Diageo, Brand Management and Shell and BP

Interesting article on Diageo in The Times today. The brand management model they have seems effective. The trading title of a multi brand conglomerate is not really important and only really of significance to investors. The general public does not know or care that Guinness is part of Diageo – as with Unilever or Proctor and Gamble the corporate trading title is pretty much unknown to the domestic consumer.

Consumer brand driven corporations can apply good brand management principles to all of its products. The alternative approach, using the corporate brand on all its product and service offers (as Richard Branson did with Virgin) has its benefits but is much riskier. A problem in one area can damage the brand overall.

Diageo has economies of scale which means it can demand good deals from suppliers. It’s an impressive model allowing brand additions or deletions based on performance and prospects. It’s also good for employees who can broaden their experience by moving from one brand to another under the company’s umbrella.

The world of oil and gas, in which I worked for forty years with Shell, has always been mostly a mono-brand operation. That said my first employer, Shell-Mex and B.P. , had quite a few consumer brands – Shell, BP, National Benzole, Power among them. This added value I think. But later Shell failed to establish a Convenience Store brand under the “Select” brand name. This is quite an interesting brand management story.

The image on the top was what we tried to do in the 1990s. The image was “foody” rather than “oily” because Convenience stores were predominantly food item retail outlets. So though located on Shell branded petrol stations the idea was that we had to persuade the customer that we had an authentic C-store offer. Food basically. The problem was that we didn’t invest in the brand.

In most markets little or no advertising money was spent building the “Select” name and identity. The basic idea was a good one, but you’ve got to give the customer a reason to believe – and we didn’t do that. Over time the distinctiveness of the “Select” brand faded away and it became corporatised as Shell. The lower image shows where, in some markets, it ended up. “Oily” again.

The new model adopted by the oil companies is to partner with established C-Store operators and brands like Marks and Spencer. This I think works well for BP . It’s not multi-brand like Diageo – BP does not own or even manage the M&S brand on its sites. But the hosting arrangement seems to work well and for the consumer the brand offer is clear. BP under the canopy, M&S in the shop.

On Senegal…

It was thirty years ago that I went to Dakar in Senegal. It was a business trip in respect of an international Shell project that I was managing which, to my great delight, took me literally around the world many times. In Dakar I did some work with Shell Senegal and also chaired a meeting with representatives of many of our African companies. It was a delight.

The GM in Shell Senegal was a Dutch friend of mine Gerrit. He was very able and also he had a growing affection for all things African. An ideal posting. He had arranged a special trip for us all on the final day to the Island of Gorée. UNESCO describes the island as follows:

Gorée

“The island of Gorée lies off the coast of Senegal, opposite Dakar. From the 15th to the 19th century, it was the largest slave-trading centre on the African coast. Ruled in succession by the Portuguese, Dutch, English and French, its architecture is characterized by the contrast between the grim slave-quarters and the elegant houses of the slave traders. Today it continues to serve as a reminder of human exploitation and as a sanctuary for reconciliation.”

We were a mixed party with Dutch, English and French as well as people from English and French speaking Africa and our Senegalese hosts. We were silent during the visit both those like Gerrit and me who could be seen as being descended from the oppressors and our African colleagues who had kinship with those who had been enslaved.

This was not a time for reconciliation – that had in theory happened long ago. But it was a time for reflection. Thirty years on the visit is still very vivid to me. My position on the iniquities of Empire has never been one of hand-wringing. That helps nobody. But I fervently believe, however, that we should confront our past by being more actively open about it.

The Island of Gorée is a UNESCO World Heritage Site. There are hundreds more around the world. The past may be a foreign country but we can also, surely, learn from it. To stand where once a slave stood in chains is not an act of contrition but a moment of learning. As Einstein said “Once you stop learning you start dying”. Amen to that.

An open letter to Sir Keir Starmer

Dear Sir Keir

Sixty years of following politics fairly closely has made me understand the truth of Otto von Bismarck’s oft-quoted remark that “politics is the art of the possible, the attainable — the art of the next best.” The political world is tempestuous and dangerous and it requires skilful navigation to survive it. Our last four Prime Ministers were not beaten by the electorate but by their own failures of navigation and by their inability to apply Bismarckian pragmatism.

So I understand why you feel the need to go against what you must know to be true – that Brexit has been an unmitigated disaster for Britain. It’s no surprise that since David Cameron was brought down by hubris over his Referendum failure his three successors have also been sucked into the vortex of danger and not survived. In all four cases it was attempts to do the impossible that brought them down. Each case was different, but there was a common theme.

You know, and I think you’re right, that if you give the utterly unprincipled Conservative Party a sniff of an opportunity to label you as the Remainer that (of course) deep down you still are, your chances of getting rid of them in a General Election would almost certainly be fatally damaged. This is not because the country is still predominantly a “Leave” place – there are plenty of signs of a shift in public opinion. No the reason is that it would be an open goal which would fundamentally change the character of the Election debate and we’d be fighting again the binary “In versus Out” battle that dominated or politics for too long.

In 2024, unless there is a dramatic shift, you should become Prime Minister. I hope that you do. Labour’s manifesto will be a struggle to put together, though, if it relies in part on your telling the electorate how you’d “make Brexit work”. You know that if this was possible the nation over the past six years would have found a way to do it. The Labour Party would have a plan and would have told us about it. You have no plan, and you know it, and you know that you won’t suddenly find one. There’s more chance of finding life on Mars.

I am disappointed by the strength of your above referenced statement because , frankly, I’m tired of being lied to. Of course there is a case for going back into the EU. That case is being made eloquently daily by many of us. Of course there is a case for returning to the single market and the customs union. Countries like Switzerland, Iceland and Norway (not in the EU) benefit from doing this all the time. They are not fools.

Of course there is a case for the Four Freedoms, including that of Movement. British citizens are uniquely disadvantaged by restrictions on our movement and employment that citizens of no other European country have to endure. And, what’s more, our public services would hugely benefit if we can welcome workers from 30 countries again. Why on earth would we choose to perpetuate this absurdity?

Yes there is a xenophobia still around in Britain that has led us to close our doors, abandon free trade and destroy participating in the across Europe cooperation that every other country benefits from. But leaders are supposed to lead not follow and certainly not follow the isolationist tendency if it would lead to further damage to our economy and our reputation. Which it will. Stand up for what you believe in and what is right. Make the case Sir Keir.

Yours Sincerely

Paddy Briggs

A failing faux-democracy or a benevolent dictatorship? I know which I’d choose.

“…It is not merely shocking but tragic that 61 per cent of young people in the UK would prefer a dictator to a democratic leader.” Matthew Syed in the Sunday Times praising the virtues of liberal democracy.

One of the best governments I ever lived under was not a liberal democracy, actually it wasn’t a democracy at all. All the liberal freedoms were in place – the press, assembly, speech, worship and the rest. The Leader was benign, able, professional and his administration was competent and respected. But nobody has ever voted for him. When the Leader died unexpectedly the people were openly weeping in the streets. The Leader was Edward Youde , the Governor of Hong Kong.

The Hong Kong government in the 1970s and 1980s virtually eliminated corruption where it had been rife, especially in the Royal Hong Kong Police. They constructed hundreds of thousands of homes for a growing population swelled by refugees (aka “Asylum Seekers”) escaping from the horrors of Mao’s China. They built a highly efficient metro system, two tunnels connecting Kowloon to Hong Kong Island and started work on an amazing new airport.

The important Financial Services sector was loosely regulated and there were occasionally probity issues but it mostly worked. Taxes in Hong Kong were low but the buoyant economy funded the huge construction projects and world class education and healthcare. Effort was rewarded, but there was adequate provision for those in need. Compare the benevolent dictatorship that was late colonial Hong Kong with the shambles of our “liberal democracy” in Britain today!

What is a woman?

In the distant days when mums and dads didn’t know the sex of their foetus until it became a baby on birth it was often the midwife’s task to give the news. “It’s a boy Mrs Briggs” she said as I emerged into the light that cold November day in 1946.

Now that identification didn’t require too much examination. The telegram was sent to my Grandma “Arrived safely with tassel” it said. And that was that.

The vast majority of us settle without too much difficulty or thought into the biological sex that is apparent as soon as we are born and is obvious from physical and physiological features including chromosomes, gene expression, hormone levels and function, and reproductive/sexual anatomy.” [Canadian Institute of Health Research] (CIHR). We are not “assigned” a sex as some put it, we are a sex and that doesn’t change.

Whilst sex is predetermined that does not mean it is comfortable for all of us. That the vast majority of us accept our biological sex does not mean that we all do. This is where the idea of “gender” as separate from biological sex becomes useful. Gender “…refers to the socially constructed roles, behaviours, expressions and identities of girls, women, boys, men, and gender diverse people. It influences how people perceive themselves and each other, how they act and interact…” (CIHR)

None of us can change our biological sex but we can change or modify the gender we attach to ourselves or wish to be perceived as. Jan Morris described this feeling as follows: “I was three or perhaps four years old when I realized that I had been born into the wrong body, and should really be a girl. I remember the moment well, and it is the earliest memory of my life.” Morris began transitioning to life as a woman in 1964 at the age of 38.

Morris, who I had the pleasure of meeting back in 1988, had some surgery to underpin her gender choice but neither she nor anyone else claimed that this or her gender choice changed her biological sex. When I met her she was perfectly credible and identifiable as a woman. She had adopted the female “social construct” and it was not controversial in any way, She was a woman.

So why is the subject of sex and gender so controversial and why is there so much heat around it? My view is that it is necessary to accept that biological sex is a given at birth but that gender is a personal choice. If I or someone close to me or a complete stranger for that matter wishes to transition from one gender to the other gender that’s almost entirely their affair and society should not only allow it but recognise it formally.

When I say “almost entirely” it is important to identify what this means. Sport is a good place to start. The only sports that are not divided into separate male and female competitions are those where the physical advantages that a man has over a woman, mainly to do with characteristics like strength and speed and height, don’t count. Showjumping and other equestrian events are the obvious example. But most other sports should not permit women whose biological sex is male to compete. This is common-sense.

That we accept women who were previously men as women (and vice versa) is humane and decent. But there is a sensitivity here in certain environments like changing rooms and bathrooms which needs sensible handling. This is something that transgender people are generally aware of I expect.

There are no stigma attached to being transgender. But equally the “physical and physiological features” of a trans person are different from those of the same gender who have chosen the gender that equates to their sex. If we all accept this fact and act accordingly surely that will take the heat out of the subject ?

Truss and Kwarteng charged in like an ideological bull in a china shop

Lord Hague (The Times today) may recall from his brief time in Shell that we used to refer to the Corporation as a Super Tanker that took quite a long time to change direction. If it was true of Shell how much more true is it of a country like Britain?

In post war times only Margaret Thatcher succeeded in repositioning the nation created in 1945-51. The astonishing establishment of the Welfare State, linked to the taking into public ownership of the commanding heights of the economy, endures to today despite Thatcher’s privatisations.

There needs to be debate about who does what on the margins of the mixed economy – does anyone doubt that our railways need to be better integrated and more customer accountable for example? Similarly the public/private partnership that is the NHS needs a dispassionate examination to find the ideal balance not ideological claptrap.

The new Prime Minister’s fatal error was to think that dramatic urgent macroeconomic action , on taxation especially, was needed. Politics is the Art of the Possible and change needs debate and you need to prepare the public and the markets for it. Truss and Kwarteng charged in like an ideological bull in a china shop. We’ll be picking up the pieces for quite a while.

So now our unplanned and profligate tax cut plans are, surprise surprise, to lead to savage cuts in public expenditure! Well who’d have thunk it ?

The error has been to treat tax cuts and spending plans as if they are part of separate decision systems. They are not. If you want credibility you don’t start with the income side of the P&L but with expenditure. What do we need to spend public money on and then how do we fund it, not the other way round.

Cutting income by cutting taxes could only lead to increasing borrowing if expenditure remained the same. But with interest rates rising servicing this debt soon appeared unaffordable. The three elements of tax, expenditure and borrowings have to be managed together. This is hardly a revolutionary idea.

Truss and Kwarteng once given the levers of power couldn’t wait to start moving them driven by their kindergarten level ideology. To change the basis of our nation’s tax and spend system may be a desirable thing to do. But if you have to sack a highly respected Treasury official to do this there should have been a pause for thought.

The rush to action was also profoundly undemocratic. It took place outside the normal budget cycle, was undebated in Parliament and had the character of emergency decision-making when there was no emergency. Well now there is – with markets reacting as markets do. There is nothing irrational about stock or currency trading – we may not like the wisdom of the market but it’s how it works and always has.

Covering up the cracks with style

Penny Junor’s panegyric is understandable when you realise how little we have to celebrate. Yes it was a well directed and choreographed spectacle showing that we could still do the past with style, but we can’t do much else. Defending our currency, feeding our people, heating our homes, lighting our streets are likely to defeat us this winter.

The long drawn out day of the funeral brought our a well-heeled audience and it must have been galling for Italy’s president to have to discard his Maserati in favour of a bus. The couturiers (Chappelli and Stella Macartney included) must have run out of black silk and taffeta for the mourning apparel.

I was reminded of a Cameron MacIntosh production, well directed and cast with at times a surprising script. The Archbish put Johnson in his place: In “those who serve will be loved and remembered when those who cling to power and privileges are forgotten” he was to the point. The ushers had halted Johnson and his consort’s attempt to barge in. The new King looked sad and bewildered, as well he might, but held it together. As did the confident little future King George.

La Reine est Mort, vive Le Roi. And what a potentially disastrous reign is in prospect.Will Charles feel empowered to intervene as his subjects starve and freeze? As the pound slips below parity and inflation skyrockets? As civil disorder spreads?

Pageantry can be used to cover up failure but I think that was consequential here, though it was convenient. For twenty-four hours and more it would have been churlish and out of place to address the realities of modern life for many. No more.

Will King Charles address the paradox of the fact that four-fifths of us reject the Church to which the State adheres, and of which he is now Head?

“However, more recently [Charles] has travelled to the Vatican for the canonisation of John Henry Newman and to India, to celebrate the 550th anniversary of the birth of Guru Nanak, the founder of Sikhism. These visits and expressions of ecumenical sympathy for the religions of others will only get bolder, now that he is finally able to make the judgments for himself.” Daniel Finkelstein in “The Times’.

The thing about Cardinal Newman, of course, is that he was an apostate moving from the Established Church, of which the then Queen was head, to the Roman Catholic Church. For Charles to attend his canonisation was frankly bizarre. Maybe he felt it was OK to mark the Sainthood of a man who had rejected the Church of which his mother was now head but it was unclear what message was being given.

Charles has always had a fluffiness about religion which his “Defender of Faith” (singular) suggestion illustrates. If you imply some equality in religions you cannot have an Established Church. You can’t with intellectual logic predicate one true religion (the Church of England) and acknowledge the credibility of other faiths as alternatives as well.

Less than one fifth of Britons adhere to the Church of England and even fewer to other Christian sects like Catholicism and the Non-Conformism (see pie chart above). Nearly half of the country has no religion at all. This fact also argues for the disestablishment of the Church.

The American Constitution asserts Freedom of Religion although this at the time it was drafted really meant freedom of Christian worship. When adherents to non-Christian faiths began, much later, to come to the United States the Constitution gave them comfort though that was a bit serendipitous. None of the Founding Fathers were Jews or Muslims or Hindus nor for a century or more were immigrants.

Donald Trump’s Islamaphobia was unconstitutional and shameful and unworthy but it concentrated the mind. Unlike Britain The United States has no established church or religion. The Christian faith is implicit in the rituals and no non Christian has ever been elected to high office. But the Constitution protects all. We are much more singular.

Whilst our formal behaviours are singularly C of E our society is not. Religion is on the decline and secularism is increasingly the norm. King Charles may try and address the paradox implicit in the fact that four-fifths of us reject the Church to which the State adheres.

Those of us who reject all religions should not in any way deny the rights of believers. But in a curious way to view the subject from a secular standpoint can be helpful. To argue freedom of worship and religious equality whilst being a devoted member of one religion is a stretch. To do it when you’re Head of the Church is even more strange !

Farewell to the Commonwealth ?

The pain of losing Empire was considerable to Churchill and other leaders under whom it happened. So a pseudo-Empire was created and called, rather pompously the “British Commonwealth”. It was ersatz imperialism , a gathering of nations that had little in common other than the fact that their citizens had once been subjects of a King or Queen Emperor/Empress in a Palace in London.

The Commonwealth was not designed to be or do anything substantial. It took over the “Empire Games” a quadrennial sporting tournament which the Brits rather liked because we won a lot of medals. A mini Olympics shorn of the best athletes.

The “British” designator was dropped, the number of nations expanded – some even with no British connection. That said there was still little of substance for the countries’ leaders to do other than eat well and exchange fraternal banalities.

The Commonwealth has never been political, and most of its members are republics. It was briefly a trade alliance (“Commonwealth Preference”) but never has the association acted collectively to do much. The countries mostly speak English but they are scattered around the globe. They have British High Commissions rather than Embassies but without collective power or authority the Commonwealth is a Ruritanian anachronism.