Good causes evil: management of the Post Office

In the last few weeks, we have seen ever more senior Post Office employees and advisers in the witness box, answering questions at the public Inquiry into the Post Office Horizon IT scandal. Last week was a “high” point, with three days’ questioning of the former CEO, Paula Vennells (PV).

IP Draughts has been reflecting on the contradiction between PV’s claimed compassion and ethical approach as the leader of the Post Office management team and as an ordained priest (who was shortlisted as a candidate for the vacancy for Bishop of London), and the effect of the actions of that team on the lives of innocent subpostmasters who were variously sent to prison, made bankrupt and had their lives ruined, in at least one case leading to suicide, based on the Post Office’s wrongful actions.

This contradiction, even assuming that one accepts everything Ms Vennells said in the witness box, is startling and counter-intuitive. IP Draughts has come up with a new kind of syllogism:

(a) PV is compassionate and wants only the best for subpostmasters, for her team, and for the Post Office.

(b) A minority of subpostmasters through their public complaints about the Horizon system threaten the future of the Post Office. The nature of those complaints is not susceptible to a quick, simple, inexpensive resolution.

(c) Therefore, the Post Office team (led by PV) must ruthlessly quash the minority of subpostmasters so as to enable the majority of the subpostmasters, the PO management team, and the PO itself to thrive.

This feels to IP Draughts like a bee colony ejecting unwanted drones from the hive, which is apparently a recognised phenomenom – Google it.

In more detail, the logic of this approach seems to work as follows. IP Draughts has tried to reflect PV’s claimed position, as he understands it from her oral evidence to the Inquiry:

1. PV is compassionate and wants only the best for subpostmasters, for her team, and for the Post Office.
2. PV is a managerial generalist, who doesn’t understand specialist subjects like IT, law or public relations, and trusts her team’s advice on what action to take when specialist subjects are involved. Although PV didn’t say this specifically in her oral evidence, she is apparently unaware (though her chairman, Alice Perkins mentions to her something similar) that her team may not be taking as compassionate an approach as she (PV) would to subpostmasters. She is also unaware (as she admits in her evidence) of the huge power imbalance between the Post Office and individual subpostmasters.
3. Some subpostmasters (referred to below as SPMs, though this is only a minority of the subpostmasters in the network) experience unexplained shortfalls in their accounts, as shown on the Horizon computer system. According to the contract with SPMs, it is for the SPMs to prove that they didn’t cause the shortfalls (e.g. by theft) and to make good any shortfalls. Many do so, in some cases paying tens of thousands of pounds to the Post Office that they cannot afford to pay. PV is unaware of the terms of the contract.
4. SPMs are not able to prove that Horizon caused the problems, as they have no visibility of the coding of the Horizon system and are not computer experts, and they are told by the Post Office “helpline” that they are the only ones experiencing such difficulties. PV is unaware that this message is being delivered by helpline staff.
5. PV is also not a computer expert, and trusts her team (IT, investigators, managers, and legal teams) when they say that the SPMs are at fault, have their hands in the till, and that there is nothing wrong with the Horizon system. PV is for many years unaware of bugs in the Horizon system.
6. PV’s team prosecutes SPMs who have experienced these difficulties. PV is initially unaware that the investigation team exists or what is function is (directly prosecuting SPMs for theft rather than referring cases to the police or Crown Prosecution Service).
7. PV is also unaware of the special duties of prosecutors to act fairly and disclose relevant information to the defendants. She is not a legal expert and trusts her legal team to do the right thing.
8. The SPMs complain about their treatment and generate publicity for their cause. They also contact their MPs, who start to ask difficult questions about the Post Office. PV, her chairman and the Board of the Post Office initiate several audits and investigations into Horizon, the SPMs and their allegations, partly as an attempt to placate the MPs. Those audits and investigations reveal problems with Horizon, but PV is either unaware of the problems that are revealed, or trusts her team when they explain away the revealed problems as minor or fully resolved.
9. PV’s team warn her that the results of broad, independent investigations into the above could cause problems for the Post Office, e.g. adverse publicity or duties to disclose the results to SPMs. PV trusts her team’s advice. She is very concerned about adverse publicity, and is prepared to take strong measures to try to avoid it, including using aggressive libel lawyers.
10. PV also trusts her team’s advice that the independent investigators have gone rogue, and takes action to mitigate these problems, e.g. by narrowing the remit of the investigation, by sacking the investigators and taking the investigation in-house, or by cancelling the investigation.
11. PV is unaware of the detail of the independent legal advice that her legal team has received. If she had been aware of it, she would have acted very differently.
12. The net effect of PV’s trust in her team and unawareness of many matters is that she is prepared to approve aggressive legal and management action by the Post Office – against SPMs, and against anyone who says anything that damages the Post Office’s reputation – action that other CEOs might not be prepared to take. Many other CEOs might have less innate goodness than PV but better practical judgement of people and situations.

Thus, a starting point of goodness and compassion leads to ruthless action.

Of course, not everyone will accept PV’s stated position, and this was brought dramatically to light in text messages between PV and her former boss at Royal Mail, Dame Moya Greene. Dame Moya texted to PV “you must have known” and said she could no longer support her.

But even if PV’s position is accepted in full, it reveals an appalling lack of business skills in someone in a highly-paid, prominent business role. How could this be? Surely, a CEO must demonstrate the ability to “get a grip” of the business they run, not just accept what they are told, and find a way of compensating for a lack of specialist skill and knowledge (e.g. by involving outside specialist mentors/advisers). One of the first things any incoming, competent CEO should do is to dig into what each department does, including their legal responsibilities, their strengths and weaknesses, and the risks for the business. They should then weed out dead wood, and bring in competent people. None of this seems to have been done.

IP Draughts wonders whether the Board was dazzled by PV’s marketing skills. These skills were demonstrated in the witness box; whether you like her answers or not, she addressed everything that was fired at her in a mostly composed, articulate, “reasonable” manner, and she didn’t bridle or snap at her questioners. At times, when her voice relaxed, IP Draughts thought she sounded (and this is one for older UK readers) like Dame Esther Rantzen on her TV programme, That’s Life, persuading and inspiring the nation on a serious campaigning topic. At other times, IP Draughts was reminded (slightly) of the stubborn, cloth-eared character from the Harry Potter novels and films, Dolores Umbridge.

These reflections feed into IP Draughts’ view that, when selecting CEOs, Boards should give greater priority to thoughtful, careful, objective personalities rather than flashy types.

More witnesses have yet to give oral evidence. IP Draughts is particularly looking forward to seeing:

• Alice Perkins, former Chair of the Post Office Board
• Richard Christou, former Chair of Fujitsu UK (among other roles) and a former in-house solicitor. Not at all relevant to the Post Office Inquiry, but he has also written books in a similar field to those that IP Draughts has written, including books on boilerplate clauses and drafting contracts.