [Heath] had tremendously high credibility particularly with Chris . . . and John Parker was one of the hardest nosed managers around the patch.

Harvey-Jones’s recollections of the reasons for setting up the task force, and the areas it might work in, are confirmed by James, Heath, and Parker. Harvey-Jones had some fairly definite ideas about OD. He saw the need to expand the division's business, contract its manpower, and relax it in terms of its attitudes and behavioural processes. He saw the need “for more openness, frank talking”. Judging from the comments made later both by the initial task force and members of the HOC board, some of the seeds of the OD unit's eventual destruction were there right at its birth. It is clear both that not all the members of his board accepted Harvey-Jones’s vision of the future character of HOC Division, or of a role of OD in influencing that future character. There were quite different implicit assumptions in the board about the role of the OD unit. Some saw it – perhaps a very small minority – as a primarily behavioural way of improving existing processes. Others saw it as diagnosing needed structural change, and others saw it as largely contributing information to deal with the numbers/costs problem. Only Harvey-Jones saw these as linked. For example, Parker later commented that one of the deputy chairmen “saw us simply as a group of people who might help him in certain specific and numerate exercises – counting heads, etc. He was very competent – but not particularly oriented to people problems.”

Another deputy chairman who was interested in organisation problems because he believed that “most of the division's problems would be solved by filter-free, accurate communication”, was also seen to be “very strongly opposed to all this long-haired behavioural science stuff. A member of the board at that time acknowledged the differences on the board; the difficulties the OD unit would run into; but recognised there was some advantage in Harvey-Jones’s approach to try and change HOC Division:

It sounded to me at the time to be a bit artificial. And that was the view of a lot of people in the division. It was a creation of John Harvey-Jones. I didn't really see how that particular group of people, Heath and Parker, although very able, would be able to bring much to bear on the organisation thing. I thought Tom James on his own would have made more sense . . . but the advantage of doing it that way was to hit the donkey [HOC] Division between the eyes with a brick. That's not a bad way of tackling the thing if you've got the power, the personality power.

But if the donkey was to be hit between the eyes with a brick, a further difficulty the task force and the OD unit had was that at birth the senior managers expected that the task force would only be given one, perhaps two, occasions to throw the brick. Both Heath and Parker recognised this was literally a short-term assignment to a task force. James also commented on the particular and temporary nature of their initial assignment:

They created a task force that I think was perceived to be a one shot thing. The job was to work out what the division's organisation should be in ten years time. I think it was perceived that we'd do that, help begin implementing it and, in two years time go and do something else. Because of my OD training at Eastbourne I didn't agree. I thought we needed an on-going change unit, not endless, but not one shot.

The nature of the task force's rather singular and personal sponsorship, the mixed assumptions about its role, and the manner and form of its creation did not augur well for its impact or longevity, but in June 1970, Heath, Parker and James began their study of the HOC Division organisation. Initially the task force trio “were closeted a lot together, and we interviewed a lot of senior (not board) managers” about their views of the functioning of the present – largely functional HOC organisation structure. Even though the trio were themselves fairly senior managers who already had established relationships with the division senior manager group, and some measure of personal credibility from their previous functional roles, they ran into difficulties. One of the trio commented that they had credibility problems working as consultants – “we had to try to learn the skill of making an intervention fairly quickly”. But their more basic difficulties derived from three other components of the change process they were part of.

In the first place they encountered problems with one of the core tenets of the functional, and hierarchical organisation they were seeking to analyse and change – the belief strongly held by many managers that “they should own and solve their own problems”. This led to “a basic difficulty in getting over questions about what exactly was our role . . . what are these self-styled experts going to do? . . . particularly when each one of us was well known for what we are. In other words I was known as an experienced production man, so what am I going to talk to marketing about, or technical department?” Second, the trio had to live with the mixed images that came from being associated with the board. “We had a lot of relationships with senior members of the board. Some people saw this as a threat. Other people saw that we really didn't have all that much backing – so why bother? It could get you both ways.” Finally, as one of the trio said “the process around the study was all wrong”. The idea of the study had been largely Harvey-Jones’s idea and few of the board members had been drawn into the data collection and analysis phases of the study.

Early in 1971 the trio produced a yellow paper – a paper meant for discussion rather than decision. This paper introduced the idea of a matrix organisation to the HOC board and senior managers, and recommended a strengthening of the product area managers against the functions. The yellow paper at that moment turned out to be a “lead balloon”. One of the trio remarked:

The time constraint was always there. The listening constraint was always there. When we produced your yellow paper one of the deputy chairmen (broadly supportive of the trio's work) said “Your big problem, of course, is communicating with the board. You'll be lucky if some of them read it.”

Those board members who did read it did not long concern themselves about local organisational changes for bigger structural changes were already under way, which only one or two members of the HOC board were aware of. Since early in 1970 a three-man working party of the ICI main board had been looking at company organisation in the light of “declining profitability in some business areas”. The upshot of this main board working party was the reorganisation announcement made in early 1971 involving Nobel, Dyestuffs and Heavy Organic Chemicals Divisions and ICI Fibres Ltd. Out of this company reorganisation HOC Division became Petrochemicals Division and amongst other things acquired ICI's unprofitable nylon operations. Harvey-Jones as the HOC chairman had of course been consulted in this arrangement, but there was a widespread recognition amongst HOC senior managers “that the change was imposed by the main board with virtually no consultation with the division”.

The impact of all this on the task group and their yellow paper was instantaneous. The yellow paper went out of sight and out of mind. With memories of previous amalgamations involving HOC, Harvey-Jones was determined there was to be no crude takeover by the old HOC Division of the former Dyestuffs and Fibres operations. “I instructed that none of the functional departments or the OD unit were to go tramping around saying you've got to do it this way, but that the Nylon people could come and ask for help.” As it turned out, Parker was transferred out of the three-man task group and asked to discreetly assist with the merging of the new production facilities into the division. The OD unit's first attempt to influence structural change had been overtaken by events.

While Heath, Parker, and James had been working on their organisation study and writing the yellow paper, the other part of the OD unit, Ward's section from the disbanded Management Services Department, were in something of a state of limbo. By the middle of 1970 they found themselves a victim of the break-up of the Management Services Department, as a resource group to a task force which largely kept to itself, and in a situation where the former intensity of their work on SDP was fast declining as more and more of the division's managers passed through the programme and qualified for their salary increments. Faced with these uncertainties Ward, Brown and the others tried to focus some of the OD unit's energy on its role, purpose, and internal life.

Internal life of the OD unit, 1970–72

By the time Ward and the others appeared the task force trio had a clear task and had developed a very easy working relationship. “Heath was notionally the head but we operated as a triumvirate.” But “we [the trio] were closeted a lot and this generated some suspicion . . . which Ward and Brown raised. So Heath instituted an informal Monday morning meeting. Here we discussed pressures and priorities.” These meetings were kept fairly task-oriented and businesslike. Heath resisted any off-site team building events of the kind practised by the Agricultural Division Swallow group, although occasionally the OD unit did use external consultants for discussions about “role, objective and strategy”. But basically the two parts of the OD unit never gelled into a cohesive whole. The trio had a clear task and a powerful sponsor, the other members of the unit had to find their task and negotiate their sponsorship wherever they could. Given their association with the now discredited MBO, and the fast-becoming-discredited SDP, this was not easy. They were widely seen as “behavioural types”. Heath was later to say “my view is that behavioural OD was, and still is an infertile field with this particular set of people” (the PCD managers).

From the creation of the OD unit there “was a difference of approach in the group which we were aware of, and referred to as a ‘left-right’ difference. The left were the behavioural types, and the right the structurally oriented, and we pulled each other's leg about it.” Heath in particular was seen as “right wing”, as being “miscast as the head of the OD unit”, of being “suspicious of some of this behavioural stuff, and of finding “OD a bit embarassing to live with”. Intellectually Heath was a firm believer that changes in managerial attitudes would only follow changes in organisation structure. There were also basic differences in the unit about values, and the way to create change. One member of the unit commented:

The schism was Heath versus the rest, leaving Parker aside. In the early days Heath had no idea what the values of OD were. Before he left he had some idea but he didn't change his values . . . For the rest there was a belief in change through ownership; that change is a learning process; values around the dignity of the individual.

A member of the behavioural wing said: “we valued openness, data not opinions, and confronting. None of these were shared by Bill Heath. He would be more political, more into power and power relationships. He was probably more of a realist than we were.” But Heath's realism was later seen to be not at the service of the group but as a control strategy by the directors who recommended his appointment. “Certainly at the start of OD, and I'd like to emphasize this point, there was a distinct element of control as well as credibility. Bill Heath to my mind was there, part as a manager, part as a watchdog to see that these wild and woolly men didn't go clean off the rails.” Another factor which divided the “right” and “left” wings was their commitment to OD as a vehicle for helping people. The left wing saw the right wing as treating their work just as “another job”. The right wing saw the left wing as being overcommitted. “For some of them it almost amounted to dedication to the need to help people. In my opinion this at times led to over-confidence in their ability to help people.”

No doubt partially influenced by their observations of work going on in Agricultural Division, the behavioural wing of the OD unit at PCD had visions of working with the Wilton shop stewards. But “the OD unit was not, and specifically agreed not to be concerned with payroll, because the Personnel Department have the problems of dealing with the payroll”. Another member of the right wing agreed with Heath's clear intention of preventing the behavioural wing from getting involved with union matters. “Heath and I were dead against it. We felt we were not ready and certainly the people who were talking about it weren't ready.” So unlike their opposite numbers in Agricultural Division the PCD OD unit “stood very clear and very separate from the personnel function”. The one OD resource on the Wilton site who John Harvey-Jones had encouraged was located in the personnel function but he was described by members of the OD unit “as a colleague at a distance”. The personnel function was described by the OD unit left wing members as “a great stopper rather than a great initiator”. During the assimilation of part of the fibres business into PCD, one of the OD unit accompanied members of the engineering function to discuss their personnel concerns. “As a measure of how OD was seen by personnel, I was accused of being a shop steward.”

By the summer of 1971 the lack of cohesion and direction in the nine-man OD unit was exacerbated by personnel changes. Parker left to work on the merging of new production facilities into PCD, and eventually resumed a successful career in the division as a works manager. With the end of the formal side of the SDP activity one of the OD unit was made redundant, and another individual was transferred to the personnel function. Of these three only Parker was replaced – by a production man more junior than himself. Heath meanwhile “was gradually losing interest, and focussed himself on the directors”. With the yellow paper shelved Heath concentrated more and more on working with the directors on division business planning.

Towards the end of 1971, the director who had been instrumental in breaking up the Management Services Department partially, it was felt, because the MSD continued to compete with his “up-and-coming operations research/systems-based Central Investigation Department, himself left the division. With the CID's sponsor and protector gone, in characteristic fashion there was a further structural realignment. The CID was disbanded and a Central Resource Group created. This Central Resource Group became a new and fairly prestigious source of help on “one-off jobs the board saw as necessary in the economic forecasting, computer, production scheduling and planning, and strategic thinking” areas. Bill Heath was transferred from the OD unit to become its first manager.

With Heath gone, James was made manager of the OD unit. Up until this point James had uneasily straddled the right and left wing split in the group. His prior training and experience in work study and his association with the 1970–71 organisation study and yellow paper had given him a clear right wing image and role, but his encouragement of Ward's OD projects section in his former role as MSD manager, together with his exposure to OD technologies and values at the Eastbourne training event, had left him predisposed to behavioural process issues. How he was to interpret his role as OD unit manager was largely decided for him by the renewed interest of Harvey-Jones and one of his deputy chairmen in structural change along the lines of the 1971 yellow paper. In his own words, the activation of the second board organisation study meant that for the last 18 months of the OD unit's history James was to become “more of a doer than a manager. I reported direct to a deputy chairman . . .”

DEMISE OF THE ORGANISATION DEVELOPMENT UNIT: 1972–73

1970 and 1971 were bad years financially for HOC/PCD. The problems of running the division were further complicated in 1971 by the acquisition of the ailing nylon operations from the ICI group, and the new capital projects and production facilities of parts of two other divisions. PCD also had to make its contribution to reducing the ICI group's employees at that time. With some of the initial problems of the merger over, Harvey-Jones returned to one of his original three objectives of bringing about some structural change in PCD to strengthen the business orientation of the division. The main focus for the OD unit's external links throughout 1972 was the second organisation study. By the end of 1972 the PCD board had accepted the need for, and had implemented a significant structural change away from, a largely functional organisation toward a stronger matrix organisation than had been recommended in the yellow paper. The changes mainly affected the board and senior management group. There was to be no more “top box” composed of the three deputy chairmen and to which directors would report. Directors would now report directly to the board with deputy chairmen acting as “resources not bosses – uncles not dads”. Further business focus was given to the division by greatly strengthening the business area concept and putting each business area under a director's wing.

The process by which this change was achieved was quite different from the abortive first organisation study. The first study involved a longish period of fairly isolated data collection, thinking, and analysis by the task force trio, with some contact with senior managers, but little contact with individual directors, and certainly no collective board work on the ideas produced in the yellow paper prior to its appearance. The second study was also vulnerable because initially it was still only being sponsored by Harvey-Jones and one of his deputy chairman. “There were board suspicions about the chairman's motives and the deputy chairman's motives – a fear of a fait accompli . . . Some directors felt a bit personally threatened . . . There was not as much commitment in the board as Harvey-Jones thought.”

James was the leader and co-ordinator of the study and in the absence of Parker and Heath the other members of the OD unit played a bigger, more public role in the work. Data were collected by the OD unit in three areas. “The first was factual, facts and figures about the existing structure. The second was feelings about the existing structure, and the third was theoretical – we drew heavily on Lawrence and Lorsch” (1967). One device used to engage the initially “very antagonistic board” in the study was to take them to other parts of ICI, and other firms to discuss alternative structures and their operation. “And it was amazing to see the change in attitude of these people. They suddenly became much more interested. There were different ways to run a business. We got much more commitment from the board.”

James was the major internal link man with the board and had role problems with them. “One of the big issues for me was to get the board on board. I had a personal problem with some of them to understand how an insider can stand aside and behave like an outsider. I asked Harvey-Jones to allow me to meet with the whole board once a month . . . I told Harvey-Jones I needed some consulting help from Mercer and that was agreed.”

The process we worked was definitely OD but the focus was structure . . . if the focus had been norms or culture that would have been much less acceptable. Harvey-Jones would never have set up a study which had the avowed aim of changing the culture . . . Generally the legitimization [for OD in PCD] was roles, structures, tasks and so on.

But in fact as James was to acknowledge as far as the board's attitude and behaviour was concerned, “we were building on some foundations which Mercer had helped lay”. Here again is another illustration of the general point that successful change often requires longer-term process preparation and climate building; and yet another particular example of Mercer's impact in ICI. Explaining the how and why of Mercer's impact in this situation is worth a short diversion.

Before the appointment of Harvey-Jones as division chairman, and indeed for a while after his appointment, the PCD board had not operated well as a team. A director commented that “when I got onto the PCD board I found them all worth knowing, expert, full of ideas but a group that was unable to use its total talent. The tradition was you put up a note and if there was any criticism of it everybody (from your function) lost marks.” Harvey-Jones was encouraged by George Bridge, then in central personnel department, to invite Mercer to do some process work with the board. The HOC board, unused to thinking in process terms, were sceptical before and after Mercer's first encounter with them. A director had this to say about Mercer's early contact with the HOC board:

Well, when Harvey-Jones first introduced him I think a number of members of the board were very, very sceptical, and when after his first day at the [Wilton] castle, Mercer in his normal way hadn't really done anything, they thought “well bugger that, what's he getting his fat fee for?” But latterly the board found it to be valuable, but there's no enthusiasm.

Another director felt that Mercer “had loosened the process up . . . I think by the time I left the PCD board it was a very coherent team – very supportive . . . a lot of that was due to OD . . . I think they've lost it under Harvey-Jones’s successor.” Harvey-Jones was clearest about some of the keys to Mercer's impact:

Ron has supremely good skills at operating at board level – less as you go down. He is a very, very sensitive and acute process intervenor and he also has enough mechanisms – in a sort of gimmicky way – the ease the problems. So the two things reinforce each other . . . The “right wing” grasp the usefulness of the mechanisms without even seeing the process interventions.

Mercer had had time to influence the PCD board before the second organisation study began. This process work, plus Mercer's involvement at the time of the study, and James’ own view that “at the end of the process of his meeting with the board for 14 hours over a two and a half month period – the level of openness, honesty and maybe even trust had increased”, all contributed to acceptance of the change. By the end of 1972 the board had agreed to the detail of who was to have which business areas; and the rest of the division had been informed. In 1976 James did another survey of board attitudes to the structure created in 1972 “and the board saw no need for fundamental restructuring – as they had done in 1971”.

Behavioural work in R&D and Engineering

Throughout the history of OD and related activities in HOC/PCD the powerful production, technical, and marketing functions were a closed book as far as the OD unit was concerned. If any behavioural type work was to go on this left only the relatively lower prestige R&D and engineering functions. There were occasions when Ward, mainly in R&D, and Brown, mainly in engineering, were able to find receptive clients for their ideas. Some of these clients came from earlier associations made at the time of the MBO and SDP work, some of the work came at the request of directors responsible for those functions. Most often the context for the intervention was either just before or after redundancies in those functions, or to help with the merging, realignment, or reshaping of sections in those two functions. An example of morale and redundancy-related problems was the work done in R&D and Engineering in 1970 and 1971 as a consequence of the collapse of the division's capital programme between 1969 and 1971. In 1972, the left wing of the OD unit were also involved in helping to merge different parts of the R&D function. Some of this work was successful, to the point where a few middle-level managers in those two functions carried on using OD technologies long after the OD unit had been disbanded. But Ward and the others had often to push pretty hard to break in, and where they didn't have to push hard, they were often landed with some messy human problems.

Heath commented:

Certainly Ward, Brown and Castle were respected, felt to be useful, but they had to go and look for jobs, they didn't have people bumping on their doors. And usually they were turned to by a manager when he had a nasty difficult problem to deal with – like having to get rid of some people.

One of the managers who became a periodic user of the OD unit confirmed they had to, and did push for work:

I don't think they employed the dripping on the stone technique. They came in with a bang, and therefore you had to have a receptive customer . . . I had some problems and saw them as helpful . . . They were prodding, proactive, saying there must be scope for improvement. Ward certainly talked in that vein. He came and provided some alternatives . . . If you went to Personnel and said I'm having a problem, the answer usually was “bloody well solve it”, the OD people were just not part of the management structure – they were seen as a team of advisors and they insisted that what we said and did was confidential.

But the OD unit found it much more difficult to project and sustain an image of not being part of the management structure than their equivalent OD colleagues at Billingham. The PCD group were too close in many people's eyes to a select group of the board, and to the board's obvious interest in 1970 and 1971, in slimming numbers. As one of the OD unit put it:

I’ve a general belief that numbers reduction never helps OD. OD may help numbers reduction.

One of the managers who later used the OD unit acknowledged that “it started out with a bit of a gestapo image. I never thought it, but I heard it around: they're going to come and tell us how to run with so many less people. Around the SDP time or a little after.” The OD unit members were aware of their image as the tool of the board:

I feel we gradually built up a lot of credibility with the board and with the departmental managers – the people we'd been working with. But below that level there was still a bit of fear, particularly when the numbers started dropping – the OD unit were seen as the hatchetmen doing the dirty work for the board . . . The number of people we were directly dealing with was quite limited, about 50 or 60. These were the only people in a position to really judge what we were doing.

Sometimes the OD unit were able to influence individual directors to use OD methods to create change. Ward said that a director “was all for carving up R&D as he had done management services. I persuaded him to let me work with them and make these changes themselves over 18 months.” Where this happened, the OD unit were better able to control their impact and image and win friends who returned more than once for help. A manager in R&D who had used MBO in 1967, worked with the OD unit in 1972 and 1973, and then in effect became his own consultant. He commented:

Yes . . . OD has become a way of life to me, and I think a lot of this is spinning off into members of my section . . . I have used OD at times because I've found myself in trouble, because of the way people in my section have responded to a change in the environment. For example, company policy in response to its economic situation has lowered morale (via manpower cuts).

The team-building, objective-setting, and role-clarification work did often have its successes, particularly where they were working with a relatively self-contained section. Where, however, they got into interdepartmental problems, for example between Research, Development, Engineering, and Technical Departments, a lot of this more politically charged work “was totally abortive”. An exception to this was team-building work in some of the fairly important product areas (before the structural change to business areas), and getting R&D integrated on a business area basis.

But the penetration of the OD unit into PCD was always very limited. They had their legitimate channel to the board – the organisation studies. They had one or two active supporters on the board who at times sponsored them on work into their departments, and they had their middle manager friends and clients in R&D and Engineering built up during the MBO and SDP days. Many of the division managers had so little contact with the OD unit, they were not in a position to say what the OD unit did:

I asked the managers what they thought the OD unit does? It wasn't a question of them saying, “Oh my God. They're way out.” Wasn't that at all. Either they didn't know, or somebody had done a study on transport drivers for them, or somebody had sat in, as a process resource. Or nothing had happened, and they didn't have the faintest idea or interest in the OD unit.

The great majority of the managers in PCD were “doubters – people we hadn't worked with”. There were few “active opponents, people putting the knife in”. Of course, in the powerful functional departments – the marketing and technical areas – they found some of the cornerstones of the divisions management culture. The concern for hierarchy and status, the technical arrogance which combined to produce attitudes where “apart from person to person relationships, a guy that is not as senior as you can't offer anything of value”. This led to a stated view towards the OD unit, “I know how to run my outfit. We don't need you cowboys!”

In this climate of ambivalence and rejection, some of the OD unit added to their problems by overmarketing their services – pushing too hard:

We’ve had a succession of things – MBO, Blakes Grid, OIP, SDP and OD itself. These have been introduced by the enthusiasts . . . There are fashions which are promoted by good marketing. And I think this has done a great disservice to OD. If you call it SDP or OD, it will tend to be rejected by a lot of managers as a gimmick, when all it is really is just a sensible approach to your job.

Some of their board level supporters were fairly fickle and unpredictable friends. In one case this was because of the personality make up of the director, “He had an intuitive understanding of OD . . . He would listen to them but he was never really in sympathy with them. He distrusted feeling components because he was a very shy, private man.” On other occasions there were intellectual doubts, “OD hadn't been thought through sufficiently. There was a conflict between OD being a kind of group psychotherapy and it being an actual change programme . . . What was missing was proper systems studies . . . so that the hard systems stuff was thought through and then the soft systems, the team building, goes in.” And, of course, there was the normal businessman's impatience with the speed of change using OD people and methods:

I find OD people terribly good at creating an environment conducive to change, and hellish bad at organising the change programme . . . So you get swirling activity consuming immense amounts of time – all very heady – but not making enough actual change progress.

But as with the powerful functions, so also with the board, there was a basic question mark about the legitimacy of internal consultancy help in the people and organisation area:

They were seen by many members of the board as rather amateur shock troops pretending to have skills with people when maybe skills with people were diffused throughout the organisation and couldn't be concentrated in a special unit. So there was a lot of antagonism among my colleagues on the board and they had to be protected.

By the beginning of 1973, with the second organisation study completed and the structural change implemented, protecting the OD unit was beginning to become a thankless and impossible task.

ORGANISATION DEVELOPMENT: THE END

They (PCD managers) weren't in the business of innovation . . . Their notion was minimum disturbance and maximum production. That was heavily ingrained, and where you were having fun on new investment that was a deeply technical matter . . . straight down the line was the PCD culture. After WSA and SDP, they simply blew off the froth – organisation development, and got on with the straight drinking!

The recommendation to disband the OD unit was made in a November 1973 memorandum from a deputy chairman to the PCD board. By then, Ward had left the company, and Brown was about to join him. John Harvey-Jones had arrived on the ICI main board, and Tom James, with Harvey-Jones’s sponsorship, had been appointed as a companywide internal consultant on organisation matters. James returned to PCD in 1976 at the then chairman's request to review the operation of the structure implemented in 1972. No changes followed James's 1976 work. In 1981 James returned again to play a part in the structural and people problems associated with the merging of PCD and Plastics Division.

On the death of the OD unit only one of its members still remained in the division. He was transferred to a Management Training Section which was then renamed management and organisation development section. This unit did some respected work in the training design and community relations area, some of which was picked up by other divisions. The sole transferee from the OD unit also did work at the divisional and company level using OD techniques, and a handful of managers in R&D and Engineering carried on using skills and techniques learnt from Ward and Brown, but essentially OD died in PCD when the OD unit withered away.

OD had been seen as a lever to cause changes desired by its initial sponsor John Harvey-Jones. “It had assisted many powerful people but likewise was resented by others who felt they were disadvantaged or hurt by its activities.” The antecedents and origins of the OD unit were very important both in setting it on a path which focussed primarily on a particular task, and in creating a feeling of ambivalence and disinterest to the behavioural work in the unit. By the time the task was complete nothing had happened to change the top management's initial view that this was a task force. Even the task force idea was forced by Harvey-Jones onto a board full of doubters. A director commented, “Harvey-Jones had to push to get that through. And the rats were really at it from the beginning. . . I think the board, by and large, supported the analysis of their own activity but once that was over, there wasn't much feeling for continuing. It was: O.K., forget about it. . . so it really came and went with John Harvey-Jones . . . With the coming of Harvey-Jones’s successor you had a switch right over from a fairly extrovert guy who was interested in the OD scene, to a man who was authoritarian, and who had been brought up in the old school – a much older man too.”

John Harvey-Jones as the initiator of OD in PCD perhaps deserves the final word in this discussion of its demise. His words acknowledged he also had some learning from the PCD story:

I think PCD organisation development is a sad case, because I really believed that I had started an irreversible force. I knew there would be attempts to halt it, but I really believed it wouldn't be easy to halt it. I was dead wrong – well 80% . . . The concept that I had was to start at the top and work down.

1 This was not literally true. The works managers did physically at least meet at a Works Managers Committee every Monday, but this was not at that time an effective site-wide policy or co-ordinating body.

2 Unlike George Bridge, who in 1967 was still personnel director of Billingham Division.

3 Approximately 3400 people in 1969

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