French Management.

I have just returned from a delightful few days on the sunny Mediterranean island of Ibiza. At this point, if you have heard of Ibiza, you will be probably readjusting your perceptions of this author as visions of large throbbing nightclubs, drug fuelled raves, foam parties and beaches covered in tattooed european muscle and scantily clad ladies flood your stereotype receptors.

Well, I am happy to report that there is another Ibiza. One of massive isolated luxury villas, frightening expensive beach bars (dripping in cool), superyachts (my word, the bays were rammed full with them) where time can be spent lying on shaded terraces, dipping into empty infinity pools and dining on the most exquisite food.

I am also happy to report that I can’t afford the latter or cope with the former, so sat on less expensive terraces in less expensive villas looking at other people’s superyachts and sipping just a couple of drinks at the Blue Marlin and ordering the pizza rather than lobster before my credit cards stopped working. It was delightful and relaxing none the less.

But dozing in the Mediterranean sun, the distancing from the markets and reducing the inputs whilst freeing the lolling soporific thought processing appeared to be more profitable than the high frequency overdosing of every single bit of news that most traders and screen jockeys are subject to. I managed to close equity shorts and go long on Tuesday open and have just reversed that trade on the Friday open on very few inputs. This is a theme I have found echoed recently by other ex-City Gods who have also found their predictive powers of market moves have become easier since they rid themselves of the clutter of IB chat inputs, the stream of Bloomberg headlines that nowadays appear to have a random red function to them as Bloomberg's talent for spotting what is important or not is becoming positively UK Labour party like. I am, of course, referring to the Labour Party’s instance that the most important issue in the world now is the use of the word ‘swarm’ by the Prime Minister.

The practice of moving attention away from 99.5% of the issue by focusing on an irrelevant 0.5% of the issue is classically political and I think we have all seen it used in dealing rooms when a cock-up occurs to attribute blame to the person chosen to take the fall. Pricing models might have may have failed, bank process may not have been in place, management may have turned a blind eye or implicitly encouraged, the phones might have been dicky and the client a duplicitous bastard, but some poor sod will be going down and reported to the FSA because he didn’t use the correct shade of blue pen when signing the deal slip. I have particularly found this method applied in French banks as the French do tend to have a skill at picking out the irrelevant 10% of an plan to stall it or trip it up.

Having worked in said institutions it wasn’t until too late in my management careers with them that I worked out how French project management varies drastically from the Anglo method. In the Anglo world to solve a problem, lets say bridging a gorge, the team allocated the task first assess all their needs (how much timber, ropes, man hours, pully blocks etc) and present the plan to management who then sanction the allocation of resources and the project goes ahead. However this isn’t how it works in French management, who are famous for asking the question "That is all very well in practice, but what about in theory"

The French method is for management to mumble that it might be a good idea to cross the gorge. Any plan presented to them by an underling is studiously ignored, instead all teams below are then expected to scavenge resources - read as 'fight each other, steal, stab, betray and compete for’ - to build a structure to cross the gorge which is constantly under attack from the other teams trying to steal its components and make it fail. Whilst this is of course hugely inefficient it has huge benefits for management. If it fails then it was not their responsibility as they never sanctioned it, but if it succeeds then it is their success, with the winning team leader, who is now proven as a vicious backstabbing bastard, being promoted one step up the ladder.

This should come as no surprise as it was Napoleon who most effectively employed this management technique, making sure that all his generals were fighting each other enough to leave his own position safe from threat. There is one other person who may be a skilled master of this technique too, a man whom I once met and was depressed by his propensity to talk about the size of his personal wealth over business issues. He is now Chairman and recently self appointed CEO of a large UK clearing bank. I think they even have a branch at Waterloo.