9

The Top-Down Strategy for Creating Change: Mond Division

Until the merger of Petrochemicals and Plastics Divisions in 1981, Mond Division was the largest of the ICI divisions. In 1980 Mond represented 15–20% of ICI's interests in the UK in terms of capital assets, sales, and number of employees. As well as being large Mond had two other claims to prominence within the ICI group. One was its roots not only in the foundation of ICI in 1926, but before that to Brunner, Mond Ltd and the United Alkali Company. In addition, for most of the 1970s Mond had been second only to Agricultural Division in terms of the size and stability of its profits to the ICI Group. Mond was big, successful, confident and had a concept of self-worth founded not only in its latter-day business results, but also in its place in the history and development of ICI.

The 1980 economic recession badly affected Mond's profitability in the alkali and chlorine and derivatives product areas, and the fall from grace accelerated into 1981 and 1982. Only now (in 1983) is there some evidence of an improving level of business performance in parts of Mond, and this improvement could not have appeared on “the bottom line” without the £40m per annum savings in fixed costs derived from organisation and manpower changes made between 1979 and 1983. The structural changes made between 1979 and 1983 have affected the overall shape of Mond and have permeated to every level and most units. For example, the board of Mond has been reduced to a chairman and four directors, from an early 1979 situation of a chairman, two deputy chairmen, and nine directors. The senior management group of the division in 1979 was 270; by the Summer of 1983 this was down to 160, with the clear policy objective that 125 posts was the senior staff population required to run the business. Looking at the division as a whole, total employees were 15,684 in 1979 and by May 1983 this was down to 10,385 with 9000 as the policy objective by the end of 1984. Of the 5299 employee reduction made between 1979 and May 1983, around 1250 of the 5299 was a product of the transfer of Mond weekly and monthly staff onto the payroll of other ICI divisions. Nevertheless, these are dramatic changes combined as they have been with the reduction in the number of business areas, the appointment of a single general manager responsible for the total aspects of each business, the merging of a number of production works to form larger manufacturing sites, and the merging of some headquarters functional departments.

These changes in manpower and organisation were driven by a chairman and board of Mond who had been uplifted by the business pressures of the day. But in this case it was not just a question of a combination of the business imperative galvanising business purpose and political will to create necessary change, the other part of the jigsaw present in the Mond situation was the guiding influence of an intellectually coherent and well-communicated framework for thinking about the content of the changes, and the fairly broad development in the division of the process capability to make the top-down vision of the future shape of the division a reality rather than just a hope. The evolution of the above framework for change, hereafter referred to as the Mond Management Model, and the political will and process skill to make it happen, can be explained as a result both of the business imperatives of the day, and a long-term process led by a number of senior board members of Mond – with consultancy help, to first open up, and then clarify, the purpose and total business development of Mond in the changing social, economic, and political environment of the 1970s and 1980s.

The unique and eventually critical feature of the Mond OD work, as compared with the other divisions described in this book, was that for a variety of changing motives, and in different ways, it was led always by a small but powerful group on the board. This continuing top-level political support, persistence in using an American external consultant alongside a few internal development resources, and a long-term strategy which explicitly said start at the top and work down, not only helped to link developmental resources in and outside the line to business concerns, but eventually diffused developmental thinking and skills, far enough down into the Mond system to quickly and effectively respond to the business crisis of 1980. The fact that in Mond eventually developmental thinking and action were harnessed effectively, from the board's point of view, to the core business problem of survival does not mean that process was characterised by rational strategic intent, linearity, tidiness, and control. In fact, even with a certain level of top political support, the process of engaging OD to business matters in Mond was faltering, meandering, and haphazard. Some of the reasons for the faltering and meandering character of OD's engagement with Mond relate not just to the inevitable inexperience of those who sought to apply developmental thinking and action in the division, but also to certain core features of the business, organisation, and management culture of the division, which shaped the starting point and context within which developmental thinking had to make a start. It is to those important features of the business history and development, organisation, and management culture of Mond which I now turn.

BUSINESS HISTORY, ORGANISATION, AND MANAGEMENT CULTURE

The origins and development of the Mond Businesses

Mond Division is named after Ludwig Mond, who, in 1873, together with John Brunner, set up the first UK soda ash plant using a technical process developed by the Solvay brothers at Couillet in Belgium. One business and cultural stream running through the development of the compendium of business units eventually created and named in 1964 as Mond Division is the Brunner, Mond company which has manufactured and sold soda ash to the glass and detergent industries from a base in mid-Cheshire in north-west England, since the days of Queen Victoria. It was largely the drive of Sir Alfred Mond, Ludwig's son, and Sir Harry McGowan of Nobel Industries which led in 1926 to Brunner, Mond and Nobel Industries essentially taking over the two weaker companies, the United Alkali Company and the British Dyestuffs Corporation to form ICI. The truth of the takeover, as Reader (1975:3) asserts, was made brutally clear by the composition of the original board of ICI. Sir Alfred Mond was Chairman, McGowan was President, and all six other full-time directors came in equal numbers, from Nobels and Brunner, Mond. The other partners had to be content with part-time representatives.

What had been the Brunner, Mond business interests pre–1926, became known in ICI first as the Alkali Group, and then from 1944, the Alkali Division.

The second business stream flowing into Mond are the business descendants and developments from the United Alkali Company Limited. Predating the technical process for manufacturing soda ash developed by Solvay had been the Leblanc process. In the third quarter of the nineteenth century a sizeable chemical industry had developed around the Leblanc process producing not just sodium sulphate and hydrochloric acid, but also soda ash and eventually chlorine. It was the environmental devastation caused by the Leblanc manufacturers, which was so bad at Widnes even in those days as to stimulate litigation, which partly encouraged Ludwig Mond to bring the relatively cleaner Solvay process into England. By the 1880s the Leblanc manufacturers had all but conceded the UK manufacture of soda ash to Brunner, Mond, and by judicious use of recovery processes and other technical developments had expanded their product range to include soda crystals, caustic soda, and more crucially, chlorine. In 1881 the separate manufacturers in the Leblanc industry formed themselves into the United Alkali Company and tried to fight back in the soda ash business by setting up a new ammonia soda plant at Fleetwood in Lancashire; but in the period up to the creation of ICI the return on capital employed and profits of Brunner, Mond were far in excess of the United Alkali Company (Dick, 1973).

In his useful book A Hundred Years of Alkali in Cheshire Dick (1973:30) argues that the “ill-feeling between Brunner, Mond and the United Alkali company which existed over the years, encouraged, it must be said, by Brunner, Mond's scornful and suspicious attitude towards the United Alkali Company persisted in later generations and was slow to die.” The persistence Dick is referring to, of course, is the tension which continued after the formation of ICI. What had been the United Alkali interests in chlorine, chlorine derivatives, and soda ash became first the United Alkali Group, and then the General Chemicals Division of ICI. The overlap in business interest between Alkali Division and General Chemicals Division was clarified early on in ICI's history by the transfer of electrolytic chlorine and caustic soda manufacture from the Brunner, Mond Group in ICI to the United Alkali Group in exchange for the ammonia soda plant at Fleetwood. This left Alkali Division with complete control over ICI's soda ash business and a monopoly of soda ash manufacture in the UK, but meant that General Chemicals Division consolidated their hold of the more rapidly expanding and developable businesses associated with chlorine and its derivatives.

Alkali Division's gentlemen with a taste for chemistry opened up the possibility of diversification from soda ash when at the Winnington Research Department in 1933 they discovered a “waxy solid found in reaction tube” which became generally known as the plastic polythene, but which was sold by ICI under the trade name “Alkathene”, to celebrate its discovery in Alkali Division. Alkali Division's inherited prestige from Brunner, Mond was now consolidated by this important discovery, and by 1939 soda ash manufacture in mid-Cheshire was now complemented by the full-scale production of polythene. Even after the creation of Plastics Division, Alkali Division was able to ensure they remained responsible for the production, fundamental research, pricing, and licensing agreements associated with polythene's development. A 1943 agreement merely gave Plastics Division responsibility for sales, technical service and development of “Alkathene”. Just after the 1939–45 war and into the early 1950s Alkali Division's standing in the ICI Group probably peaked. Reader (1975:309) is able to show that not only did a larger proportion of the younger men coming onto the ICI Board post-1940 have scientific and technical backgrounds rather than commercial skill and experience, but a disproportionate number of the new main board directors came from the Alkali Division board at Winnington.

By 1952 Reader (1975:499) indicates the joint activities of the linked businesses then separately organised as Alkali, General Chemicals, Lime, and Salt Divisions employed assets of £89m and produced external sales of £50m with a trading profit of £9.23m. Billingham Division, the biggest single division in 1952, employed capital of £65.5m, had external sales of £60m, and generated a trading profit of £8m. A further indicator of the relative size, prestige, and business development of the UK divisions was the capital expenditure over the period 1937–52. In that period Alkali Division was third behind Dyestuffs and Billingham, and with £21m as a total for the period, only £lm ahead of General Chemicals. Lime Division and Salt without heavy capital requirements, being more concerned with extraction rather than manufacturing, spent respectively only £2.2m and £1.6m over the whole period 1937–52.

As we have seen elsewhere in this book the 1950s witnessed a surge of research, and process and product development activity, in ICI's Fibres, Plastics, and Heavy Organic Chemicals business areas. General Chemicals also continued to grow, partly because of demand for caustic soda, chlorine, and solvents from UK manufacturing industry, but also because of product linkages with other ICI divisions.

Meanwhile Alkali Division received the first of a series of blows to its identity and pride when in 1957 the main board of ICI decided to transfer complete responsibility for polythene and all the people working on it from Alkali to Plastics Division. Dick (1973) reports that the main board decision to remove polythene from Alkali was received at Winnington with “bitterness and distress”. Worse was to come. By 1959 it was clear that neither Lime nor Salt Divisions were likely to be able to grow or diversify to a level which would justify the fixed costs of separate status, and in 1960, Lime Division, and in 1961 Salt Division, were merged with the Alkali Division. Alkali Division knew now that the process which had started in 1957 could only end in one outcome. In 1963 the announcement was made by the main board that Alkali Division and General Chemicals Division were, from 1 January 1964, to be merged in a single unit, to be known as Mond Division.

In business and technical terms what had been happening throughout the 1950s was a soaring increase for General Chemicals Division's chlorine for products such as PVC and chlorinated solvents, and for products which required chlorine as an intermediary in their production such as ethylene glycol and propylene oxide. However, co-produced with chlorine through the electrolysis of brine was caustic soda at a level and a cost structure with which the lime-soda caustic made at Winnington could not compete. As a result General Chemicals Division took over increasing proportions of ICI's caustic soda production, and Alkali Division was left again to major in soda ash. Given the continuing business overlap between the two divisions, their reliance on similar raw materials and energy sources, the geographical closeness of the headquarters of the two units, and their associated manufacturing plants – most of which were concentrated in Cheshire and Lancashire, and the fact that the bad business results of 1958 and 1961 meant the ICI main board were hunting overhead – all made the four into one merger a sound business move. How the 1964 merger was handled, and its impact on the developing organisation and management culture in Mond Division, will form the theme of the next section of this chapter. For the present, perhaps a quote from Dick's book (1973:59), himself an ex-Alkali man will reveal something of what was to happen as Alkali was taken over rather than merged with General Chemicals:

There was a very marked difference between the management styles of General Chemicals and Alkali. The analysis of this would be a complex and delicate task. Perhaps it can be summed up by saying that while over the years the climate at Winnington had tended towards a laissez-faire paternalism, that in General Chemicals Division was more authoritarian.

The newly created Mond Division started with a board of 20 Directors and 20,000 employees. Great energy had been and continued to be absorbed in what was seen to be vitally necessary re-structuring, and for a time in the 1960s “business evolution almost took second place to structural evolution”. The headquarters of the new division was the recently built headquarters for the old General Chemicals Division at Runcorn. The division was organised into five product groups. The biggest of these, the Chlor-Alkali Group, was made responsible for the production and sales of all soda ash products, as well as of chlorine and electrolytic caustic soda. The second product group concerned themselves with chlorine derivatives such as chlorinated solvents and monomers, and chlorinated compounds for the plastics industry. The third product group looked after the fluorinated products which eventually developed into the valuable general chemicals product range used as refrigerants, aerosol propel-lants, dry cleaning solvents, anaesthetics, and fire-fighting agents. The final two product groups were the Salt Group and the Lime and Limestone Group. Apart from the merging of the Lime and Salt Product Groups into one group no significant changes occurred in this product group system until 1979.

On the production side the division had, and still has two centres of gravity. The manufacture of soda ash and related products at the mid-Cheshire Works – Winnington, Wallerscote, and Lostock. The other, and numerically larger, focus of manufacture are the production works around Runcorn and Widnes which produce chlorine and chlorine derivatives, and general chemicals. These works are Castner-Kellner, Rocksavage, Weston Point and Widnes Works. In addition to these two major sites, Mond also has production interests at Fleetwood – Hillhouse Works – and until recendy had production works on both the Billingham and Wilton sites. Meanwhile rock salt is mined at Britain's only salt mine in Winsford, Cheshire, and limestone is quarried at Buxton in Derbyshire.

During the 1960s Mond joined in the general ICI race to develop and build new plant and processes and to close down or upgrade some of their existing plant. Runcorn in particular was a continuous construction site for much of the 1960s as Mond changed its feedstocks and the nature and scale of their plants in order to improve the output and operating efficiency of plants pouring chemicals into the expanding markets for chlorine, chlorine derivatives, and general chemicals. Plants were also developed at Hillhouse and in the northeast of England, but for reasons we will shortly explore, the assets in mid– Cheshire were relatively speaking neglected. However, for the engineers of the old General Chemicals Division known widely in ICI as the Engineers Division, life at Runcorn was all technological change and development.

ICI do not publish figures for the business performance of their UK divisions – what they have done since 1973 is to publish figures on a worldwide basis for each of their classes of businesses. Mond Division's performance is tied up in the set of figures ICI publish under the label General Chemicals. Taking 1974 as a benchmark, when in fact ICI did extremely well as a group, will allow us to explore something of the relative positioning of the General Chemicals businesses in ICI that year, and to estimate the business structure and performance of Mond early in the 1970s.

General Chemicals contributed just under 15% of group trading profits in 1974, making it the fourth-largest business area in profits terms after Agriculture, Petrochemicals, and Plastics. ICI's sales of General Chemicals in 1974 totalled £465m (including inter-class sales). Of these £322m (69%) were generated by UK investments and the remaining £143m arose from overseas activities centred mainly in Australia and Canada. In 1974 approximately 75% of total group investment in General Chemicals was located in the UK. That 75% really represents Mond Division, which covers the majority of General Chemicals in the UK.

Of UK sales of £322m in 1974, some 50% were to external customers, 25% were exports – mainly soda ash, caustic soda, and high-added-value air conditioners and solvents, and the remaining 25% were to other divisions within the ICI group, over half of which went to Plastics Division.

TABLE 26 UK General Chemical sales (£m) estimated, 1974 and 1975

 

 

1974

1975

Chlor-Alkali Chemicals

140

43%

145

40%

General Chemicals

108

33%

135

37%

Solvents and Monomers

  55

17%

  65

18%

Lime

  12

  4%

  10

  3%

Salt

    7

  3%

    5

  2%

322

100%

360

100%

Fielding, Newson-Smith and Co., a City of London stockbroking firm estimated in a 1976 publication on ICI that ICI's general chemical business sales in the UK could be assessed in terms of Mond Division's business areas, as shown in Table 26.

Taken together these figures reveal something of the strengths and weaknesses of Mond's competitive position by the mid-1970s. Its strengths were both product diversity in general and the marketing of products across a range from low value commodity chemicals to high-added-value specialty chemicals. It had modern up-to-date plant located close to controlled raw materials sources in the faster-growing general chemicals and chlorine–chlorine derivative areas. It was the UK's major producer of chlorine and caustic soda, and the sole UK producer of soda ash. It had, however, one major strategic weakness in the early 1970s, and a variety of others which escalated in importance as energy costs, currency changes, and over-capacity in commodity chemicals loomed larger by the end of the 1970s.

Mond’s major strategic weakness was and still is its heavy sales and manufacturing weighting in the UK. Even by 1979 , and with a conscious strategic thrust of some years standing by the Mond board towards continental Western European and North American markets, about 70% of Mond's external sales were to UK customers. ICI's attempt in 1978 to buy into North American chlor-alkali and VCM markets by acquiring assets over there at Baton Rouge, Louisiana, quickly turned out to be a poor business decision, and by 1980 their Baton Rouge assets had been sold off to the Formosa Plastics Corporation. However, Mond's concentrated attempt to build up assets and market penetration was in Continental Western Europe. The public view in Mond Division at the moment is that the so-called Tripod Project conceived in the mid-1970s to link Mond with Wilton and a new chemical complex at Wilhelmshaven in West Germany, was strategically right but tactically unfortunate. The Wilhelmshaven facility, part of which is now on stream, will manufacture vinyl chloride and PVC with the chlorine feedstock coming from a plant which ICI acquired from Alusuisse in 1978. With plant occupancy of only around 50–55% the Wilhelmshaven complex, far from being Mond's future, appears in the short and medium term to be an additional drain on its cash flow and profitability.

However, the falling away of growth rates and over-capacities in the Western European commodity chemicals markets, and the consequent squeezing of margins, was not part of the conventional thinking of either the ICI Group or Mond Division as Mond began to peak in terms of business performance in 1976 and 1977. A combination of a weak pound sterling which allowed profitable exporting, the recovery of volumes in soda ash after the 1974/75 dip in output, UK price control legislation which paradoxically allowed regular inflation-based price rises, near-monopoly position in some products and markets which also contributed to healthy margins, all meant that for a time Mond “was minting money”. Table 27 shows the sales, trading profit, and ratio of trading profit to sales for ICI's worldwide General Chemical businesses for the period 1973–83.

Mindful again that these are all worldwide rather than just Mond Division figures, it is still possible to interpret trends in Mond's business performance. 1976–79 were good years in terms of profit, with the division actually peaking in terms of trading profit and the ratio of trading profit to sales in 1976 and 1977. Mond was probably making a profit of around £130m in 1976 and 1977; inflation-adjusted at 1982 prices that would represent around £300m. However, as with so many businesses at that time Mond were really making spurious profits. The numbers were going up but all on the back of inflation. Mond was essentially trying to maintain its business position by raising prices. In this era of spurious growth the main board of ICI agreed to go ahead with the Tripod project based on growth rates of 6–8% per annum. Apparently there was a debate as part of Id's international strategic thrust as to whether to put a chunk of the cash being earned in the ICI Group in the mid-1970s either into North America or Continental Western Europe. The choice was posed in terms of Petrochemicals at Corpus Christi in Texas, or General Chemicals at Wilhelmshaven in Germany. The trade-off was that both investments were made and ICI is now the owner of still more capital assets it cannot profitably use. As one of the Mond Directors put it to me, “one or two people did see the changes in the environment (the falling away of growth rates) but generally it was beyond man's experience to see that as a possibility at that time”.

TABLE 27 ICI General Chemicals worldwide sales, trading profit, and ratio of trading profit to sales, 1973–83 (£m)

 

Sales

Trading profit

Ratio of trading profit to sales

1973

  353

  58

16.4

1974

  465

  66

14.2

1975

  551

  71

12.9

1976

  738

136

18.4

1977

  858

146

17.0

1978

  895

128

14.3

1979

1038

141

13.6

1980

1143

  99

  8.7

1981

1232

  75

  6.1

1982

1386

  60

  4.3

1983

1472

107

  7.3

Table 27 shows the sharp overall decline in ICI's worldwide General Chemical businesses in 1980, 1981, and 1982, but it conceals the extent of Mond's weakening business performance. A senior Mond Director put the business change like this:

In 1980 we were thumped between the eyes by a combination of general economic recession, overvalued sterling, excessive advances in UK energy costs relative to Continental Western Europe and elsewhere . . . It was a most terrible fall from grace, accentuated by the fact that our strategic investment thrust at Wilhelmshaven, while right from an overall strategic point of view caught the full impact of being barely off the ground when the recession arrived – that added to the problems of profitability and cash flow.

Mond had in fact, budgeted for a divisional profit of £120m in 1980 but Table 27 shows the worldwide realised figure for General Chemicals was only £99m. Mond revised their budget for 1981 for a profit of £40m but it is doubtful if the division did all that much better than break even for 1981 and 1982, and that could not have happened without the “draconian changes” already referred to which had produced £40m annual savings in fixed costs by 1982.

The 1980 economic recession revealed Mond's competitive weaknesses all too clearly. Its business performance was still too tied to the fortunes of the UK economy. As large parts of UK manufacturing industry either fell by the wayside altogether, or in the case, for example, of UK glass manufacturers, lost significant market share to Continental Western European competitors, so the demand for Mond's solvents and soda ash declined. Between 1980 and 1983 Mond lost 30% of their invoicing points in the UK Engineering industry as firms in the “metal bashing” industries went into decline or out of business. The high value of sterling considerably weakened Mond's increasing attempts to get into European markets, and overcapacity in European markets, especially for vinyl chloride, but also for some solvents, meant that margins decreased dramatically. The threat of natural ash from the United States which had been a prospect for the latter part of the 1970s, and had curtailed Mond's capacity to raise prices, now became a reality, and pressure from US imports plus falling UK demand meant that the mid-Cheshire soda ash businesses became unprofitable. On top of all these worsening trends, Mond also had the continuing problem that their production processes were highly energy-intensive, and the prices they had to pay in the UK for electricity were twice the bulk tariffs available to their European competitors.

Many of the above macro-trends were not under Mond's control, and few could be influenced in the short term. The problem of European over-capacity in some commodity chemicals certainly couldn't be solved by unilateral action by one company, although the swop deal made with BP Chemicals in June 1982, helped to reduce the over-capacity problem for vinyl chloride in the UK. Pressure on the EEC about the so-called dumping of natural ash in Europe by the United States led in 1982 to the imposition of anti-dumping duties and the obtaining of undertakings on price levels from importers. This helped to take some of the pressure off Mond's soda ash business, but there was no relief from the Thatcher government on the vexed question of their high-cost energy policy and its impact on Mond's chlorine and soda ash businesses.

Apart from hoping for a reduction in the value of sterling – which eventually came, keeping up the pressure on government to bring UK energy costs down to other European levels, and redoubling their marketing emphasis outside the UK, the Mond board, as I have already indicated, took control of the division's fixed costs, an area which at last became a priority, and where they felt capable of taking effective action. The theme became “make sure you survive by ensuring your relative competitive position is better than your competitors”. This new strategic priority became the focal point which finally engaged Mond's developmental resources from the top to the bottom of the division, and produced a new pattern of organisation, and perhaps the emergence of a different organisational culture in Mond.

Organisation and management culture in Mond

When Mond Division was created in 1964, it was not just a question of putting together two sets of businesses, and two organisations; the enforced wedlock between Alkali Division and General Chemicals Division was the linking of two quite different organisational cultures. For the moment I shall dwell on the differences in management culture between Alkali and General Chemicals, but as we shall see the differences in shop floor culture between mid-Cheshire and Merseyside were as distinct as those already reported between Billingham and Wilton.

From the account of the history of the Mond Division businesses in the previous section, it will be clear that the Alkali Division was the direct descendant of the Brunner, Mond Company, and indeed of two of the founders of the British Chemical Industry, John Brunner and Ludwig Mond. As such, Alkali Division inherited the Brunner, Mond tradition under ICI, with all that meant in terms of paternalistic labour policies and the gifted superiority of the Winnington management ethos. Winnington's progressive labour policies and practices and strong sense of community and self-respect brought on it jibes such as the nineteenth-century taunt “White Slaves of Winnington”, and the shafts launched more recently towards the management culture as the “Squires of Winnington Hall”. Set against that General Chemical could only claim the much weaker business lineage, lower prestige, and indistinct traditions of the United Alkali Company.

The part played by the Winnington Hall Club had an “inestimable effect on the style of management developed by Brunner, Mond and then by the Alkali Division,” (Dick, 1973:108). Formed in 1897 “the Hall Club” was both a residence for the bachelor senior managers of Brunner, Mond, and an elegant dining room and social centre where the largely Oxbridge-trained chemists who joined Alkali could mix informally and play bridge, billiards, or croquet. Membership was at the invitation of the directors and was a carefully guarded privilege extended only to the few. Membership was determined by professional background, social qualifications, and standing in the company. Oxbridge-trained chemists were welcomed along with a few lawyers and accountants, but the uncertain status of engineers and commercial men in the first 20 years or so of the twentieth century in Britain meant they were excluded. Even by the time of the Mond merger in 1964 only 600 of the 6900 monthly staff in the new division were members of the Winnington Hall Club. The social homogeneity of the Hall Club, certainly in its pre-1939 days, was based on a combination of technical academic background, Oxbridge training, and public school personal background. In this atmosphere of shared assumptions and mutual trust much reminiscent, as Reader (1975:71) suggests, of an officers’ mess or an Oxford college, “the hard cutting edge of professional efficiency was always present but never indelicately exposed”. Rank and position in the Alkali hierarchy were accepted as part of the natural order of things but not dwelt upon in the club atmosphere at Winnington, where there was a frank and easy atmosphere between different levels and functions which was quite absent in the rank-conscious, authoritarian, and some have said repressive atmosphere in General Chemicals.

It is worth remembering that the Winnington culture was nourished in an organisation which was in a monopoly situation as far as its main product of soda ash was concerned, and where there was very little change in the technical environment of the division. Soda ash was produced in the 1960s by a manufacturing process very similar to the process being used in 1926 when ICI was formed. In this controlled business and technical environment the Winnington chemists had the freedom, space, and ability in the 1930s to discover polythene. This, of course, added to Alkali Division's strong sense of identity and self-worth, especially when, as we have already noted, a procession of Alkali directors were promoted onto the main board of ICI between 1940 and 1950. As Dick (1973:112) remarked, “this did not go unobserved by other divisions of ICI, although Winnington did not advertise its merits; it merely was convinced of them”.

It was, of course, Alkali's explicit and implicit claims to superiority which grated hardest on their near-neighbours in business and geographical terms, General Chemicals Division. Reflecting on the period in the late 1950s and early 1960s before Mond was created, senior people in Mond Division, then part of General Chemicals, recalled Alkali in these kinds of terms:

Alkali were living in the shadow of past glories. They had been the strongest original constituent of ICI but in the period up to 1964 they had been living through a period of steady decline, though I doubt if they fully appreciated that fact. They regarded themselves and their business as immortal, and of a very high order.

image

Alkali Division were always the gentlemen of ICI. They wined and dined at Winnington Hall Club. They did a little work but normally arranged for others to do work for them . . . General Chemicals people referred to Alkali as 9–1 management, start at 9 and finish at 1 . . . Works managers used to shoot quail over the lime beds in the afternoon. They would keep their dogs panting under their desks, and then take the dog for a walk around the works. When television arrived some kept them in their office to watch the afternoon horse racing. It was a place of style and panache based on a background of very attractive earning capacity and no hint of failure in even the darkest years. It was full of remarkable people, who did extraordinary things. Eccentrics had to stay because they were afraid to let out the technical secrets of the soda ash process – a quite remarkable place.

A chemical engineer who eventually joined General Chemicals described his interview with Alkali in the early 1960s in these terms:

They didn't know what a chemical engineer was. I was one of the few they interviewed who didn't come from Oxbridge. They tried to find out if I was a chemist or an engineer, and concluded I wasn't either. The whole atmosphere was, are you a gendeman or not? I felt technically I didn't have what they required. The Personnel guy asked me if I would be prepared to help run the scout troop that Alkali sponsored. I said yes. I'm absolutely sure that's why they offered me a job.

Ex-Alkali managers acknowledged “the semi-humorous, semi-envious, cynical views of us from the rest of ICI – arriving at a training course for managers, when it became apparent I was from Alkali the remark was made ‘you’re from Alkali, should I carry your bags for you’? In the late 1950s Alkali were still very selective in recruitment. They kept numbers in the works as slim as possible, with few levels of management and wide spans of control. In the still relatively homogeneous management culture of Alkali, the pattern of shared values and easy relationships in the division, regenerated by appropriate recruits meant that managers could be given a lot of space, you were given your head, and not closely supervised.”

The above laissez-faire culture within the management group was complemented by the Brunner, Mond tradition operating at lower levels in the system. In the works the foremen were key carriers of the tradition, and before the development of shop steward power in the late 1960s the foremen were the critical link between the management culture and the shop floor. The young officer managers needed the cultural knowledge and tactical skills of the foremen non-commissioned officers.

Looked at from either their headquarters in the centre of Liverpool, or their focal point for manufacture at Runcorn–Widnes, it was no wonder General Chemicals were labelled, or assumed the status of, “the cloth cap brigade”. General Chemicals had grown rapidly after the 1950s on the back of process and product developments made in the chlorine and chlorine derivatives areas. The emphasis in General Chemicals was on the design and development, and operating efficiency, of new plant to meet rising UK demand for chlorine. The division recruited the best chemical and mechanical engineers it could get, and it quickly acquired the ethos in ICI as the Engineers Division. As one General Chemicals recruit put it:

General Chemicals was technically very strong. We always attracted first class chemical engineers. There was very little attention to social or organisational development. The belief was that technical factors were the key to everything. There was very little concern with marketing. The products sold themselves either because they were strong technically or because we could make them cheaper than anybody else (in the UK).

Even the General Chemicals managers acknowledged the authoritarian and instrumental management culture in their division:

It was a tough, no-nonsense, sane, straightforward, whack them harder operation. There was a constant flow of new technology, the scenery was always changing, history doesn't matter too much.

Alkali managers naturally preferred their own laissez-faire, “give him his head approach” to the General Chemicals attitude where:

Everyone was assumed to be a skiving so and so, therefore you had to screw him down, supervise him closely, otherwise he'll do you down. This attitude and behaviour of close supervision, complex reporting relationships, close monitoring applied from top to the bottom of the management hierarchy in General Chemicals.

These mutual stereotypes were, of course, reinforced by the shotgun marriage which created Mond Division, and the obvious fact that General Chemicals were not merged with, but rather took over, Alkali Division. The take-over was symbolised by the fact that the first chairman of Mond had been Chairman of General Chemicals since 1961, and even more tangibly by the placement of the new headquarters of Mond at the recendy created General Chemicals head office at Runcorn Heath. A manager in General Chemicals, later to become a senior member of the Mond board, recalled the takeover of Alkali Division:

One saw the gradual but steady elimination of the ex Alkali Directors and of the ex Alkali influence. In business terms the manufacture of soda ash has suffered because of market considerations a gradual decline. Its status today in Mond in 1983, is one of four business groups, and by no means one of the biggest. Northwich is now just a couple of operating plants – a dramatic change.

Another senior member of the present Mond board described the differences between Alkali and General Chemicals, and the eventual decline of Alkali in these terms:

They were two different worlds. If they had a bad egg in Alkali and he was shifted over to General Chemicals it was said at the time of the merger, it would improve the tone of both Divisions. I found Alkali extremely wedded in the past, they knew everything . . . From a market point of view it was a monopoly and yet the lowest priced soda ash in the world. The thinking was if we make excess profits we'll get caught up by the Labour Government. Cash flow was good but profit was nowhere near what it should have been. Before 1973 we were selling soda ash at £19.50 a ton when the German price was £27 a ton. The customer's perception was that the Alkali part of Mond got no credit for this. “Here is your quota – this is the price, still sticks with the customers . . .” Alkali were under threat by the growth of chlorine demand and by the increase of chlorine–caustic soda relative to the lime-caustic soda at Winnington. The 2 divisions were put together in order to manage the reduction of lime-caustic soda at Winnington. Alkali saw the merger as a terribly traumatic experience. General Chemicals were dominant. If you look at the directors who went between 1964 and 1966 they were from the Alkali side. That period is still referred to “as the night of the long-knives”.

If General Chemicals directors very quickly dominated the Mond board, it was technical and production people also from General Chemicals who dominated the works at Runcorn and mid-Cheshire. The General Chemicals people who moved into mid-Cheshire to manage the old soda ash plants were horrified at what they saw:

This side had seen plants go up and become obsolete in 10 years, the soda ash end was like the British Empire – the sun will never set on soda ash. They were very resistant to change. If you made any suggestions for change you got the response that was tried 50 years ago and didn't work . . . Their willingness to see change, apply standards horrified me – their plants were shambolic.

An ex-Alkali manager noted how there had been “real acrimony at the top of the two merged divisions – tremendous wasted energy, no real effort at integration beyond structural integration”.

They tended to look at our plants in mid-Cheshire as “heaps of scrap iron”, no-one worth his salt would want to work in those plants. So no young people in Mond wanted to work in mid-Cheshire, this wasn't the place of the future, so for a time this area was denuded of good people.

Very occasionally a senior production man from mid-Cheshire would be promoted into the Runcorn–Widnes complex. Although managers who went in both directions both had difficulties understanding one another's technology and culture, the attempt on one occasion to introduce Alkali management structures, style, and culture into the Runcorn–Widnes complex proved a major and expensive failure, and further reduced the credibility of the Alkali management system.

Slowly some of the productivity objectives that had been part of merger aims were realised. The Mond board declined in size from 20 in 1964 to 14 in 1968, and total employees declined from 20,044 in 1964 to 17,799 by 1970. What didn't change, however, was the great concern with technology. The chairman of the late 1960s, two of his deputies, and seven or eight of the remaining members of the board were either scientists or engineers. Plant was being designed and commissioned at Runcorn, Hillhouse, and Widnes almost with the fervour and scale of Wilton in the mid-1960s. Mond thought of technology and production as first priorities, and far down the list was the concern for the market.

Marketing was sales control literally, we told the customer how much he could have and how much he would have to pay for the privilege of having the product. The customer orientation just wasn't there, money was too easy to make.

The division was “stuffed up to the eyebrows with technical people, all of them high quality, and a lot of them generating work for each other”. Get yourself down to the works, and then into plant design was the career path for the young graduate who wanted to move fast in a growing business. “Keep the ship going, we want all the production you can make, costs aren't all that important” was the ethos. In the plants the concept of a good manager was very much presenting and dealing with technical problems – “my job was 80–90% technical, people were not a bother – I didn't know what a shop steward was in the late 1960s, he wasn't an important figure in my world”.

Alongside this technical ethos, the developing Mond culture also reinforced two of the less attractive features of the old General Chemicals way of life – the concern with hierarchy, and the concern with control. The Chairman of Mond in the late 1960s is said to have been “a believer in management by fear”; even without his personal influence, however, the Mond culture at that time was featured by “bureaucracy attention to detail – everything was systematised”.

Mond was very tightly managed, plant managers couldn't see the plant costs, only section managers could see those. Even section managers couldn't send a letter to divisional headquarters without his works manager counter-signing it – there was great formality. I found it a very repressive environment and so did my seniors. This repressiveness started at the very top.

It was Mond's developed sense of hierarchy and the distancing between levels which this created which was the central force in the way it operated. Talking of the late 1960s and early 1970s a then senior manager summarized the core of the culture by saying:

Mond is hierarchical, the best thing you can do is profess the faith in front of your betters.

Given the authoritative, some would say authoritarian, and certainly hierarchically conscious management culture at Mond Division in the early 1970s, it would seem the only way developmental resources could be influential in that culture would be if they either engaged with the very top of the organisation, or if indeed the top became itself the pressure point for change. In what follows I shall briefly sketch in the overall pattern of evolution of development work in Mond, before the chapter proceeds to chronicle in more detail the what, the why, and the how of changes in the division over the period from the late 1960s until the early 1980s.

MOND DIVISION'S USE OF DEVELOPMENT RESOURCES: AN OVERVIEW

As in other divisions of ICI, OD thinking and methods were brought into Mond with the Millbank-driven change programmes MUPS/WSA and SDP. Like the other divisions there was an attempt in Mond to keep the momentum for change going, post-WSA and SDP, by using a group of Eastbourne-trained “change agents” or internal OD consultants. For reasons to be explored later these change agents in Mond by and large were deemed ineffective helpers by the Mond power system, and the group was quickly allowed to wither away, although one or two individuals continue to this day to work within particular production environments. There was never any real pretence in Mond that third-party helpers using behavioural concepts and methods would have either the personal standing or positional power to operate within a management culture where hierarchical position was undisguisedly the only practicable basis for action.

The vacuum created by the early recognition of the impotence of internal OD resources on their own as a basis for either strategising about or acting in the organisational change area, was initially filled in a sporadic and unco-ordinated fashion by a small number of works managers each in their own way trying to wrestle with a divided and socially not very skillful management team desperately trying to cope with an increasingly questioning and militant set of works shop stewards and employees. One of these works managers, Frank Bay had been involved in the manning studies leading up to MUPS. Bay and Tom Peters had been works managers at Mond's Hillhouse Works near Fleetwood when Hillhouse was more or less successfully used as a MUPS trial site. Bay later went on to become Personnel Director, and Chairman of Mond in the late 1970s. Bay and Peters were followed as works manager at Hillhouse by a shrewd and voluble Welshman, Dylan Jones, who brought the structured problem-solving technique Coverdale into Hillhouse Works and helped to diffuse Coverdale into other parts of the division. Jones eventually succeeded Bay as personnel director when Bay was promoted to deputy chairman. In 1976 Jones was succeeded as personnel director by Nicholas Mann. Mann's role as a persistent counsellor, catalyst, and intellectual and process leader for OD in Mond was critical from 1976 onwards. In addition from about 1973 Mann had used his personnel manager role to assist the division's works managers to coalesce around some key industrial relations problems. Jones in time went on to become one of the two business directors in the five-man Mond board of the early 1980s. The experience, perspective, and continuity at the top by Bay, Jones, and Mann during several periods when developmental thinking and methods were under severe questioning, both on the Mond board and in the senior management, helped to keep OD alive in Mond until it could at last be harnessed to a core business problem for the division.

Around 1972 there was the beginnings of a dawning of awareness amongst a few senior individuals in Mond that the singular pursuit of technological priorities which had successfully carried Mond in business and management terms through the relatively easy commercial and industrial relations environment of the 1960s, was no longer in itself an ethos to help carry Mond through the different business, social, and political environment of the 1970s. Mond needed to learn how to market its goods internationally and reduce its dependence on UK customers, to develop in its managers not only greater commercial acumen but also the confidence and ability to tackle social and organisational problems through methods often alien to those fascinated by and locked into technical problem-solving processes. It also had in the short term to learn how to prevent, and tactically manage some of the industrial relations fires burning with increasing frequency and effect in some of their key plants. All this had to be done, of course, without denuding the division's more traditional and tried skills as designers, commissioners, and operators of large capital– intensive plant.

Amongst the many things getting in the way of picking up some of the above problems was the organisation and culture of the division. Mond was complex both in terms of its range of products, its number and spread of works, and the cultural differences still present between the factory and management cultures of mid-Cheshire and Merseyside. Crucially it was run in a very hierarchical fashion by an executive committee of the Chairman and his three deputy chairmen. As we shall see, the board was confused about its role, purpose, and practical operating style. Like the Plastics Division board of the 1970s, the Mond board for at least half of the 1970s met as a collection of individuals, and worse still related to the rest of the division as a set of individuals. A still divided and increasingly pressurised set of works managers below the board looked in vain for a unified and consistent set of policies from the board to help them deal with the social and political pressures of the day.

The spark who provided a starting platform to begin to understand and tackle some of the above problems was the then deputy chairman of Mond, Tony Woodburn. Woodburn had been a director of Agricultural Division at the time of George Bridge's social innovations at Billingham, had been the technical deputy chairman of Mond, was chairman of Mond from Spring 1973 until Spring 1977, and as we shall see in the following chapter, then joined the ICI main board and continued to use OD methods to help change the structure and style of the ICI Group.

Woodburn had joined George Bridge on one of his fact-finding visits to see OD ideas being applied in a number of big US corporations. They had both been impressed by the work carried out in a number of Procter and Gamble plants by, amongst others, an American OD consultant called Tom Bainton. Woodburn and Bainton struck up a strong work and in time personal relationship, and early in 1973 just before Woodburn became chairman of Mond, Bainton was invited to spend three days in London with Woodburn, Bay, and the other deputy chairman examining the working relationships within the Mond board. This was the starting point for what eventually became an articulated strategy to link first Bainton, and then his partner Bernard Wilson, into a small group on the board to help crystallise board thinking and eventually action, on changing the business focus, organisation, systems, and management processes in Mond. A critical feature of this developmental strategy, and one which of course matched the hierarchical character of the Mond culture, was that change had to start at the top, and proceed from there down. The process of creating, modifying, and implementing this developmental approach was long, faltering, and meandering. Its chances of success were materially enhanced in Mond by continuity of personalities and perspective amongst always a small group on the board who, using different change targets and methods, kept the process alive. The Mond story, of top–down change, is different from the other example of top-down change in this book, Petrochemicals Division, where there was no continuity of developmental thinking at the top once Harvey-Jones had left the division to join the main board.

While Woodburn was trying to use open-systems planning and team–building techniques both to get the Mond board to consider its business, social, and political environment, and work on improving its internal processes, events were stirring down in the division. By 1974 a combination of a politically better-organised local trade union system using their new power with greater impact, a still divided group of “cruiser captain” works managers feeling they were being picked off one by one in industrial disputes, and a feeling amongst the works managers that they were receiving only capricious demands and no practical support from the Mond board, led to open pressure on the board for policy support and a closer working relationship. This pressure was labelled at the time “the works managers revolt”.

If Tony Woodburn was the man who led moves to change the character and operation of the Mond board, the individuals who eventually emerged amongst the works managers and in the Personnel Department to encourage greater formal and informal coherence amongst the works managers, and to challenge the board to engage more effectively with senior production people were Sandy Marshall and Nicholas Mann. Marshall's lead position in the newly effective works managers group, his history of encouraging the use of Coverdale and other human relations techniques in Wallerscote and Lostock Works, and his developing association with Bernard Wilson, the American consultant, all contributed to Marshall being encouraged out of a line job in 1975 to become the central internal development resource in Mond.

Marshall, conscious of the importance of hierarchical symbolism in Mond, set himself up in an office in what had been the old Alkali directors corridor at Brunner House. He was also careful to avoid being associated with the division personnel function which, with the notable individual exception of Nicholas Mann, had kept distant from any of the emerging development work in the division so far, or the rump of the Eastbourne-trained change agents who, still being unsure how they could relate to the division, sought unsuccessfully to co-opt Marshall into their group, on what Marshall perceived to be their terms.

Seeing the works manager group apparently increasing in coherence, strength, and influence, the managers of the headquarters departments began to meet with the American consultants. This period, around 1974 and 1975, produced sets of guidelines for what were perceived to be some of the problems of the day, which were variously labelled Industrial Relations Principles, Employee Relations Principles, and then from the managers of headquarters departments, Business Operating Principles.

Of course, not much happened as a result of these principles, partly because the board were still wrestling with questions that not all of them felt were worth asking, such as did the board have a role, and if so what should it be? In the business environment of the mid-1970s when Mond was turning in large profits just by regularly raising prices, only Woodburn, Bay, and Dylan Jones were really committed to thinking through issues about the purpose and governance system of the division. Many of the other directors were becoming increasingly impatient with the “love-ins” and “Pacific English” which were a feature of contact between the two American consultants and the board.

With energy draining away from development work on the board, and a certain cynicism and disillusionment at the levels below the board, pardy from the board's inertia, and partly because the wordy principles that were produced delivered very little, Woodburn, Bay, Jones, Mann, the American consultants, and Marshall agreed that the time was ripe to experiment with some developmental projects in the division. Of the three areas chosen to pilot more participative ways of working using the American consultant's problem-solving process called “open systems planning”, the most important was the commissioning of a new plant at Lostock Works. The Lostock experiment, leading as it did to virtually joint decision-making between management and shop stewards, was a good deal more risk-taking than anything tried up at Billingham, but in spite of some major issues of learning for the division this project raised and dashed a lot of hopes. Nothing like Lostock has been tried in Mond since the process of working there was abandoned after a 1978 strike.

Picking up the theme of the board's developmental process, this changed in character when Woodburn left the division in 1977. Woodburn, before he left, was careful to hold a workshop at Stratford-upon-Avon to try and draw some of the threads together after four years’ work, and to help his successor Frank Bay maintain continuity for the work that had been going on. Bay was, of course by now personally committed to keeping developmental activities going, and he was being supported by a deputy chairman, Dylan Jones, and Mann, but there was still not a satisfactory answer to the sceptics for questions about what is the purpose of this development work, where is it leading us, and why? Mond was still highly profitable, and there was no real pressure for organisational change which would require changes in the strategy, structure, and systems of the whole division. Nevertheless Bay persisted. He had been impatient with the conceptual emphasis given to development work under Woodburn and Bainton's influence and wanted to tie things down more and point to specific areas of progress and action.

One manifestation of Bay's urge to cohere around work done so far, and to signal to the rest of the division that the board was looking to the future, was the publication in August 1977 of the Mond Charter. This four-page document presented the board's thinking on the purpose, aims, and principles of the division – the sort of organisation that the board wants Mond to be. The Mond Charter, and the more detailed board handbook which followed it, may have helped to reaffirm within the board that there was now a semblance of unity of purpose at the top, but both documents left the rest of the division under-whelmed. What can we do with “motherhood statements such as these?”

By 1978 the developmental stream in Mond looked as if it was finally going to meander into the sand. The Lostock experiment was widely regarded as a failure, there had been no follow-up from the Mond Charter, Tom Bainton was no longer working for the division, and Sandy Marshall1 had retired from his position as the central internal development resource, and left his more junior assistant Geoff Campbell as the solo full-time development man. In amongst consistent cries that, after the mistakes of Lostock, in future change events or processes had to be firmly line management–led, even Bernard Wilson, the one external consultant still working in the division, had to be protected by his now small group of supporters on the board.

But out of the ashes rose the phoenix. First of all tentatively in the guise of a Wilson-inspired management development programme tapping the now accepted view that the division's managers, senior and junior, had to increase their capability as leaders, and then more down-to-earth and pragmatic events on “Leading change within a works” which Sandy Marshall and Campbell ran. Moving into 1979 a change in the top leadership of the division – Bay retired and he was succeeded as chairman by a man of long commercial experience Mark Warwick – coincided with the realisation that Mond was entering a rapidly worsening business scene. In the meantime the personnel director, Nicholas Mann, had been working with a group of senior works and business managers to develop what became known as the Mond management model. This management model, focussing as it did on the structure, systems, and management processes of the division, provided an elegant, practical, and intellectually coherent way of answering what became the strategic question of 1980 – how can we run the division's business activities more effectively at substantially less cost? At last the necessary elements had emerged for strategic change in the organisation and systems of Mond. The business and environmental pressure was there, the political will was there, an intellectually sound and practical framework had been developed largely by Mann to solve the critical problem of the day, the only question remaining was had all this investment in developmental thinking and training equipped the division's managers to successfully implement and stabilise the required changes?

ORGANISATION DEVELOPMENT AND THE MOND BOARD, 1970–76

Organisation development in Mond had two starting points at different points in time, and in two different parts of the division. Chronologically the work which was stimulated by MUPS/WSA and SDP was the true starting point, but in terms of eventual impact the work which really mattered started some seven years later in 1972 when Tony Woodburn was appointed Deputy Chairman of Mond. Eventually, of course, the MUPS/WSA development work which had started at Hillhouse Works in 1965, and gathered its own and varied momentum in the different works and production sites, met up with the board development work in 1974 at the time of the works managers revolt. But more of the works development stream in the next section of this chapter.

At the time of Tony Woodburn's appointment as chairman of Mond Division in the Spring of 1973 the board was made up of a chairman, three deputy chairmen, and nine directors. Figure 11 shows the board responsibilities at that time, and shows the strong product group organisation at the top of the division. What it does not, of course, reveal is the heavy technical background and predisposition of those carrying out the various roles. The chairman, two of his deputies, and six of the nine directors had all had research, engineering, or production backgrounds. There is, however, no production director, this role being fulfilled either by a deputy chairman or the personnel director – at this time an ex-works manager, as appropriate.

Woodburn’s two predecessors in their different ways had left their mark on the division. D. C. Tiger, chairman from 1967 to 1970, was a former chief engineer and had run the technical side of the board as a deputy chairman since the 1964 merger. His style was described by a director “as abrupt and brutal, he had the image of squeezing the last drop of blood out of every stone – in fact I believe that was 90% image and 10% delivery”. Tiger, an ex-General Chemicals director, is widely regarded as ensuring General Chemical's particular brand of authoritarianism was quickly stamped onto the Mond management culture. Tiger was succeeded by Rosewall, one of the few ex-Alkali directors to survive the post-1964 “night of the long knives”. Rosewall, a commercial man, did three things in his tenure of office between 1970 and 1973. He “drove through some investments, saw the need to humanise the outfit after D. C. Tiger, and saw the need to begin to switch the emphasis in the division from technical to commercial.”

The Mond board in 1973 was a board in name only. The division executive committee of the chairman and his three deputies “was the real powerhouse”. One of the directors, however, described the deputy chairmen as “jumping on every Company bandwagon going. We felt they were pulling levers connected to nothing – they were big work generators for the levels below them.” Another director of the time described the continual monitoring that went on between the executive committee and the individual directors:

The directors were a loose chorale of people who responded to the top 4. There was immense formality. Each function and product group director responded to the executive committee each month. This meant a ½-day session with each director. One week out of four was taken up with these sessions. That was a quite unnecessary and destructive elaboration because it cramped people's style down the line, and led to people at far too senior levels pulling up roots and looking at them every two minutes.

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FIGURE 11  Mond Division board: March 1973

The tendency of the executive committee to relate to the directors individually through monitoring and controlling activities, of course, forced those individuals and the levels below them back into their product group or functions and inhibited any kind of unified thinking at the level of the business as a whole. The atmosphere at the top was one of hierarchy and formality. The levels below the board felt distant from individual directors, and considered the deputy chairmen and the chairmen were up in the stratosphere. The thinning out of people after the 1964 merger had taken much longer to produce results at the senior management levels than it had done amongst the directors, so “there was much evidence of duplication of roles, and double banking” below the board.

When the thirteen-man board did actually meet they had real problems trying to find a content for their discussions, and enormous difficulties handling the social process of communicating and decision-making. As another director put it:

The board did not function as a board, as a group in the early 1970s. It had difficulty even finding an agenda. It had no experience of thinking or functioning in ways peculiar to a board.

The personnel director remarked:

The only common thing the board had was in personnel issues – industrial relations. Also, you had to accommodate everyone on expenditure proposals, it was a very slow, very cumbersome, very bureaucratic process.

It was these features of the board and senior management culture, the formality, the concern with hierarchy and distancing between levels, the lack of clarity about the board's role and purpose, the emphasis on monitoring and controlling and the games-playing that went with that, but above all the lack of a unifying perspective on what Mond was, and where was it going, that was the starting point for any change during Woodburn's period as chairman.

Tony Woodburn is one of a handful of really senior people in ICI who were far-sighted enough to sense during the early 1970s that changes in ICI's social, business, and political environment might require the company to change a good deal more quickly than it was doing. Furthermore, having sensed the need for change he was prepared to take the risk to use OD concepts and techniques to try and guide the bit of ICI he was responsible for towards a different shape by working in a different way. Although Woodburn had a Ph.D. in chemical engineering, his personal background and career history was not standard ICI. He came from a working-class background – his father was a chargehand. His Ph.D. was from a redbrick university – Birmingham, and he had spent nearly two years in the United States on a Marshall Aid Fellowship after he had joined ICI. This two years was spent partly studying chemical engineering at Northwestern University, and also getting some experience of the working methods of a number of North American corporations.

Upon returning to the UK, Woodburn then followed the more standard ICI path for promising technical graduates of plant management, engineering design, and then a period as a works manager, before being promoted in 1964 to be technical and engineering director of Agricultural Division. He was then involved in the traumas of the technical and social innovations going on at Billingham. George Bridge had persuaded him to go off on an American T-group, and Woodburn said he returned “profoundly influenced”. Bridge, the energy behind so much seeding of developmental ideas in ICI in the late 1960s and early 1970s, then encouraged Woodburn to go with him on a trip to the US to see some of the innovative work using participative management methods going on at Procter and Gamble plants. On this trip he met the American OD consultant Tom Bainton, and struck up a work and personal relationship which has carried on to this day.

Encouraged by his promotion to deputy chairman and probably knowing he would be the next chairman of Mond, Woodburn invited Bainton into the division “to improve at least the elementary processes of interpersonal relations in the executive committee, for starters”. Two months later, in April 1973, and with the committed support of one of his deputies Frank Bay, and his personnel director, Dylan Jones, Woodburn risked the first team-building event with his full board of 13, and Bainton and his partner Bernard Wilson. As one of the directors later put it, in 1973 “the big thing was moving out from a closed to an open system”. In other words trying to encourage the Mond board to analyse the present and future environmental pressures on the division, and consider what kinds of responses Mond should make to those demands. But if this work on environmental scanning was greeted with “very little commitment”, worse was to follow when Bainton and Wilson encouraged the individual members of the board to construct personal collages depicting how they felt now, and ideally how they would like to feel. This concern with personal values and then interpersonal processes, was directed towards dealing with one of Mond's problems at that time, “they operated in a fairly mechanical way – there wasn't much thought about what their beliefs in certain areas were”. The trouble was this was not the sort of problem the majority of the board either intellectually could recognise as a class of problem or more to the point emotionally would acknowledge as having anything to do with their effectiveness as individuals or in their role as directors.

The majority sceptical view was that they had no enthusiasm for these “love-ins”, or “sandals and beads OD”. After acknowledging the strong support given to this board OD work by Woodburn, Bay, and Jones another director explained:

But the rest of us were pretty heathen in our approach at that stage and supped with a very long spoon to the whole initiative . . . Looking back on it Tony Woodburn was sowing seeds on some pretty barren ground, which took an awful long time to germinate. One of the weaknesses of the early stages was these techniques and approaches were not owned by the board as part of the normal management regime. We would have Board Events with a capital B and a capital E where we as a board would work our way through these processes and then come back and carry on as before. The impact of these techniques on our day-to-day work was minimal at that stage, it gradually increased of course, but it was very, very patchy . . . The whole theme, and this was put over very faithfully at the beginning, was that this was part of a long-term evolutionary development. The board was merely the first step of a long chain that had to harness the total management – we wouldn't see the pay-off for a long time. But because it was faithfully put over, most of us, including myself at that time, were a long way out from knitted into the process, it made the problem of getting past stage one much more difficult.

But if the sceptics and opponents of OD on the Mond board were intolerant both of the tactics and the starting-point – the concern with their values, processes, and perspective on the business, and then being told that the strategy could only mean no short-term payoff, they were also confused by the indefinitiveness of Woodburn's vision and fearful of the only solution they could pick up from Woodburn's thinking – participation was the answer. Bernard Wilson's recollection that “Woodburn’s need was not problem driven, it was more potential driven, improving the potential of something rather than solve a particular problem”, of course while probably accurate and laudable as an objective was far too imprecise and uncomfortable for a set of people who had been rewarded throughout their career for being “instrumental” and “mechanical” in their thinking and problem–solving behaviour. The indefinitiveness of what Woodburn's vision represented to others is well caught in the following quote:

Tony Woodburn thought there was something of value to be grasped from this developmental work, but he didn't know what it was or how to go about it. He hoped something would come out, feeling it was the right thing to do.

Like most visions, Woodburns’s, while rooted in discontent with the present, was articulated in terms of value statements about a future which was only vaguely sketched in terms of outcomes, and even vaguer in terms of first practical steps to get there. Where Woodburn was precise in terms of his values about participation he created anxiety. He later acknowledged how his approach in Mond was value driven and what difficulties this had created:

I tried to introduce my ideas. I'm in a political sense left of centre. I don't like authoritarianism, and was and still am very much committed to participation as far as the shop floor is concerned, and I mean participation and not just consultation. I believe in the end that is the only way to go. That kind of idealism wasn't well received around Mond at that time.

As I have hinted, during 1974 and 1975 Mond were involved in a whole series of industrial relations disputes, one of Woodburn's directors recalled the difficulties of trying to pursue ideals about participation at that time:

This was a very difficult political period to manage – the growth of union power. It was very difficult to maintain commitment to an ideal when subjected to a lot of difficulties in the industrial relations field.

A works manager at the time recalled even more graphically how he saw Woodburn's ideas about participation and his association with Tom Bainton intruding on Woodburn's relations with the board and the works managers:

Woodburn was highly conceptual, and he had a high will towards participation. He was not easily engaging in bringing that about, but he was very supportive in giving a lot of space and encouragement. His thinking was very much influenced by Tom Bainton, who he saw as a personal counsellor and consultant . . . Members of the board were hostile because they saw him as politically to the left and they suspected his close friendship with Tom Bainton. They were puzzled by things called afterwards “love–ins” . . . There was general kind of support at the works manager level, but he didn't easily relate to them. He was kind of distant – up there. I visualised a scene at the time. I was a manager standing on a sandy island, waves all round me, sharks in the sea, and a big powerful voice with a megaphone shouting participate, participate. With a shark – and the waves rolling on! It was a dangerous activity . . . and I didn't participate in whatever he was doing, it was participate from my level down.

Woodburn’s belief in participation as a way of breaking down barriers between management and the shop floor led to the important Lostock experiment – of which more later. By the time towards the end of 1976 when Woodburn knew he was leaving Mond to join the main board, his board at Mond “was still divided about the value of OD work into the pro group of Woodburn, Bay, Jones, and Mann, a small group who openly said ‘this is all rubbish’, and a middle group who were basically in sympathy but hadn't come to grips with the thing to appreciate its value.” A director recalled that before Woodburn left he had “taken us all – the board and their wives, into Purdah for a weekend workshop at Stratford. We spent 3 days with Bainton and Wilson taking stock of the whole programme. In retrospect that was immensely valuable, it caused most of the middle group to pass through the eye of the needle, and they were positively on board after that.”

The Stratford workshop was something of a turning point, if only because it clarified that the new chairman, Frank Bay, was committed both to further work on developing the role of the Mond board in running and developing the division, and in increasing the capacity of senior managers to handle internal and externally generated change. Stratford produced the important practical requirement for a long–term process of evolutionary development – continuity of top support and leadership, and as we shall see through Bay a greater sense of task–focussed urgency. What it is doubtful if it did was to ensure all the middle group of sceptics “passed through the eye of the needle”. The director who argued that the middle group was now on board may have just been sensing a general positive surge from his own change of heart. Interestingly, his change of heart was in his own admission associated with a promotion to deputy chairman, and therefore membership of the still powerful executive committee:

My perspective had changed by that time because I was now a deputy chairman and part of the inner sanctum and therefore more heavily under the influence of the high priests of the (OD) culture.

But even by early 1977 and after 3 or 4 years of effort:

There was a complete failure at that stage to get OD methods and thinking into the total management system, so that even if board members and one or two senior managers outside the board were converts the mass of the body politic were not, and that was the main reason why the whole message had a very limited impact.

Perhaps also the mass of the body politic were still as confused by the board's inability to cause something to happen as a result of the use of developmental resources. Perhaps also the continuing, indeed by 1976 improving, financial results of Mond meant there was no real felt need for change in structure, systems, and management processes. Perhaps also, as we shall see now, much of the important production areas of the division were too busy in the trenches wrestling with the more tangible problem of how to deal with trade union disputes whilst the board, in the works managers’ view, demanded much but supported little.

ORGANISATION DEVELOPMENT IN THE TRENCHES:
THE WORKS AND INDUSTRIAL RELATIONS, 1965–76

Looking back on the birth and evolution of developmental activities in Mond, a key trigger which was used to draw consultants into the division was the worsening character of industrial relations over the period 1969–76. The apparent strength of shop steward power and organisation over that period, apart from assisting weekly staff achieve some of their aspirations, also exposed a number of faults in the pattern of management organisation and behaviour towards weekly staff in general, and employee representatives in particular. The beginnings, by shop stewards, of greater awareness of and confidence in using power, exposed the lack of policy thinking and practice on the Mond board about industrial relations matters, the quite inadequate for the times system of organisation and communication between works managers in the division and the overall quality of man-management skills amongst a set of production and engineering managers who were still defining their priority areas in the workplace as technical rather than people, politics, or organisation. The industrial relations fires which began to burn across Mond's works in the northwest of England in the early 1970s meant that Mond began to acquire the kind of dubious reputation that the other centre of burgeoning technological development in ICI – Wilton – had acquired at the end of the 1960s. The process of diagnosing and tackling these industrial relations problems was a key stream in the development work in the division, which eventually met up with the slow progress of change on the Mond board, when around 1974 and 1975 it became clearer that the issues of management structure, culture, and capability affecting the division's functioning required linked and interdependent changes at and between the board, the business managers, and the works managers of the division. This practical manifestation and recognition of the simple truism that in organisations all things are interdependent, gave greater credibility and force to the open-systems planning techniques being introduced into the division by Bainton and Wilson, and helped those arguing for the strategy of developing the division through a centrally co-ordinated approach based on a clear set of principles and values hammered out initially at the top.

In examining the pattern of workplace relations in Mond, one has to start with the recognition that the shop floor cultures of mid-Cheshire and Runcorn are quite different. Mid-Cheshire, as we have seen, was the home of the Brunner, Mond tradition of industrial relations in ICI with all that meant in terms of paternalistic care stretching from housing, education, recreational amenities, to early trade union recognition, innovations in improving hours of work and working practices, and Works Committees – the forerunners of the ICI Works Councils.

Like Billingham, the mid-Cheshire town of Northwich was really an ICI community, and a community based in a rural area where there had not been a history of industrial development. In this community all were dependent on ICI, not just at work but also at play. The traditions perpetuated from the Brunner, Mond days by the gendemen chemists at Winnington Hall, by a stable and successful business in a monopoly situation, meant there was the time, the space, and the willingness to develop a sense of community and loyalty to ICI. Grandfathers, fathers, and sons were all glad to find employment in the soda ash plants, and daughters could also take up clerical and secretarial work at Brunner House, the former Alkali Division headquarters.

It was precisely this kind of stable, loyal workplace community which even in the nineteenth century stimulated the taunt already referred to of “the white slaves of Winnington”. Of course after the Second World War as state legislation played an increasing part in policies for housing, health, recreation, and industrial relations, so Alkali Division appropriately enough began to withdraw from some of its obligations and felt responsibilities “while remaining prepared to provide support if this were sought” (Dick, 1973:107). A shop steward from mid-Cheshire recalled that the first real change post-1945 he could remember at Northwich was the influx of people from Liverpool in the early 1950s to meet the demand for labour in developing plants. He remarked “this is one of the resentments local people in Northwich have now got against ICI. They brought these outside people in, and now (in 1982) they are cutting back”. The outsiders from Liverpool had their roots only about 20 miles from Northwich!

Worse was to come, however, after the 1964 merger with General Chemicals and the influx of a certain number of General Chemicals–trained senior managers into the mid-Cheshire plants. An ex-Alkali Division manager's view of how the creation of Mond influenced work place relations in mid-Cheshire was:

Alkali Division was very patriarchal – it really did look after its people. Father will look after, father will provide, father really cares for us. When the merger occurred with General Chemicals they felt father had left them. He didn't care, he was in Runcorn. Also father's behaviour was really quite different. He was more remote, more critical, he cut off money into the place – there was a run down appearance here . . . People who had grown up in the culture of Merseyside couldn't relate when they came here – there was a feeling of more remoteness amongst the men.

Of course, not long after 1964, MUPS and then WSA were introduced into ICI. One of the major effects of MUPS/WSA, as we have seen in other divisional chapters, was to formalise and strengthen the role of the shop steward. This happened as pressures for collectivism were gathering momentum in the UK generally, and as attitudes were changing to authority and its use. These forces began to come together at mid-Cheshire and elsewhere and to focus around the formal and capricious use of managerial directives. There was plenty of evidence of hierarchy, formality, and authority in mid-Cheshire. A recent managerial recruit into a mid-Cheshire works at that time commented:

The works manager had his luncheon dining table, with a long list of managers sitting according to length of service and status. He sat there and carved the roast and passed the plates down . . . Supervisors were still to be seen taking off, or touching, their hats to managers and referring to them by title. Even junior managers referred to senior managers by tide. People were locked into formal behaviour in a hierarchy, I was shocked by this.

A shop steward interviewed about the character of managerial behaviour in mid-Cheshire confirmed the above picture of an increasingly distant and unilateral management. The range of behaviour varied from every employee getting a Christmas card in his wage packet from the works manager, to technical people coming into the plant and making adjustments and not telling the workers, what or why. It was a matter of “management sending out instructions through supervisors – there was very little consultation. There was a build up of resentment against the management instruction approach – people just said enough of this, and when the 1970 strike came management were completely shocked that this could happen.”

If the company town atmosphere around Northwich was very reminiscent of the pre- and early post-war Billingham, Runcorn on a smaller scale had many of the characteristics of Wilton. Runcorn's near neighbour across the River Mersey was, of course, Widnes, one of the birthplaces of much of the UK Chemical Industry. Whereas the population of Widnes had endured the Leblanc industry since the latter half of the nineteenth century, Runcorn as a site for a rapidly developing chemical industry, and a new town, was essentially a product of the late 1950s and early 1960s. The Liverpudlians who flocked into Runcorn new town were more used to a tradition of casual labour based on employment in the docks and the merchant marine, than the stable occupational community atmosphere around Northwich. There was not the same tradition of ICI employment around Runcorn, nor the kind of loyalty to ICI found in mid-Cheshire. The engineers of General Chemicals Division were building new plant almost continuously at Runcorn throughout much of the 1950s and then after the 1964 merger. ICI employees at Runcorn were neither being offered nor were probably seeking, the kind of paternalism being displayed in mid-Cheshire. Instead they were part of almost continual technical change with all that meant in terms of a management ethic preoccupied with technology, repeated demands for adaptability in the workplace, and the ever-present distractions on the site of non-ICI construction labour. One works manager described Runcorn as:

Being much more volatile [than mid-Cheshire], much more used to quick construction and demolition going on all the time. There was a tradition of clearing off to Fords if they didn't like what was being offered by ICI. “Blow you Jack, I'll look after myself, I'm alright”, was a common attitude on the shop floor.

By 1969 turnover at the big ICI Castner Kellner plant at Runcorn “was 30%, and it was a real hotbed of industrial relations problems”.

Of course, MUPS/WSA had been introduced into the worsening industrial relations climate at Runcorn and mid-Cheshire, and indeed right across Mond Division. As in other parts of ICI an effect of MUPS/WSA in Mond was to reveal management's lack of preparedness and skill in handling the problem-solving and negotiation processes with shop stewards that were now required of them. The vehicle of WSA itself, and the general increase in collectivism and shop steward power, all demanded man-management skills. In this situation, and again as we have seen to varying degrees in different parts of ICI, some works managers became in effect early adopters of OD methods. In Mond, Frank Bay, Tom Peters and Dylan Jones at Hillhouse Works, and Sandy Marshall at Lostock Works emerged as leaders in drawing developmental resources into the works – they also persisted throughout the 1970s in trying to spread developmental thinking throughout the division.

The existence of MUPS co-ordinators helped to legitimate to some the value of third-party helpers in some of the works, and when the MUPS co-ordinators were no longer needed, the increasing use of behavioural packages such as Coverdale and Blakes Grid, and then the appearance of SDP, encouraged Mond to send two groups of six people to be trained as change agents at Eastbourne 1 and Eastbourne 2.

The use of specialist internal change agents in Mond seemed, with one or two exceptions, a failure right from the start. The first group of six to go to Eastbourne were mostly middle-ranking line managers. This first group of six were so disturbed by what had happened to them at Eastbourne 1, that “the division had to scratch around to find six people prepared to go on Eastbourne 2, and they came up with some junior personnel officers, training officers, and a section manager from management services.” When the 12 returned they were dispersed around the division in various works and departments and were told:

You bring about change. Of course, they replied “oh no we can only counsel and coach”. It didn't go anywhere, it was all a bit pathetic.

At the beginning of the 1970s, in a fairly unco-ordinated fashion these change agents, who were, of course, very junior people in Mond's very formal and hierarchy-conscious management culture, ran into the same problems of resistance that even the Chairman and his more prestigious group of external consultants had in trying to introduce the value of process management skills to the Mond board. The change agents’ concern with behaviourism, with process skills, was seen as “much too soft”. One works manager of the time also felt the change agents were challenging management from a very weak base:

These so called change agents, they worked hard, one in my works began to use words like I was his client. But he had great difficulty in understanding the complexities of my problems, he tended to be saying things too black and white, dealing with issues out of context. He wasn't sufficiently malleable . . . Also he continually challenged my values, my sense of values. “Authority is malevolent, what right have you to be making decisions over others?” I resented being challenged in this way by someone who hadn't sat in my seat, didn't know the total load that was there. If I'd said to him “take it”, he wouldn't have known where he was.

A director who later had to decide what to do with the remnants of this change agent group said:

These guys, they felt they were right in the forefront. But they were unloved and neglected – they felt extremely vulnerable. Some we had to pull out and push back into the line, some were unacceptable back in the line and they faded away.

In fact one or two of this change agent group did survive the ordeal by fire the Mond management culture must have represented to them, and they are still working in a couple of the works. Only one of the Mond Eastbourne-trained group, Geoff Campbell, survived this period and made the transition to become part of the top-down change strategy which started with Tony Woodburn in 1973.

Given that the Mond management culture couldn't seem to support a more bottom-up change strategy facilitated by specialist change agents who had neither “the right message”, the right positional power, or the appropriate experience, the path of development that occurred in the early 1970s was virtually to allow each works manager to do his own thing, in his own environment. One of the only clear patterns that emerged out of this do-your-own-thing approach2 in the face of industrial relations adversity, was the use of the Coverdale problem-solving technique. Coverdale was probably felt to be effective by works managers in Mond for the same reason it took off at Wilton – it was a comfortable, structured way of thinking about people expressed within the discipline of solving problems. It made sense in a culture which was still heavily focussed on technical problem-solving. A works manager in the early 1970s commented:

I went for Coverdale because it had an underlying objective – it was task-related. The focus on problem-solving fitted our culture better [than more unstructured behavioural science approaches] therefore people learnt from it.

As the 1970s developed a new set of shop stewards emerged at Runcorn and mid-Cheshire to exploit the base of operation for trade unionists created by WSA, the new ICI Joint Consultative arrangements, and general support on the shop floor for collectivism in an economy increasingly beset by inflation. Individual developmental initiatives were taken by works managers at Hill-house, Castner-Kellner, and Lostock Works, with varying degrees of management support and impact, but as the number of industrial relations problems increased so it became apparent that no amount of blanket-throwing in individual works using OD and management development methods, would tackle problems on the management side which were really being caused by the general structure, culture, and management processes in the division.

Two events, one in 1973 and the other in 1974, eventually triggered management action first of all amongst the works managers, and then at the board. In 1974 “Some co-ordinated action led by key shop stewards in mid-Cheshire challenged the annual wage negotiation process going on in London by putting pressure on this part of the company. This had never happened before – previously all the shop stewards in the works had kept separate, not loving each other any more than management in the factories loved each other. They got wiser faster than we did and put on an overtime limitation coordinated through a shop stewards committee.”

The effectiveness of this shop steward committee galvanised some of the more perceptive works managers into action. At that time “works managers in Mond behaved virtually as if they worked for different companies . . . they were practically vying with one another while the shop stewards were getting themselves organised”. A works manager using a nautical metaphor explained that:

The works managers were cruiser captains. They cruised in their own direction, but with the unification of the trade union structure they were being torpedoed, and they had to start proceeding in convoy with the destroyer screen of the personnel function around them.

But the problem wasn't just that the cruiser captains were divided amongst themselves, they were also divided from a board which itself was not offering unified leadership to the division.

We were separated because of the way we were being managed – the way the Product Group Directors operated. They would come round, look at the performance of each works, and then compare one with the other.

The Personnel Director of the time explained the problems of lack of unity on the board:

I had very great difficulty to get the co-operation of the four Product Group Directors. The attitude was do what you like but don't lose us a shift's production – this was a profitable period. The other posture was – why do we have these problems – it means Personnel are not doing their job. It was very difficult to get people to accept what is a totality of business risk-taking.

Of course, the shop stewards knew that management's need for high levels of output considerably increased their power potential, the Mond board's reaction to this appears to have been a “policy of continual appeasement”. The appeasement policy, combined as it was with feelings in the works of ill-informed and unreasonable demands from the board, reaped its own harvest:

The management response was one of dislike – frustration in trying to manage in that sort of climate a feeling of being impotent to manage – supervisors commented on not having management back up, of declining standards of management performance.

image

A lot of us felt under a lot of pressure with not much help from above. The attitude was we can't manage industrial relations if we don't get support from the bloody directors. Their attitude was output at all costs, and don't tell us your bloody problems with shop stewards, we pay you to sort that out. ‘Get on with it, and if you can't sort it out, we'll find someone who can sort it out.’

Eventually a group of four works managers got together and shared a view “that there was a lack of direction in the division”.

We didn't know what the board was doing – where are we going? The world is changing around us. What is the policy regarding this or that? We asked. The four of us sat down and wrote what subsequendy became known as the Works Managers Charter.

This was, of course, extremely counter-cultural behaviour in Mond, and the activities of the four were described as the ‘works managers revolt’. The four met the then Chairman Tony Woodburn, who responded by saying ‘Okay, but do the other works managers agree?’ Woodburn set up a meeting of the business general managers and the works managers, but not including directors. Sandy Marshall, one of the four, recalled that the message communicated by the group “wasn’t welcomed with open arms by the rest, but they couldn't deny there was something there”.

Not much tangible in the short run appeared from the works managers revolt, except for a one-page document written by Mann which appeared in April 1974 titled “Desirable Elements of Mond Strategy”. This document, a product of further meetings between the works and general managers and the Chairman, talked of “good quality information exchange between the board and senior managers, works managers joining with the board to establish direction and pace in the development of WSA and SDP principles, and each works and department operating harmoniously within an agreed, shared management philosophy, style and sense of direction.” No action followed because, as we discussed earlier in this chapter, the board, helped by Bainton and Wilson, were themselves at this time still grappling with questions about their role, identity, and the policy focus for the division. Nevertheless the works managers revolt had reinforced the Chairman's philosophical position that change was necessary in Mond, had given the works managers greater confidence in bridging the “gynormous gap in systems terms between themselves and the board”, and had also signalled to the external consultants that there was energy for change amongst some of the works managers.

While much of the above had been going on Bainton and Wilson had been encouraging Mond Personnel Department to visit the scene of some of their use of open systems planning methods in the United States. During 1972 this encouraged the Works Manager of Castner-Kellner works at Runcorn to try an experiment in the cell-room amongst the mechanical maintenance group there “to release fruitful ideas and initiatives from the shop floor, to facilitate their implementation, and to improve the effectiveness of the Group”. The idea was for management to link with a work group where there was evidence of internal energy for change and where communications are regularly and naturally established, in order to focus on a “core process”, which in this case could have been “the progressive elimination of the need for maintenance measured by increased plant availability etc.” Open systems planning would then have progressed the agreed “core process” by the management and maintenance group jointly examining the environment around the core process, and looking to manage the surrounding systems of support and constraint, in order to build commitment for agreed plans for change.

Wilson described the objectives of the Castner-Kellner experiment “as not to reduce manpower at that time, but to improve the maintenance group's motivation to examine how they worked – the way they worked rather than direct attempts to improve productivity”. No shop floor reports are available on this experiment. Management reports indicate that the failure to include the trade unions in the experiment, a tactic of course possible in some North American factory experiments using participative methods, eventually brought the experiment's downfall:

The works manager got a good response from the shop floor, but he hadn't included the trade unions in this activity. They closed in on it and wouldn't tolerate differences in working being developed in the cell-room – differences in output levels and demarcation levels. This was seen by the shop stewards as threatening. It was an ill-conceived experiment, it was incomplete, they left out a very important political group . . . The experiment just fizzled out because of trade union opposition and when its works manager patron moved on, and his successor wasn't keen.

Some learning was taken from the Castner-Kellner experiment, and when the much more ambitious Lostock Works development began in 1975, no attempt was made to keep the full-time trade union officers or shop stewards out of the activity.

But returning to the general theme of industrial relations developments in Mond, it took a major industrial relations dispute about weekly staff shift disturbance allowance which started in mid-Cheshire and spread to Mersey-side, to really trigger action beyond what was possible from the works managers revolt. Sandy Marshall reports that the Deputy Chairman, Frank Bay, came to him and said:

We’re at some kind of watershed in industrial relations, can you (with a personnel manager) do a study of how other companies when they get this far – when they get into these confrontary states, how did they handle them?

Marshall and his colleague visited half a dozen different firms, including ICI's people at Wilton:

We came back and said there's too big a gap between the businesses and industrial relations. There's lack of integration between the different operating units – we're fighting each other, not reinforcing each other. There's no central forum where we can learn from each other, and there's no forward policy on how we can improve the quality of industrial relations.

This time with the shift disturbance dispute having lost significant output, and a lot of negative reaction from customers, together with Millbank showing increasing interest in the poor quality of industrial relations in Mond plants in north-west England, substantial action followed quickly. A works managers group was created3 linking a deputy chairman, all the works managers and relevant personnel people. A further group linking the same Deputy Chairman – Frank Bay, the Personnel Director, all four Product Group Directors, and all the business general managers was created to deal with problems not resolveable at the works manager level. At the time these groups were created in the Summer and Autumn of 1974 there were “36 industrial relations fires burning in the Mond plants in Cheshire”. There was now a resolve to try and reassert effective management control through a mixture of involvement and firm directiveness.

The division's historical stance, of avoiding union trouble because of financial costs, was now to be replaced by a short-term strategy of law and order – a simple no work, no pay approach, and then followed up with a strategy of using the American consultants and the newly created internal developmental resources of Marshall and Campbell to “try and provide the skills and knowledge base for managers to begin to involve the shop floor in a different sort of way”. In fact, although there was not too strong a realisation of this at the time, these attempts to deal with the industrial relations problems through works manager–director level contact did help to make some of Woodburn's attempts to influence the board on questions of organisation and management processes that much more tangible. As Nicholas Mann later said:

Industrial relations was the trigger to try and develop a more unified management, coming through that we realised we wanted a more unified management not just for industrial relations, but also to run the business.

But following the thread of unity at the top around business purpose will take us back to the developmental activities of the Mond board after Woodburn had left in 1977. But before we move on to consider that, there is Woodburn's vision of participation at work to consider and this requires a close look at the important experiment conducted at Lostock Works.

THE LOSTOCK EXPERIMENT AND ITS LEGACY

Before examining the particular characteristics and impact of the Lostock Works experiment, it is important to recall some aspects of the Mond context at the time the experiment began in 1975. A brief look at the context will remind us that we are looking at parallel and interdependent streams of development activity, some occurring at the board level, some as we have just seen being stimulated by highly tangible industrial relations problems, some being prompted by Woodburn's vision of improved relations between the managers and the shop floor, others by experience and conceptual ideas brought into the division by the American consultants Bainton and Wilson, and still others spinning up from individual works managers and production units. In no sense yet was this process either part of some rationally conceived master plan for the division, or indeed supported by anything more than a small subset of people although the subset of supporters of the Mond development work continued to be at and near the top of the division's power system. We are, therefore, discussing a meandering process where a combination of rational intent, inarticulate intervention, imprecise vision, chance, and opportunity were together shaping the unravelling of the Mond developmental stream.

The decision to use the open systems approach to assist the participative design, construction, commissioning and operation of the new cell-room in the Lostock Chlorine Works, was taken when and where it was for a mixture of reasons. The political will to conduct the experiment at Lostock, and the less visible and intensive change projects started at Buxton Works and in part of the division's Research and Development Department, undoubtedly came from Tony Woodburn. Lostock was chosen because the Product Group Director responsible for the chlor-alkali businesses strongly supported an initiative there, because under Sandy Marshall's prompting there had been a history of development work in Lostock Works, and because the American consultants took the view that the high energy and commitment usually generated in new plant start-ups would create a supportive climate for an experiment attempting to link technical, social, and organisational aims.

The timing of the Lostock experiment was no doubt influenced by a desire by Woodburn and his supporters to see something tangible happening after the vague promises of the industrial relations, and employee relations principles had been enunciated and also because another group of Mond people had only just returned from a visit to the United States to see the impact of Bainton and Wilson's work on open systems planning in a number of Procter and Gamble plants. A works manager who had been on this trip remarked that the Procter and Gamble plant had looked like an attractive proposition because it had:

Low cost production, low levels of supervision, few tiers of management, high skill levels, and people were really motivated by what they were doing.

When the works managers returned from their American trip they gave a presentation to the Mond board; the board's reported reaction to this talk on “autonomous work groups”, gives some indication of the highly sceptical views still around at the top of the division just as the Lostock work commenced:

With the exception of Woodburn, Bay, and Jones there were a lot of doubters on the board. “Get in there and straighten them [the Unions] out, never mind this round-about stuff. It's okay for those Yanks but not over here” was the view. The board, instead of being a generator of support, was still a sponge to effort coming up.

This majority view at the top, of let it happen rather than support it happening, was of course eventually fateful when the Lostock project predictably ran into a number of powerful barriers. A shop steward closely committed to the experiment for much of its duration ultimately said:

The event was started off by senior management in Mond division. They did not have the strength to see it through, so they must be responsible at the end of the day for the failure.

The overall purpose of the Lostock experiment was to create a commissioning structure and process “to enable people in all parts of the plant and associated functional departments to feel they were part of a complete business system composed of technical, commercial, and social components”. Joint management–union groups were created to encourage processes of designing the form of organisation and training which would meet a number of aims about business, jobs, industrial relations, support systems, and environmental care whilst commissioning this £17m new cell-room. Beyond this broad but immediate framework of aims, was the secondary objective, “to enable people to acquire the capability to think and behave in the way needed for the organisation to function effectively in achieving its goals”. In other words it was hoped that through the various shared tasks and processes of plant commissioning, the overall capability of individuals and therefore of the system would be raised, and this improvement of capability would become a continuing feature of the plant's functioning.

The commissioning structure and process developed for the Lostock cell-room was quite different from what had gone on before in Mond. The custom was for a project manager to run a commissioning project team of managers with engineering design, construction, and operating plant responsibilities. The usual pattern was for this project team to consult with many groups about technical matters but:

Management influenced all thinking about the organisation of the new plant. Management would sort out the structure and manpower numbers based on work study and technical considerations – the unions would then be told/persuaded of these structures and numbers and training also designed by management would proceed.

In Lostock the concern with organisation, training and environmental considerations were all jointly tackled by management and the unions, and the whole thing was pulled together by a core group – which was also a new concept.

Bainton and Wilson played a crucial lead role in designing in process terms what would happen. A start was made by discussing the idea of a participative process in the Lostock Works Committee. With this agreed a group of 50 people, of whom about 15 were shop stewards, took part in activities designed to develop a shared philosophical base for the project, and generate shared long-term objectives. From this group the Lostock Charter was created. The charter was a statement about the values and direction informing the project as they related to matters of business, community, jobs, support systems, and industrial relations. Following the drafting of the Lostock Charter those involved in the commissioning sought to generate additional support for what they were doing. Members of management and unions went out in pairs into the company and union hierarchies and told them in individual sessions about the charter and invited their comments and ideas for improvement.

Following this an organisation structure was agreed to see the project through with maximum participation by representatives of the work force at all stages. At the heart of the organisation was a core group of monthly and weekly staff responsible for the speed and direction of the whole project.

In addition four task forces were formed. These were groups of people capable of managing the project's main areas of concern – technical, training, organisation, and care of the environment.

Also on hand was a boundary resource group of senior managers and full– time union officials. These were people who:

(a) had a capacity to provide assistance and resources where appropriate;

(b) were able to interpret and influence the constraints under which any decision relevant to the project needed to be taken;

(c) were outside the immediate area of the project but who were affected by or could affect what took place.

Finally, the core group was itself guided by a small facilitating group of four people. These were the assistant works manager at Lostock, Sandy Marshall the ex-works manager at Lostock but now Mond's senior internal development resource, a shop steward, and the internal consultant working full-time in Lostock Works.

These groups went through activities variously described as “vision building”, “searching”, “testing”, “questioning”, “principle building”, “problem solving”, “individual capability building”, and “joint decision-making” which because of the intensity and depth of challenging and questioning of conventional solutions to issues of organisation, manning, and training took an inordinate amount of time. As the work progressed enormous energy and commitment was put into it by a number of key managers and shop stewards, and the core group, on the advice of its various task forces, began to take on some fairly revolutionary recommendations as far as the Mond, ICI Group, and trades union systems were concerned. A shop steward recalled that:

We came up with a common wage structure for monthly and weekly staff and agreement that everybody should know what everyone else was getting in the way of rewards; take the secrecy out. We also wanted to create multi tradesmen on the plant with supervisors from any background supervising people from any background.

Sandy Marshall indicated that:

We wanted to pay people more on the basis of personal skill levels than job descriptions. The range of work a person could do would be recognised. People could apply to train for additional skills, be tested on those skills, and then paid for them.

As these various revolutionary suggestions were agreed inside the core group and then taken outside, so the Lostock cell-room project began to run into more and more vested interests that neither the enthusiasm nor the intellectual argument of the core group could deal with. Of course, it had been one of the objectives of setting up the boundary resource group to deal with some of the systems implications of the Lostock ideas, but communicating ideas to a boundary resource group was one thing; having a group with the power to deal with the vested interests that moved in on the Lostock plans was another matter altogether. One of the internal development resources commented:

The boundary resource group never really learnt what its proper purpose was in this activity, and they didn't spend enough time together. They were called an umbrella group; they were meant to stop raindrops falling on Lostock, and to help legitimate what was going on. But it needed to be a more active group. I will change the environment to allow this to go on, rather than just hold an umbrella, should have been their approach, but it was too passive a group. Of course we didn't have enough muscle in the core group to shift the environment either – that's the case.

The real problems started when the Lostock ideas meant not just changing the organisation and the work methods but the payment systems. In no time restraining pressure appeared not only from the Mond Personnel Function, but also Central Personnel Department in Millbank, and the national officers of the relevant unions:

I remember lack of support from the Personnel people. “You’re mad, you're really giving these boys too much space. You're building them up with skills that they'll take us on and beat us with. It's unhealthy, it's way out. This doesn't conform – we're building rods for our backs. You're creating expectations that you'll never be able to deliver on. The fly back from this is really going to be so bad you really won't believe it.”

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I perceived Personnel as rather standing off, a concern not to become tainted with this developmental thought because of their negotiating role . . . They saw Lostock as giving away information and decision making authority.

A personnel manager confirmed the above impressions:

In spite of the environmental scanning, Lostock didn't sufficiently take into account the environment it was in. The expectations raised among key union people were more than the system was going to meet. There was no way the pay system across ICI was going to be modified because of Lostock. Bernard Wilson did not appreciate the sheer institutional barriers to change the British union system presents, the craft–general differences. There was an over-optimistic belief those processes could be worked through.

A shop steward even in 1983 prepared to say the Lostock project “was the right road to go down”, admitted both that some of the stewards “kept their scepticism to themselves – they only went along with the exercise”, and that the stewards like him who openly supported Lostock were put under pressure by their peers, their membership; and managers elsewhere on the Lostock site:

The Arthur Scargill type people in the trade union movement were saying ICI is conning you; when ICI have got out of it what they require that'll be it. It's just a device to get their will . . . But one of the things that did happen was that we became isolated from our members by spending too much time shut up in the core group . . . Really a mistake we made was to try and put a wall around a piece of work. I was acting one way here, and then when I went elsewhere on the site management were expecting me to act in the same way. I couldn’t; I had my traditional role to play elsewhere. It influenced me but I couldn't behave the same elsewhere and management found that very hard to live with.

A further boundary problem the Lostock project had was with the engineering commissioning team, who were under the traditional pressures to have the cell-room start up on time and to cost:

The engineering part of the job somehow always managed to stay separate from the project – they just wanted to get the plant built. We were holding back the completion date – frigging about.

The “frigging about” mentioned was, of course, attempts to reach understanding and consensus about what should be done in complex, and as we have seen, contentious issues about organisation, manning, and pay. The problem was finding a marrying of the slow processes to reach consensus on organisational issues with the often speedier day-to-day technical decision-making of the engineers and their commissioning team.

A further problem that emerged some way down the process of commissioning Lostock was that “the middle management, section and plant managers were not supportive of what was going on – they didn't understand it, and no great attempt was made to bring them on board as to why it was being done. Publicly they would say okay, but privately they thought what on earth is this all about?”

Of course, the reality of Lostock which worried local management most was the fact that:

It was almost getting to joint decision-making. There's a spectrum from joint decision making to telling. Lostock got close to joint decision making and that's what worried a lot of people. We went out on a limb.

A shop steward noted the anxiety created at local management level because of loss of authority:

I think local management didn't want it. Plant managers because they saw their position being eroded. The participative arrangements meant that decisions would be made when the plant became operational by a sub group in the plant; or if not totally made by them then certainly fully discussed by them and influenced by them. Supervisors also felt their authority would be compromised by this.

The irony of a set of people using a problem-solving process requiring open systems thinking and mechanisms such as boundary resource group and then running into so many brick walls was not lost on the long-term sceptics of the Lostock project. As one crisply put it:

They were preaching open systems, yet couldn't handle their environment. They seemed to set aside the fact that there was an ICI payments system, raised expectations of people that they would be paid differently, then couldn't deliver, so it was a big let down.

The Lostock chlorine plant was eventually commissioned in April 1978, some eleven months behind the commissioning date envisaged by the Company in March 1976. Not all the delay by any means can be attributed to the complicated organisation and social process chosen for the project. More significant than the delay, however, was the fact that “the reassertion of management authority”, and a strike in October 1978 meant that the structure and process of working created with such promise and enthusiasm in 1975 were abandoned.

A manager described the break-up of the Lostock project in this way:

There were some sub-optimal decisions from the process which eventually management found unacceptable. For example, boilermakers on shift to check that fitters didn't do boilermakers’ work. Management eventually took a stand and said the resolution of inter-union patterns isn't what the project is all about, and we really have to take those principles now and as managers put together a proposed organisation. That was part of the background to the 1978 strike, it wasn't the public cause but it was part of the difference between management and union. In effect management had to assert their authority, and the structure broke up. The core group stopped functioning, and eventually disintegrated.

A shop steward explained that there had been difficulties just before the strike because the ICI assessment system was coming up with job grades below what they expected. The real flare-up, however, developed over an overtime ban:

As part of the annual wage bargaining the mid-Cheshire trade unions were putting in an overtime ban. Pressure was put on us to put the same ban on. We didn't want to do that at that time, because we had enough problems trying to raise the grades of other people. But we had our responsibilities to the trade union exercise, so instead of having an overtime ban, we suggested a planned overtime ban. This meant we would still be available to come in for overtime, all management had to do was phone the men they wanted and pay the necessary money. We explained this to the assistant works manager, production, and he was quite happy. But next day he came back and said we can't agree to this and gave no explanation. Someone outside Lostock Works didn't believe what we were saying, didn't trust us . . . After this the relationships between management and the workers were soured and the management decided the Lostock work would no longer carry on.

There was a strike and the general unions withdrew from consultation for about 12 months.

The aftermath of that is that management in our eyes are determined to manage now [in 1983]. We have very little involvement in decisions. The operation of the Lostock chlorine plant is no different from any other in mid-Cheshire. Also it's forced the trade unions in Lostock Works to go back into a mid–Cheshire role rather than a Lostock role. Now we follow the mid-Cheshire line, and since 1978 we've had 2 or 3 strikes.

Nobody interviewed in this study described the Lostock cell-room project as a success; in fact most people categorised it as a failure, although some would also acknowledge that the learning from Lostock stimulated activity which was of great benefit in the post-1979 business survival era. A senior member of the present Mond board remarked:

At the time it appeared to be reasonably successful but it wasn’t. Again it was sowing the seeds in fairly alien fields, and it was perceived as an oddity. It didn't have a critical mass behind it to turn it into the norm, and therefore it didn't have the lasting effect we thought it might have at the time.

Another board member made the essential point:

It is very, very difficult to change history, to change culture without some physical change around you, preferably a new location. It is difficult to reverse history . . .

In terms of learning for the future the director who made the above point about the structural and cultural impediments in history remarked:

Lostock was not a solution to the institutions problems, but it was of considerable value as an investment. In OD there is a high element of redundancy, like research in general. You've got to do experiments, learn as you go along, the body of knowledge is increasing all the time.

The particular areas of learning people pointed to to inform their future behaviour were putting better boundaries around change activities so they don't get too ambitious for the surrounding structures and culture, avoiding dependence on external consultants to lead the change process, the recognition of the tremendous peer group pressure put on individuals on the management and the trade union side when they are creating what is perceived to be an exclusive and threatening change, and above all in Lostock the recognition of the necessity of management leadership capability in handling change. I doubt, however, given the kind of outcomes emerging from the Lostock project, and the degree of threat those outcomes posed to powerful interests on both the management and the union side – in and outside Mond Division, if a different kind or more skilled leadership would have made any difference to Lostock. Except perhaps the kinds of leadership which would have steered the project to much more culturally and politically acceptable processes and outcomes than were tried in the Lostock cell-room. As one person closely involved with Lostock said:

We really said we must not go back and run any projects unless the whole culture and management philosophy of the place could handle change from underneath.

The real lesson from the Lostock project which the system did assimilate, but still could not do anything about, was that in Mond Division really significant change of the kind contemplated at Lostock would have to be a unified top-down management activity. Within 18 months of the dissolution of the Lostock core group, a highly unified power system in Mond was creating very significant change indeed. This led one of the visionaries associated with the Lostock work to argue:

I look back with sorrow at the brutal way some of those things have been pushed into the background. I worry that there will be a backlash should the power balance shift.

THE BEGINNINGS OF PURPOSE AND UNITY ON THE MOND BOARD, 1977–79

The review earlier in this chapter of the Mond board development work up to early 1977 concluded with a quotation from a senior member of the board indicating little impact on the board and even less impact on “the mass of the body politic”. This same board member went on to argue that the basic scepticism remained for much of 1977 and 1978, and was still around when the present Chairman took over in 1979. His quote reveals this scepticism, and also interestingly how much some members of the board hoped for perhaps, and certainly expected a change of direction each time a new chairman came into office. Understandably, Mond directors and senior managers still took their cue from the Chairman:

I remember when Tony [Woodburn] went people approached me and said Tony's gone now can we forget all that stuff? And then 2 years later when Frank [Bay] went and I took over they said the same thing to me. There's always that about.

Even Tony Woodburn was happy to acknowledge that as he was leaving Mond, his work with the Mond board was only just beginning to have some impact:

It took me a long time, in fact I'd only just really started to get the whole of my board – about 13 of them on board with all this.

Of course, the state of the business environment in 1977 is the obvious explanation for the absence of “any major real blitz on productivity and organisational improvement”. With sales of £858m, profits of £146m and a ratio of trading profit to sales of 17, the General Chemicals Product Sector results for the whole ICI Group in 1977, put them top of the pile. Mond with hindsight was in a false dawn situation, but the business climate in 1977 was one of growth and further success. The division was busily recruiting and gearing itself up for major new capital investments at Wilton and Wilhelmshaven.

In the absence of any business reasons for across-the-board strategic changes, the Mond development work continued to plug away at development work in the works situations where there was the continuing problem of poor industrial relations:

There was a lot of pain in the industrial relations – social scene, and there was a lot of energy to find better ways of handling that part of our affairs. I hardly had a summer holiday for 3 years because of all the aggravation going on. Frank Bay and others were very exercised about that. The search therefore in the various experiments at Lostock and Buxton was not for business strategic development, but how can we run the people side better?

In spite of the above context for development work on the Mond board, Tony Woodburn was determined not to leave the division without managing some kind of continuity with his successor Frank Bay. The meeting Woodburn organised over a weekend at Stratford in the Autumn of 1976 to review progress so far and help propel the board forward is widely regarded in retrospect as a watershed in the meandering process which so far had characterised attempts to influence the culture and perspective of senior people in Mond.

Strange as it may seem, a clear decision was made at Stratford that indeed the Mond board did have a role alongside the powerful four-man executive committee. Prior to this some directors had wondered, because of the limited agenda of board meetings and the nature of the meetings themselves, if the board was necessary.

Also at Stratford the board formed themselves into seven topic groups and a co-ordinating group, each with a specific task, which were collectively aimed at the development of Mond Division as a total business system, sensitive to trends in its environment, and having an ability to adapt continually in a way that ensured its future prosperity. The seven topic groups were asked to focus on board relationships and processes, Mond's future business scenario, Mond as a corporate entity, Mond's organisation, Mond's environment, Mond's culture, and the development of a document that became known as the Mond Charter. Mann was made responsible for progressing and co-ordinating the work of these seven topic groups.

Frank Bay's reported style as chairman by Mond senior managers and directors is different from Woodburn’s. Woodburn is often described as a broad–brush conceptualiser – a climate setter for things to happen, whilst Bay was said to be more results–oriented, impatient/practical, and concerned to cause things to happen. Bay caused the Mond Charter to happen in August 1977. Using headings such as aims of Mond Division, business operating principles, environment, financial, employees, and organisation the Mond Charter was an attempt to present a view “of the sort of organisation the division board wants Mond to be”. The process of producing this document may have helped members of the board to clarify and unify values and perspective but it seemed to leave levels below the board mystified about what they could do with a charter. A director whimsically commented:

I remember saying of the Charter let's get this down on paper – who's going to be Moses and who will be Aaron? It was the 10 commandments. Management were very sceptical – this is another good intent, will the board live by it?

One of the development resources remarked:

The product they produced had tremendous meaning for some of them, but what they were not very skillful about was actually passing the message onto others. Some directors just sent the charter out with a memo, others had a meeting and people felt what was all that about! Managers’ reactions were “it’s motherhood”, “pie in the sky”, “airy fairy”, “what do we do with it?” A fair number of the directors, of course, didn't know what they would do with it once they'd got it.

A manager confirmed that the charter was “a bit of a lead balloon – it was published and forgotten about, it wasn't clear what you could do with it, and so not much happened as a result of it”.

Not dulled by the no doubt well-concealed scepticism to the Mond Charter, the board, aided now by the single consultant Bernard Wilson, began to focus in on some concepts and processes which they felt would inform a strategy for management and organisation development. However the continuing problem the board faced was what to develop and for what purpose? The Mond Charter, in spite of its breadth of coverage, was still perceived by many board members as:

A strictly behavioural synopsis of management objectives, which had some sympathy with the drive in those times for better industrial relations, participation, and greater social awareness in the community, and therefore very much emphasised that side as compared with the business side.

More energy was put into the board development work in the Autumn of 1977. This time four new topic groups were created, and eventually the four became three as more focussing was directed to the topics of business, organisation, and resources. But the doubts remained, where was the output of all this thinking and concept development? Real pressure was put by some directors to discontinue Wilson's contract, and it was now apparent that management had to reassert its authority in the Lostock experiment. The Spring of 1978 was a period of real doubts about the purpose and impact of development work in Mond Division. In spite of more and more articulate reflection at the board level on the principles, values, and policies that might inform the character and shape of the Mond businesses and their organisation, and their codification in the charter and a board handbook, the board still didn't “know what their thinking about the leadership of change was leading towards”. It appeared what was being developed was a more and more sophisticated motor car with a well-thought-out engine, fuel system, and gearbox but not yet having a sufficiently unifying and engaging reason for pushing the gear lever into gear to carry the vehicle towards an agreed point. All this was to dramatically change with the changes in the business environment first recognised in 1979, but before then there was another period of assembly, polishing, and refuelling before the Mond management model left the garage on Runcorn Heath.

BUSINESS CRISIS: HARNESSING THE DEVELOPMENTAL CAPABILITY IN MOND, 1979–83

Although in the writer's view the reasons why the Lostock project got into difficulty were because powerful interests were challenged, one of the interpretations key people in Mond put on the outcome of Lostock was that if such a change project had been led by managers with real leadership capability rather than by external consultants, a rather more successful outcome would have been the result. Whatever the cause or causes of the demise of the Lostock project in early 1978, by the Summer of that year Bernard Wilson had persuaded the key decision-makers on the Mond board “that we were lacking in conscious leadership skills – there was capability, but it wasn't being harnessed properly and therefore we needed:

(a) to consciously recognise that fact;

(b) to develop a means of creating and deploying such leadership capability.

Having raised the need, Wilson then used his undoubted creative talents as a conceptualiser to put together a management development activity called the Leadership Series. The chairman, virtually all the directors, general managers, site managers, and heads of departments (some 40 people) attended the Leadership Series during 1978/79 with Wilson, Marshall and Campbell acting as designers and trainers. This educational activity, the Leadership Series, plus a framework for thinking about effective management processes and structures on a manufacturing site known as the Lostock Management Model, may be considered as two additional pieces in the jigsaw; two other pieces of preparation in readiness for the events of 1979 and beyond.

The Leadership Series is interesting because it develops a view of leadership way beyond leader-subordinate relations behavioural styles, and tries to place leadership processes within an appreciation both of individual knowledge and experience and business strategy and context, and environmental trends. The key variable pinpointed for development is the individual's thinking capacity within the above broad perspective on leadership. The hope is that improvements in individual thinking capability will lead to more effective leader behaviour.

Individuals interviewed in this study, while on the one hand saying that the quality of management thinking in Mond has been raised, find it difficult to explain how and why. A director commented:

Wilson raises the quality of thinking going on – how he does it I'm not quite sure. Some of his stuff is extremely difficult to comprehend but by designing settings for discussion he raises the plan and the questioning.

A senior member of the Mond board said “my reaction when I went on the Leadership Series was I've never heard such a load of balls in all my life. We all went through that phase.” Other people talked of the Leadership Series being “too abstract, there weren't enough back connections”, of it “being extremely difficult, hard to understand”. Someone else said he recognised the improving of the quality of thinking objective “but what about outcomes, the practical side – I want to see evidence that in practice it helps.” A senior manager captured a general view in saying the Leadership Series course:

Was a very, very intense and mind-stretching week's course full of Pacific English and jargon of the worst possible kind which is very, very difficult to understand. Explaining how thoughts work establishing a conceptual approach to hang-ups one has in dealing with people. Describing a process for asking the right questions about change.

The difficulties with the Leadership Series raise a general point about the use of gifted outsiders – their management in effect to maximise the chances of their contribution being picked up and used. Nicholas Mann noted that over the years he had chosen to more deliberatively manage and protect Wilson:

It is partly a question of me spending more time with Wilson, but also focussing him in on areas of work where people could achieve and see beneficial results, and shielding him from other projects and people.

What in fact began to happen after Lostock was that Wilson focussed in more and more on relationships with a very small number of key people on and just below the board. This strategy was complemented by the interpreting, translating, and practical focus supplied by Mann in his work with others on the Mond Management Model, and by Marshall and Campbell using educational events to link the Mond Management Model and Wilson's thinking down into the division. Campbell explains:

From late 1978 onwards Marshall and I have dedicated ourselves to translating the abstractness and diffuseness of Wilson's approach. We said if we are to get the application of the Wilson ideas we need a different way of doing that than the Leadership Series. But how could we apply them without losing their quality?

In fact what happened was that Marshall and Campbell developed two more concrete and practical educational events. One of these, called “Leading Change within a Works”, which started in 1980 and up to the end of 1982, had involved over 600 people from four works. The other, “Leading Business Improvement”, draws its audience from monthly staff in marketing, sales, accountancy and from those managing particular products, and has similar change and productivity objectives as the works course. These educational events have had a very important role in linking the purposes and aims of the top management system to the particular contexts and management skills necessary to motivate and give confidence to middle managers attempting to create change.

Circling back in time again to pick up the board development activities, real doubts were emerging in late Spring of 1978 about the value of the board-and works-based development work. These doubts were expressed at board meetings and they forced Nicholas Mann – then the Division Personnel Director, to take up a much more up-front position in drawing together the threads of what had been happening and trying to structure up further agreement on strategy for management and organisation development. Board meetings in April and May 1978 clarified that the Coverdale work would be continued, that Wilson would be launching his Leadership Series, and that “our aims should be that managers understand what the board has been doing and see it as sensible, and that managers do not see this as the latest imposed central initiative”. The particular strategy proposed mentioned that there were to be no more experiments or “window shopping”, that the developments should “be management-led”, and focus on “total business development rather than simply on personnel development”.

Shortly after these board deliberations Mann encouraged the Lostock Works management to consider what form of organisation and management processes would have to be created in order to produce an effective manufacturing unit serving a particular business or businesses. Faced with this question the works manager, and the two assistant works managers of Lostock Works assisted by Wilson and Marshall, helped to develop the Lostock Management Model. This model and its development and sharpening under the guidance of a team led by Nicholas Mann to produce the Mond Management Model, was to play a crucial justifying and enabling role in the changes still in the wings but ready to appear in 1980.

Briefly the Lostock Management Model suggested a works could be understood as requiring five discreetly different activities or processes, for each of those processes particular concepts could be developed to guide the performance of those processes. The five processes were:

1.  On-going activities such as plant operation, cleaning, and maintenance which would normally be carried out by weekly staff.

2.  Improving the on-going activities concerned with improving the way in which on-going work is done, including managing the variances when this work is to be done. These activities would rarely have a long time horizon and would normally be carried out by supervisors.

3.  Adapting activities which involve, for example, work of a longer time scale such as introducing new technology or equipment into a works. Plant managers who would do this kind of work should guard against slipping into improving activities.

4.  Business linking activities concerned with marshalling and adapting resources and services in order to satisfy business demands.

5.  Improved thinking activities are concerned with broadly understanding environmental trends and business and technical demands and ensuring that the overall capability of the system continually develops to meet those demands. This role would be performed by the works manager.

This way of thinking in terms of activities and guiding concepts for those activities was quickly picked up by Nicholas Mann who asked the question can this be applied to the division as a whole rather than just a works, and if so what does that mean in terms of the future structural configuration of Mond Division? Fortunately that question was posed not only when there was the basis of providing an intellectually coherent and practical answer to it, but more importantly still when the division did at last have a business need to have the question asked and answered. The meandering was over.

Top–down change

Frank Bay's retirement in 1979, and his replacement as chairman of Mond by Mark Warwick, coincided with “a kind of collapse of the business” – although in fact that bad financial results did not show up clearly until 1980. There was a more or less immediate stepwise change in the use of developmental thinking – the vehicle finally snapped into gear. A senior manager reviewed the contributions of Woodburn, Bay, and Warwick to creating change in Mond in these terms:

The enormous difference from the past was Warwick actually saying “right we're actually going to move towards that”. Woodburn generated enthusiasm to get things going, Frank let them continue, but never said “we’ve got enough data, now here's where we're going to go”. Five years ago OD was optional based on an individual managers’ predilections. The chairman is now saying here is the direction we're going in, there will be differences in the way to get there from place to place, but these are the Mond principles.

With due modesty, Warwick confirmed his part in the above process:

The most recent stage since I have been in the Chair have coincided with an abrupt change in the overall business scene and the immediate focus on the business imperative to a degree we hadn't previously; I emphasise not because of any brightness of mine but because the needs were pressing in on us.

The ingredients that created the changes in organisation structures, employee numbers, systems and procedures, and management processes which began in 1980 are as follows. The first ingredient, and necessary one, was the change in the business environment and the clear recognition therefore of the need to run the division's business activities more effectively at substantially less cost. This need was recognised and defined at the top of the division and clearly stated in terms of change objectives which were communicated effectively to levels below the top. The division was therefore under no doubt there was now the political will to rapidly bring about the desired changes. Another critical ingredient was the creation and effective communication of a framework called the Mond Management Model which provided a guiding set of principles to help managers reach change objectives in particular parts of the division. Finally, the economic recession provided a change in the power balance between management and the unions, which afforded managers both the opportunity and confidence to apply any capabilities in leading the management of change processes which they had acquired through experience and training.

A director described how some of the above elements combined to give force and impetus to the desired changes:

It was obvious in the division what was going to happen with the change in exchange rates. In the end you had to put some figures on it and say we've got to do something dramatic. The prices will be determined externally, what we need to do is reduce costs.

We set and articulated some pretty challenging targets, we'll get the division down to such and such a number – this was the key to survival. The board made this clear to the line.

Charity had to begin at home, we reduced the size of the board and took out all the assistant works managers. It immediately became clear to the weekly staff. “By God this must be pretty serious look what's happening to the managers!” We shared the business situation in general across the division, and in particular businesses – scene setting with employees in broad and particular terms . . . We made it known early retirement terms were available. We asked for manpower-–cost options for every site and department. The board put on the pressure and agreed with each unit what the targets were, and it went on and on and on, and we kept on refining the targets . . . The key thing that enabled it was a good deal of very clear top leadership. It was clear thinking in relation to the management model, applied in a fairly dramatic way at board and senior management levels.

A manager in a works environment described how he saw the above process from below the top and looking up:

It happened because of business pressures. Secondly I was convinced, persuaded it was the right thing to do. I didn't used to believe cost reductions were necessary – now I could see the need . . . Employee costs to added value, the graph for 1964–79 shows employee share of the cake gradually going down after 1979 the employee share was rising like mad . . . I remember Frank Bay saying to the Division Committee before he retired – very tentatively. “The numbers are too high, they'll have to come down by 10% perhaps.” That was quite a thing for him to say – you could tell . . . By 1980 the data was being put in, plus the conviction of the guy telling me the information, that had a lot to do with persuading me. He was convinced we had too many layers – we were sloppy, and he didn't exclude himself from that . . . Warwick started off by setting arbitrary targets, and actually saying they are arbitrary. There's much more openness about business information by the way, more training about business information, more understanding about the business.

The importance of the changed business context was reaffirmed by a director who noted the change in managers’ attitudes even in a year:

When I'd tried this 12 months previously [to make productivity changes] there was no business imperative and they said “he’s up to his old intellectual business again” – no commitment. This time it was different – they acted. They came out with a view that we could easily run this business with 600 less people out of 3000. In fact it became 739 less out of 3000.

As I hinted earlier, the developmental stream made three major contributions to the on-going changes being made in Mond. One was through the long process of trying to unify the perspective and actions of the Mond board; secondly, by creating the Mond Management Model, and thirdly by helping to raise the capability and confidence of the Mond managers to effect change.

The Mond Management Model appeared out of a task force led by Nicholas Mann, and comprising a number of senior business and functional managers. To his credit, one of the first board responsibilities Mann suggested could be combined was his role as Personnel Director. Not without some scepticism at the time, however, Mann stayed on the board for a further 15 months as Director of Organisation Change. One of Mann's board colleagues later said “one of the best decisions we ever made was to appoint a Director of Organisation Change”.

Mann included on his task force Felix Hudson, who had been moved into Lostock Works as works manager to reassert management authority when the Lostock cell-room experiment was starting to get out of hand. Subsequently Hudson had combined with his two assistant works managers and external help to produce the now increasingly influential concepts contained in the Lostock Management Model.

Work on the Mond Management Model began in January 1980. Mann's task then was to “develop within management a common, shared understanding and agreement about how to think about upgrading business performance through the more effective functioning of the organisation”. The framework developed during 1980 by Mann's task force is seen by many in the division as a coherent mechanism to guide changes in organisation structure, but it in fact deals with the interconnections between structure, systems and procedures, and management processes and is still evolving and being implemented in 1983. It's most tangible and understandable form is in dealing with structure and systems. The diffuseness and abstractness of the way developmental processes are conceived in terms of the quality and orderliness of thought, although in a sense exemplified in the creative structuring of the Mond model, is at a level of theoretical discourse that many in Mond find difficult to relate to.

Central to the idea of the Model is the desire to provide Mond's businesses with the most cost-effective management system necessary to identify, achieve and maintain the most advantageous relative competitive position for Mond. This is to be achieved by much clearer, sharper and more distinctive contributions and roles throughout the organisation – for instance, through the different roles of business units, services and manufacturing sites; though a clear, new definition of levels in the management hierarchy pointing to a maximum of five within the division; wider spans of control; clearer and simpler reporting and communication channels and a much broader concept of business planning.

The critical feature of the Mond Model in change terms has been the role it has played as a concrete mechanism to legitimate, guide, and structure organisational structural and systems change. A specialist manager explained:

The key thing was a refinement from an intuitive view by the Board we were overmanaged through 2 important intellectual props that gave impetus to it. One was a general sense throughout the management system that we couldn't afford the number of people we had, and that was related to the financial situation we were in – and that was communicated warts and all. And secondly there was this conscious attempt to produce an intellectually acceptable model against which you could reflect your organisation, as opposed to you must cut numbers by 25%, go and do it . . . It has produced a general model to act as a unifying concept. It shouldn't be used as a totally prescriptive straight jacket, but my goodness doesn't it force your thinking into what you need to have and what you don't need to have.

Table 28 sets out the manpower numbers in Mond Division since its creation in 1964 until May 1983, when the effect of implementing the Mond Management Model and other structural and systems changes was apparent. The Table indicates both around 48% reduction in monthly and weekly staff numbers between 1964 and 1983, and how large a proportion of those manpower changes have taken place in the last 4½ years. During the period 1964–79 the structure and business activities of Mond remained relatively stable. However, during the period 1 January 1980 to 1 January 1983 a number of significant structural changes took place and several of these significantly affected the total numbers employed in the division with the result that comparisons involving the numbers for this period might be misleading. Between January 1980 and January 1983 Mond gained 436 monthly and weekly staff by acquiring Burn Hall Works from Organics Division, and lost 1098 staff because of the transfer of Bain Works to Petrochemicals and Plastics Division, and Cassel Works to Agricultural Division. In that same period Mond also lost 580 monthly staff who were transferred to the newly created ICI Engineering organisation. In total, therefore, between 1 January 1980 and 1 January 1983 Mond had a net loss of 1242 monthly and weekly staff because of structural adjustments within the ICI UK organisation.

TABLE 28 Mond Division manpower numbers, 1964–83 (May)

Year (end)

Monthly staff

Weekly staff

Total

1964

6907

13,137

20,004

1965

6673

12,707

19,380

1966

6598

12,560

19,158

1967

6263

12,026

18,289

1968

6257

11,852

18,109

1969

6223

11,837

18,060

1970

6238

11,561

17,799

1971

5993

11,129

17,122

1972

5690

10,579

16,269

1973

5557

10,445

16,002

1974

5602

10,368

15,970

1975

5757

10,285

16,042

1976

5656

10,247

15,903

1977

5692

10,306

15,998

1978

5793

10,378

16,171

1979

5688

   9996

15,684

1980

5504

   9632

15,136

1981

4826

   8380

13,206

1982

3775

   7712

11,487

1983 (May)

3523

   6862

10,385

TABLE 29 Mond Division manpower numbers end 1979–83 (May) allowing for ICI UK structural changes

 

Monthly staff

Weekly staff

Total

1979

4808

9182

13,990

1980

4527

8529

13,056

1981

4055

7670

11,725

1982

3604

7139

10,743

1983 (May)

3523

6862

10,385

In order to reflect a more accurate picture of the effect of the Mond Division's manpower reduction programme, Table 29 presents the number of employees that the division would have employed from year end 1979 to May 1983 if the division's structure and production activities had been as they are now, i.e. including Burn Hall Works but excluding Cassel and Bain Works and the Mond Division Engineering Department. The Table illustrates that the overall numbers reductions that can be attributed to Mond management from end of 1979 to May 1983 are 26%, the percentage drop for monthly staff being 27%, and weekly staff being 25%. Taking into account the ICI UK structural changes, Mond have reduced their senior staff population from 270 on 1 January 1980 to 160 by May 1983. The figure of 160 is expected to drop to 125 by the end of 1984. As reported earlier in this chapter, the Mond board has dropped from the September 1978 position of having a chairman, 2 deputy chairmen, 5 product group directors, and 5 functional directors – a board of 11 in all because 2 of the directors shared a functional and a product group role, to the May 1983 position where there is just a chairman, 2 business directors with 2 business areas each, a technical/personnel director, and a commercial services/finance director – 5 people in all. The expectation is that the present board of 5 can be reduced to 4 in the next year or so.

Below the board, the present situation is that within each business area a single general manager is now responsible for all of that business. In addition a number of production works have been merged to form larger manufacturing sites with a single site manager having overall responsibility, and the role of assistant works manager has all but disappeared. Mergers have also occurred within Mond headquarters functional departments.

Such are the practical outcomes that can be achieved when there is a marriage between environmental pressure, internal business need, political will, an intellectually coherent and practical framework to connect with simply stated and well-communicated change objectives, and of course a change in the power balance between management and management, and management and union, and the managerial skill in creating change to exploit the window for change opening, and opened.

Some consequences and implications of the post-1979 Mond changes

By the end of the 1981 financial year one desired consequence of the post-1979 Mond changes was being realised – the division was saving around £40m per annum in fixed costs. In a situation where the Mond board could not reduce the value of sterling, could not on their own persuade the Thatcher Government to reduce bulk tariff electricity prices, could not alter the structure of bulk commodity chemicals prices by taking out sufficient of the European overcapacity, the Mond board took control where they still had control and pulled the fixed cost lever. This £40m was the difference between breaking even and not breaking even in 1981 and 1982.

The skill with which the exit of so many monthly and weekly staff was managed is clearly an important issue in terms of the attitudes of staff that remained and ICI's reputation in Cheshire and beyond. Given that the structural and systems changes in the Mond Management Model were hoping to achieve not just sharper business focus, clearer distinctiveness between reduced management levels, and clearer accountability for managers in enlarged jobs, but also the kind of cultural changes which would mean appropriate behaviours would be in place to enable 30% fewer managers to run the Mond business more effectively – then it was important that the overall change process did not end up as short-term concern with efficiency leading to a medium-term loss of effectiveness.

The extent to which Mond is able to put in place a culture which is reinforcing of the structural and systems changes will take some time to elucidate. Whether also Mond will pay a price in terms of reduced commitment and motivation from those who remain because of the numbers reductions of 1979–83, is a question this study could not begin to answer at this point in time.

Mond like other ICI divisions have had available the large carrot of the ICI voluntary severance arrangements. For someone in their mid-50s with a large number of years service, the severance terms have often meant a lump sum and a pension which could produce an income level after tax not far short of what they were earning on the ICI payroll. For the 50-plus age group it could be said ICI have bought their way around the problem. Below 50 there is a problem as exit then means deferring a pension until normal retirement age. It is not so obviously in the individual's self-interest to leave ICI if he or she is below 50, and notwithstanding no enforced redundancy policies, undoubtedly over a period individuals in the 30 to 50 age group have been pressurised to go. Mond have put a great deal of effort into counselling training and other practical help to assist individuals find alternative employment. In the period 1981–83 67% of senior management staff got alternative employment. The expressed view was that a fairly high proportion of the remaining 33% were in the financially safe 50-plus age group and probably weren't looking for employment anyway.

Putting up a simple losses and gains equation, one potential loss to Mond, given that they are the major employer in an area of very high unemployment, is some slippage on their reputation as a caring employer. There may also be some loss of morale amongst the survivors, a hardening of attitudes, a feeling that “this isn't the sort of company we thought we were joining”. Mond undoubtedly have cut down on, but certainly not eliminated, new graduate recruitment. The level of present recruitment may be below the level for the division's longer-term needs, and there's always a risk of a diminution of potential management talent in younger age groups. In 5 or 6 years time Mond may find itself somewhat devoid of talent in the younger age groups.

If the above losses are of the mays and might be's character, what certainly isn’t, is the fact that the structure of career opportunity in Mond has substantially changed as a consequence of the post-1979 structural changes. With a board of 4 or 5 instead of a board of 12 or 13, merged departments, and reduced numbers of levels in the structure, as a matter of fact opportunities for vertical mobility are less. Given the calibre of people that have traditionally entered ICI, and the expectations and aspirations that group have, how Mond tactically and ethically handle this career problem will have a substantial impact on the kind of culture in the division, and the levels of motivation and commitment of individual managers.

A related question is the problem of how to equip people with the necessary skills, experience, and perspective to operate from a business-driven rather than a functionally driven structure? As the pendulum swings in Mond from technical–production to business–marketing, it is all too easy to assume both that only those with a marketing background can operate in the newly created business general manager positions, and all too easy for the commercial people who move into those roles to interpret them as “super-selling jobs”, when in fact they are key linking jobs integrating market, financial, technical, production, and man-management considerations.

On the gains side, after the traumas of the past few years, there are no shortages of positive evaluations from the Mond Management System. Having managed to reduce the size of the Mond board largely but not completely by natural wastage, there is a clear view there both that “functions are more sharply differentiated” and that “small groups tend to work much better than bigger ones”. A senior member of the board felt that there are “sharper management standards all around”, and “we’re much more disciplined in our use of each other's time”.

I have had to be brought up very sharply to realise that in a slimmer structure, there's no good asking for that information, you won't get it, and in any case you don't need it – you shouldn't have asked for it in the first place. There's a learning process for everyone in the system to go through of that sort.

The sharper management standards are leading to “more objective performance measurement than ever before, and if people aren't measuring up they are told much earlier in their career than previously, and at a stage when they can do something about it”. Because of the much clearer and better articulated distinction of roles, “people are clearer what they have to do in their work group”, there's “less duplication”, less of “people sitting on each other's toes”, and the “nice to have rather than need to have activities have disappeared, or are disappearing”.

Broader claims are also being made that:

People have a much stronger shared and agreed view of what the system as a whole is trying to do. It's purpose and what their purpose is as part of the whole. All that induces in people a much stronger confidence in terms of what to do, and how to do it. Confidence if I push down this path, it will be compatible with and supported by other folk around me.

I do not have the data to support or contradict the above claim, and indeed it is probably too soon yet to find valid information to verify such an outcome. What is clear is that the ethos of survival which has been the prime source of legitimacy for so much management action since 1979, has quite superseded its predecessor the ethos of growth as the ideology to engage management commitment and action. One wonders if the survival ethos will have a life cycle similar to the growth one, and if so what ideology will replace survival, if and when survival is assured.

One also wonders whether the halting, meandering, some might say inefficient process of connecting developmental thinking and resources to issues of structure, systems, culture, and management processes in Mond, needed to be as meandering as it surely was? But before returning to try and answer that question using experiences from a variety of ICI divisions, there is the equally meandering process of the ICI main board's use of developmental resources to consider. That is where we go next in this book.

1 However Marshall was retained as an active external consultant to the division.

2 The early lack of success in using the Eastbourne-trained change agents in Mond, may have been one reason why Mond did not involve itself in Dudley's internal OD network during the remainder of the 1970s. Mond essentially went their own way.

3 There had been a works managers’ group in existence for years in Mond but the above events considerably strengthened and made more purposeful works managers’ meetings.

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