by Atul Hatwal
Charles Allen, welcome to the spotlight. You might have thought you were already high profile, after all running ITV and EMI made you a fixture in the business pages. And your turn on Channel 4’s the Secret Millionaire was genuinely touching.
But all of that is as nothing compared to what you will experience as chair of the Labour party’s executive board.
As you start your new role, you should be aware of the two pitfalls that perennially await ingénue businessmen keen to apply their acumen to the political world.
First, what works in business does not apply in politics. Second, the media are coming.
Politicians frequently muse about how good it would be to apply business practice to politics and improve efficiency. They do this because they have never worked in business, beyond perhaps a temporary sinecure in public affairs en route to a parliamentary seat.
Most politicians can barely run a bath, let alone any form of enterprise. Executive management as you understand it is almost non-existent. Just look at the how Labour party restructure has been managed so far.
But politicians are not an untalented breed and there’s a reason they have evolved in a particular way.
In business, all relationships are underpinned by money. Whether its shareholders and their dividends, employees and their wages or suppliers and their fees, power is held by the he or she who holds the purse strings.
In politics, most things that matter are based on goodwill.
All those good people knocking doors and delivering leaflets? Free. The trade unions and businesses that donate funds to the Labour party? As good as free.
Len McClusky might be about to change that, but for all the millions of pounds that Unite have given the party in the past year, what have they actually got in return?
Even your truculent staff at Labour HQ. Pay rates in all political parties are extraordinarily low given the hours and effort expected as a minimum.
Despite politicians’ manifold failings, when it comes to nurturing relationships where sane adults work ridiculous hours in pursuit of lost causes for little personal return, their skills are unparalleled.
So when switching codes from business to politics, beware: your version of command and control will wreck relationships.
What is called leadership in the private sector, driving change at the point of a corporate gun will make your people feel deeply unloved. They will find better things to do with their spare time. You will come to exemplify all they came into politics to change.
And the organisation will surely grind to a halt.
This isn’t just an affliction of the sensitive souls within the Labour party. If you want a case study, take a look at what happened when Michael Howard became Tory leader and parachuted a range of bright corporate things into the Conservative operation.
One example: In 2003, Will Harris former marketing director of O2, arrived to revolutionise the Conservative brand and marketing set-up. Nine months later, after his department virtually went on strike, he was gone, complaining of a “flawed, amateur and imperfect system”.
Unfortunately Charles, things haven’t got off to a good start. You were responsible for the report that restructured the Labour party. It would have seemed obvious to you that the leader needed to have full control of the party.
Have a read of Peter Watt’s piece for Uncut yesterday to see what happens when a leader’s office becomes too powerful and the checks and balances at the top of the party are removed.
Time is needed to learn how politics and business differ, if the distinction can actually be learned at all. Many businessmen cannot change their mindset. But time is not something you have because of the second problem faced by businessmen in politics: media vetting.
In the corporate world, there is a very simple metric for success – profit.
Politics isn’t like that.
Outside of elections, hard results are non-existent. This empty space is filled with a concatenation of polls, media speculation and the twittering white noise of the crowd.
Process assumes a new importance. What you achieve matters less than how you do it.
Your role as a senior adviser at Goldman Sachs is already well known, but here’s a hint at what some journalists are already looking at: executive pay.
Back in 2003 as chair of the Tesco remuneration committee you helped sign-off a package that led to an unprecedented shareholder revolt.
Then there was the shareholder anger at your pay deal when Granada took over Carlton to create ITV plc.
And as departing chief executive of ITV in 2007, having presided over a disastrous slump in revenue and share price, you were in the fortunate position of being paid £5.5m as a golden goodbye. Again, some very cross shareholders.
So this is how it will go down in the next few weeks.
First Ed Miliband will be asked his opinion about whether he thinks being paid £5.5m for taking a company off a commercial cliff is an example of good corporate governance.
He will obfuscate and maybe muddle through after some uncomfortable press conferences where this topic dominates. Maybe.
Then will come the tax questions.
As with all executives you will have quite rationally and legally minimised rather than maximised the tax liable on your remuneration.
Some bright spark will calculate what you should have paid, had it all been PAYE. And so Ed Miliband will be asked whether you did or didn’t. He will be asked whether he thinks you should have paid the full amount.
Initially the defence will be that this is a private matter. But that will soon be untenable when the words of countless Labour press releases on cracking down on tax avoidance are hurled back at Ed and Labour’s trade and industry team.
Then the panic will set in. You will be under pressure to disclose your tax arrangements. The media will obsess about it. Ultimately you will and when it emerges you have been tax efficient, Ed will be asked to condemn you.
His competence will be questioned in appointing you and in the end you will wonder if it was all worth it.
No, it’s not right. And yes, it does reflect badly on our politics. But this is the reality of life in the Westminster village. It’s why businessmen rarely thrive in politics. It’s life in the spotlight . Welcome.
Atul Hatwal is associate editor at Uncut