(I have now fininshed the daily diary entries from the year 2000 - now a few more general pieces I wrote at the time, starting with this "3 months on" update from the June of 2000)
I have always liked the little post-event biographies you get at the end of TV programmes and films sometimes, whether they are serious or light-hearted. I found the "42 Up" programme last year incredibly moving; seeing what has happened to those people whose lives have been followed at 7 year intervals. So the caption saying, "Since this programme was made, Cindy has come off heroin, given up prostitution and is now Under-secretary in the Treasury with special responsibility for European compliance issues" is always a great way of rounding off things.
So perhaps I should do the same here. What has happened in the few months since the diary ended? Well, Bernard Horn was selected for the Euro 2000 squad and scored a hat trick in the final against Germany. Jim Mann is now a Buddhist monk, living in a converted cactus in the Mojave Desert. And I used my redundancy money to set up a touring line-dancing and speed garage discotheque....No, not really. Nothing as exciting. I went through a stressful period after my conversation with Mark Fisher during which time it wasn't totally clear what was happening with purchasing. Eventually, Mark decided that the function should report directly to him, rather than through a Director of Central Services, which was good news for my team.
That might have opened up the question of whether I should stay (or at least express an interest in staying) but he also decided that the Purchasing Director would need to be based in Edinburgh. That made it a very easy decision, as we would not relocate as a family, and I don't want to spend half my life in an Edinburgh hotel room! If the job had been London based, I would probably have refused to do the psychometric tests as part of the selection process anyway - but that might have put my pay-off in jeopardy if it was considered that I had made myself redundant! But as it was, there could be no real question about my eligibility for redundancy and the associated pay-off. Fisher also decided that he didn't want to give the RBS purchasing head the top job immediately. He wanted to have a bit of time to consider options, and perhaps to see how external candidates might compare.
At least the way it happened for me was clean and straightforward. What was strange was that, having had the phone call from Fisher and said I wouldn't move, I then made all the running in terms of organising my own departure. I went to see Chris Wathen, the HR Director, arranged meetings with the lawyer who, at NatWest's expense, had to advise me on the signing of the "compromise agreement", and even walked that agreement round from the lawyer's office to Wathen's office and got it signed. (I have wondered if he would have noticed the odd nought added onto the figures!)
The compromise agreement basically said I wouldn't sue NatWest for unfair dismissal or similar, and in return they pay my notice period, including an element for bonuses and so on, and don't make me work the notice period or take gardening leave. It seems fair, and I have to say that Wathen was excellent, despite our occasional run-ins over Redgrave.
He was helpful, fair, and also gave me some useful personal advice concerning what I might do next and how to get the most out of outplacement support (which NW pay for as part of the agreement.) His assistance was even more admirable given that he was leaving himself at the end of May, and only really hung around that long out of a professional desire to help colleagues like me go through the process as painlessly as possible. I had no contact with anyone from RBS in terms of my situation or the agreement; which was fine as far as I was concerned, but a little strange I thought.
It was quite an emotional moment when I told my team formally that I was leaving, even though they were probably by then expecting it. I felt particularly bad about my excellent secretary, who only took on that role a few months ago and whose own job was then in some danger. I leave NW formally at the end of June and I am talking to a few companies about possible next jobs. Luckily, the boom in e-procurement and B2B e-commerce in general means there are plenty of opportunities around, although I may be tempting fate in saying that before I have anything sorted out!
My only real NatWest related work over the last few weeks has been trying to help my team in terms of the next steps of putting the new organisation together. The overall staffing level of the new department suggests that there should not be too many casualties, although there may be a few issues where the jobs are available, but in the wrong place (London or Edinburgh) for the appropriate people.
One aspect which has helped to protect the staff still around, but is not exactly good news, is that a number of people have resigned as the process and uncertainty dragged on. Several excellent managers have left, leaving some holes that will be hard to fill. And sorting out things like the new roles and positions has taken longer than expected. That is in part because of the length of time it took RBS to come to agreement with the trade union, UNIFI on how the integration process would be managed in terms of people, jobs and redundancies. Only jobs at the top level could be progressed prior to that agreement which didn't come until mid-May. I don't know what effect that has had in the businesses, but it has made it hard to move forward in purchasing while staff still feel uncertain about their future. Things should now improve rapidly.
In general, my perception is that the integration process has been less structured and less uniform across the new company than we expected. When we admitted defate, Gordon Pell predicted that RBS would have consultants involved with the integration process. In fact, Goodwin decided that consultants would not be involved and that senior managers would be responsible for the process in their own areas. As someone who has complained about over-reliance on consultants in the past, I have to applaud this. But the consequence of this has been a lack of common methodology, and in some areas a less structured approach to the integration than most of us expected.
RBS gave a 30-day progress report to the City on April 19th informing everyone that everything was on track and looked good. Four key promises had been kept, they stated; a new Group architecture had been applied, all key appointments and responsibilities were confirmed, internal control structures were aligned, and three-year plans were in place for all units. Obviously they didn't consider the Group Purchasing Director position to be a "key appointment".
They also talked about good and bad surprises. The good ones included better co-operation from NW people than expected, the strength of Greenwich as a business, and the Internet and e-commerce activities already in place. The bad ones included the Property situation, remuneration (they felt there were too many people paid too well, which may be a combination of a London/Edinburgh dichotomy, the greater number of NW staff working in sexy and lucrative dealing and investment banking areas, and the somewhat top-heavy nature of the NatWest Head Office) and "avoidance behaviour" whatever that means. They included two light-hearted examples at the end of the presentation - the wine cellar was a plus, and the cricket sponsorship a negative. I think there was some genuine annoyance that the cricket deal was signed so close to the change of ownership, as I had feared.
Whatever anyone thinks of their progress to date, as far as I can see, the businesses are doing fine. Gartmore has been sold for far more than most people expected, and Equity Partners has also gone, but RBS have decided to keep all the other parts of the Group. There have been no major disasters, and I have seen more interesting new business initiatives announced on the Intranet than I think would have been the case pre-takeover. You get the feeling that RBS do have a more entrepreneurial, fast moving and customer focused style than the old NatWest.
RBS have decided to change their year-end to December 31st, in line with NatWest's. On May 4th they announced results for the six months to March 31st prior to switching to the new timetable. These were very good results, particularly as they reflected a period during which the bid must have been a major internal distraction. Profit before tax was up 35% to £715 million, with income up 20% to £2,345 million. Operating expenses were up 12°/o to £1,133, which is not such a good result in terms of cost-containment, but as long as revenues are growing so strongly, that sort of cost increase is not a problem.
All areas of the business, including Retail, Citizen's, Direct Line and the joint ventures, showed an improving performance. All in all, impressive results, and many would have seen them as a vindication that the right company won the battle for NatWest. Perhaps we really were poor managers and RBS will make a huge difference to the NW businesses.
If they do, it will have happened without a lot of knowledge transfer from the old top team. Bernard's sudden exit was not unusual. Where the top NW people went, they generally went quickly and without much of a handover as far as I could see. I am unusual in that I have stayed around so long, have a good relationship with my RBS counterpart, and have contributed at least something during the handover period. Many senior people seemed to disappear overnight.
Bernard is pursuing a number of non-executive director possibilities, and has an interest in a couple of e-business opportunities. Richard Delbridge is a non-executive director of "egg", Prudential's e-bank that is planning to float shortly, and will I guess pick up another couple of things. Ron Sandler re-appeared quickly as Chairman of some e-fund. I don’t know what Derek Wanless or Sir David is up to. At least two of the NW business MD's are trying to set up e-commerce based companies, having negotiated some office space in Lothbury as part of their departure packages. When the dust finally settles, I suspect only around 20% of the top 100 NatWest managers will still be around in the new company.
The centre of gravity of the operation moved incredibly quickly to Edinburgh. Even where senior managers were physically still in Lothbury for a while, like Richard, he quickly found he had little to do. Rumours still abound in terms of the Lothbury building; it looks as if it will close around the end of June, but what happens then is a mystery. I thought it would make a great hotel, after many millions of investment, but someone pointed out the total lack of car parking, which I guess is an issue. We will see.
And some NatWest senior managers have survived. Mark Fisher, as Chief Executive, Group Manufacturing, has what is perhaps the toughest of all the top jobs at RBS. He not only has areas such as purchasing and property to contend with, but is also in charge of the IT integration efforts and all the Retail "back-office" processing areas, including the continuation of RTP. Much of the £1.2 billion of savings forecast by RBS will fall into his area of responsibility. Gordon Pell also has a vital role, in charge of both the NW and RBS retail networks; although he is in a sense not exactly a "NatWest person."
In general, the job cuts that presumably will happen have not really been visible as yet. To hit the target of 18,000 there will have to be some major surgery, although in an organisation of around 100,000 people natural wastage through leavers and retirements probably gives you around 10,000 departures a year anyway. One unpleasant aspect though has been some press and analyst comment along the lines that NatWest people "deserve" what is coming to us because we "mismanaged" the company and franchise.
So how come nobody says this about Rover employees, or C&A, particularly given NatWest, unlike Rover or C&A, was very profitable. ("Mismanaged" to the tune of £2 Billion a year and a 20% return on equity?) The NatWest job losses to come are far greater than those at Rover, yet we don't seem to have concerned MP's asking questions in the house and sympathetic articles in newspapers. Sure, the economic effect may be different; NW job losses will be nationwide, rather than concentrated in a small area of the country, and many people will easily find something else. But that is no consolation for a "rationalised" call centre lady in a job-poor area. There seem to be some double standards and hypocrisy at work here.
The last few weeks have been very strange for me personally. The purchasing office in London is still very quiet, as it will be until the appointments are made and people can get stuck into the new challenges. My only e-mails now tend to be coming in from outside NatWest- I am firmly a non-person now. But life goes on, and I am under no illusions that I will be hugely missed or remembered for long once I have disappeared! Similarly, I doubt whether most customers have even noticed that anything has happened. Just as nature quickly covers the traces of a forest fire or hurricane, what felt at the time like a hugely traumatic happening from the inside is now almost forgotten by the world at large. It is only business, NatWest was only a company, a bank is only the thing that looks after your money, and none of this really matters in the way that your family, war, starvation, or freedom should matter.
And yet...this was a bit of British economic history. The death of a once great old English Bank. Proof that a smaller bank could successfully mount a hostile bid for a much larger institution. A warning that investors will not always back incumbent management, even if profits are £2 billion a year and growing. 15,000 jobs going. A huge influx of available management talent onto the job market. Edinburgh gaining, London losing.
Personally, the experience was probably good for me, and I learnt a lot, but I would really not wish to go through a similar few months again. As long as I find a job soon, I am also significantly better off financially, and considerably more cynical about the whole nature of capitalism.