UK: Fear and loathing in Smith Square.

UK: Fear and loathing in Smith Square. - Archie Norman, the supermarket supremo and Tory chief executive, has destroyed scores of egos at Central Office. But can he turn the party into a winner again?

by George Parker.
Last Updated: 31 Aug 2010

Archie Norman, the supermarket supremo and Tory chief executive, has destroyed scores of egos at Central Office. But can he turn the party into a winner again?

When most Conservatives look at Central Office, they see a building steeped in history, a building where Harold Macmillan, Edward Heath, Margaret Thatcher and John Major basked in the of adoration of cheering party workers on momentous general election nights, a building which symbolises the power of the most successful political party in the western world.

When Archie Norman looks at Central Office he despairs. He sees cheap offices, tacky furnishing, antiquated equipment and an office plan which keeps the bosses well away from the workers on the upper floors. To Norman, the Tory chief executive, Central Office symbolises everything that is wrong with the modern Conservative party. He intends to rip everything out and start again - an apt metaphor for the transformation he intends to achieve with the party itself.

The Asda chairman, elected MP for Tunbridge Wells in 1997, sees before him a basket case of a political party, traumatised by the humiliating general election defeat, with low staff morale and up to the hilt in debt.

The situation was similarly bleak at the Leeds-based supermarket chain when he arrived as chief executive in 1991, a beady-eyed 37 year-old, armed with management theory, and determined to build a 'people-driven' business. It worked.

Now, after only a brief spell on the Tory backbenches, Norman has been asked to 'do an Asda' on the Conservative party. Appointed vice-chairman and chief executive of the party in leader William Hague's reshuffle earlier this year, he was effectively told to get on with the job of turning the party machine around. He has been supported by two other fortysomething vice-chairmen with business backgrounds, both of whom share his zeal for creating a dynamic and young party: David Prior, the Norfolk North MP, a director of numerous companies, and Baroness (Peta) Buscombe, who comes from the hotel trade and advertising.

Norman has gone about his task with a relish that has shocked and appalled many of the Tory party's old hands, and which has earned him a visceral loathing among many. Staff have been sacked, the party organisation has been turned on its head and fundraising activities have been made more professional. In the process, Norman has trampled all over the egos of many of his party colleagues. 'He shows a degree of insensitivity which is quite alarming,' says one moderate Tory MP, as he surveys the first results of the 'Norman Conquest' sweeping Central Office. 'He is acting as if this is year zero. He's sacking the wrong people and generally cocking it all up. Nobody in the party has any idea what his vision is - maybe that's how he ran Asda, but I don't believe it. 'If in a year's time things aren't working better, then people will start to wonder why this guy was appointed to turn things upside down. I think he could turn out to be a real danger to William.'

If Norman is worried about the storm raging around him, it is not immediately apparent, as he explains why it was necessary to dismantle Central Office and to start again from scratch. Casting aside his jacket (just as Asda executives are instructed to do, while walking around their stores), he reveals a white shirt which has endearingly only been ironed at the front.

He is earnest but relaxed and clearly very amused by the mess he believes he has inherited. 'You just have to look at the layout of this place to realise that something is fundamentally wrong,' he says, as he begins a guided tour of the 1950s Tory HQ. To Norman, the little things say a lot about the corporate culture of a place.

He points to the carpet and wood-panelling which adorns the entrance to Central Office and which extends to the first floor - where Lord (Cecil) Parkinson, the party chairman, and other big-wigs work. By the time you reach the second floor, the carpets have been replaced by a wooden parquet floor; on the upper floors (where researchers and other staff are based) the stairs and hallways are of bare concrete. 'That is all going to change,' he says. Under the Norman style of management, staff (or colleagues, as he prefers to call them) are treated equally and are made to feel valued.

'The fact that you have blue carpets on one floor and concrete on another is a statement of attitude about the way we regard the people who work here,' he says.

Norman doesn't want people to work in an atmosphere of 'closed doors and corridors'. To that end, Central Office workers - some of whom are volunteers, others lowly paid - are called to fortnightly open meetings to exchange ideas. Individuals are asked to stand up to explain what they do. Norman says that he has been criticised for bringing business techniques to the voluntary organisation, but he rejects the idea that he is being hard-nosed. 'We are doing quite the reverse,' he says. 'Everyone is here because they want to contribute to the Conservative party, but they have been taken for granted - we want to hear what they have to say.'

The hand of Norman was also evident when the idea of bonding sessions was extended to the Conservative parliamentary party, which spent a weekend at an Eastbourne hotel last year. Many MPs were uncomfortable in their chunky-knit sweaters but Norman said such meetings of 'top management' were routine in 'any large, efficiently run company'. In this new culture, Norman and his fellow Central Office revolutionaries are looking to promote flexible, free-thinkers while jettisoning those who are 'stuck in their ways'.

Therefore, when Parkinson announced a wave of redundancies arising from the Norman reforms in July, there were lurid headlines about a purge of the over-fifties. In fact, Norman claims that the majority of the 22 who were made compulsorily redundant out of a total of 193 full-time staff were aged under 50. He says older members of staff are just as capable as younger ones of contributing to a Central Office 'fizzing with ideas'.

'We want people to work here because it's fun - we want smart people working for smart people. The days of Buggins's turn and deference have gone,' he says. 'I want people to know we are setting out to create an organisation with new values. We want to see teamwork, an emphasis on the front line and parity of esteem - those are all very good Conservative ideas.'

The redundancies were announced by Parkinson and Norman at a sombre meeting at Central Office, and were part of the wholesale restructuring of the party machine. The axe fell most heavily on the Conservative party's regional organisation. If Central Office was stuffy and living in the past, then Norman felt that those working in its regional satellite offices were positively in another century. 'There were eight regional offices, where time seemed to stand still,' says one member of the Hague team.

'We had agents based there who would sit around in grand houses bequeathed by the 10th Earl of wherever, waiting for the phone to ring. The only problem was that they had the answering machine turned on before 9.30am, over the lunch hour and after 5.30pm.'

Norman unceremoniously closed the regional offices and put them up for sale. In place of the static regional agents will be a network of area campaign directors - effectively travelling Tory salesmen - who will tour the country selling the message and helping to run campaigns. The reforms brought about the enforced resignation of Sir Tony Garrett, the party's director of campaigns, who was told to leave because he could not support Norman's proposals. He had been with the party for 27 years and

shadow cabinet members said privately they were 'appalled' by his departure.

He was so upset that he left the office without any formal goodbyes, leaving a hurriedly penned letter which said 'it would appear appropriate for a new team to lead the party organisation through the challenges that lie ahead'.

The new field operations unit of travelling agents will be overseen by Prior, a close political ally of the Asda boss. He has a business background which takes in British Steel and Lurmark, an agricultural spray company.

Prior is best known at Westminster for his candid admission that he once smoked cannabis and that it had done him no harm. While such an admission would have made him a Central Office outcast in the past, it makes no odds to either Norman or Hague. The son of Lord Prior, the former 'wet' cabinet minister in the Thatcher administration, Prior is young and keen to bring about the Norman revolution on the ground.

He says the new area campaign directors will be 'very high-calibre people', some of whom may come from the regional offices. But he says he has no regrets at the apparently drastic pace of change. 'Restructuring on this scale is never going to be smooth, particularly in an organisation which isn't acclimatised to change. It is uncomfortable for people.' He believes that ordinary people in Smith Square are supportive of the changes. 'They believe the party is out of touch and that the deferential attitude should go. It should be younger in outlook.'

There will also be some slimming down of the Central Office organisation too, mainly through 'natural wastage'. The centrepiece of the rationalisation will be the bringing together of the campaigns, research and press departments into a single open-plan war room. Gone will be the days when egg-headed researchers drew up policies without any reference to the press officers who would have to go out to sell them to a sceptical press. The Tory party is the last one to implement this strategy: Labour's Millbank Tower operated a war room before the election, while the same measures were introduced by the Liberal Democrats last year.

Although Norman can give good common-sense reasons for each of his reforms, they are driven by financial necessity. Like Asda in the early 1990s, the Conservative party is on the brink of financial collapse and is right up against its reported £4 million overdraft limit. The general election drained the party dry, and its income in the past 12 months has fallen below £10 million a year. Norman's reforms are designed to cut the party's outgoings and to bring the deficit under control. 'We needed to get expenditure down to a manageable level,' he says. 'Things were heading out of control. By this time next year, we will hopefully be running at a surplus.'

Much depends on whether his separate reforms in the fundraising area are successful. For a start, a professional team has been brought in from outside Central Office to begin seeking out donations, particularly from the business sector. Donations always fall sharply after a general election but the Tories were particularly badly hit after the 1997 fiasco. For a start, business donors could no longer see the crude political advantage of giving cash to a party which looked likely to be out of power for a decade or more. Second, the sleaze scandals associated with Tory donations had dissuaded some corporate supporters from getting involved. Third, the new £5,000 limit on anonymous donations has led to the drying up of big gifts from people who would rather not have their name linked to the Conservatives.

Norman believes that small businesses will respond well to the party's resolute stance against the single currency. Improved use of technology for mailshots should also help. However, a great deal depends on whether Hague can succeed in restoring donations from a more traditional source - its membership. Since the party has never had a centralised membership list until now, it has never been possible to tell exactly how many members the party had: the best estimate is 330,000.

Hague has promised to double the membership within two years (Norman thinks that is rather ambitious), with at least half of the new members being younger than the Tory leader's 37 years. Much of the responsibility for reaching that target lies with another Central Office revolutionary, Buscombe. She is in charge of bringing young people back into a party which currently has an average age of 64. The vehicle is the new 'Conservative Future' organisation, which replaces the moribund Young Conservatives and the various discredited Conservative students' organisations.

For slightly older professionals, in the 25-44 year-old age bracket, the party has set up a snappily-titled organisation called The Network.

The aim of both bodies is to encourage people to get involved in active Conservative politics, not to get bogged down in committee meetings in fusty tearooms. 'I'm trying to help change the culture so we become a party where talent, skills and enthusiasm count, rather than length of service,' Buscombe says. 'We don't want people to be put off by being asked to sit on boring committees.' She is also responsible for trying to attract more women into a party which has been notoriously unwilling to see the female sex as anything other than a useful provider of teas at constituency functions. The Tory party currently has only 14 women MPs out of a total of 164.

Another sign of the new approach is the introduction of modern computer technology at Central Office. By the end of the year, the party will have a database with the entire electoral register of Britain on it. Known characteristics of individual voters will also be stored - the result of canvassing during elections. For instance, the party will be able to send out targeted mail to 'Conservative-inclined farmers', who might have indicated their preference to a party canvasser several years before.

Party agents and activists will be able to use an intranet to exchange ideas with Central Office and to draw down detailed policy briefings.

For the first time, party workers in Smith Square will be able to send e-mails to their offices in the country.

Although Norman's reforms might seem modest to many managers in 'the real world', they have been fiercely resisted and resented by many old hands at Westminster. Some complain that the supermarket supremo has no understanding of the history of the Conservative party, or its traditions. Norman would probably see that as an advantage.

Parkinson, who was in charge at Central Office during the 1983 Tory election victory, is among those who appear to have been rubbed up the wrong way by Norman's no-nonsense style. Brought back from semi-retirement by Hague to oversee a period of intensive change, Parkinson seems to have been hurt to see so many old colleagues being given the bullet. According to one piece of Smith Square legend, the Tory chairman is reported to have remarked that he won the 1983 election with a budget surplus, 'but that doesn't mean that I know how to run a supermarket'.

Parkinson stands down from his post at the forthcoming party conference in Bournemouth, to be replaced by the emollient and aristocratic Michael Ancram. Ancram was reluctant to be interviewed, on the grounds that he felt it inappropriate to comment on Norman's reforms until he formally took over the chairmanship. A spokesman said he was, of course, 'fully supportive' of the changes being carried out. 'Most of the reforms will have been carried out by the time he becomes chairman,' Central Office said. For that, Ancram will be mightily grateful.

With Parkinson about to depart the scene, Norman and his two vice-chairman will be left to take the flak for the redundancies (and precious little of the credit for making the kind of savings needed to keep the party in business). Whether Norman can ever rebuild bridges with some of his disgruntled colleagues remains to be seen, but he is certain to retain the support and gratitude of Hague. The true test of the reforms will be whether Norman achieves what he achieved at Asda and whether the Conservative party is capable of being transformed into a motivated, youthful and dynamic organisation. And most of all, whether it can be transformed into a winner again.

George Parker is the political correspondent of the Financial Times.

STORMIN' NORMAN REMAINS IMPERVIOUS TO 'COLLEAGUES' CRITICISM

Archie Norman may have delighted the shareholders of Asda by turning the supermarket's fortunes around, but his brash and irreverent approach to politics was never likely to win him many admirers in the fustier corners of the Conservative party.

'I am not setting out to be popular,' he said, shortly after being appointed by Tory leader William Hague to transform the moribund party machine. He has certainly lived up to his prediction.

'He seems to think everything in the party is stuck in the 1950s, but we have won a few elections since then,' fumed one Conservative MP after Norman had outlined his proposed reforms to the backbench 1922 committee. 'He seems to glory in the fact that he knows little about the history of the party.

All of us are sensitive enough to know when we are being fed crap.' Norman, 44, has one of those faces which gives the impression that he is permanently amused or thinking up some mischief. Blessed by the full support of Hague and comforted by the fact that he has a career and money outside politics, he cheerily shrugs off such comments.

Although well-known as a Tory supporter, it came as some surprise when he announced his plans to stand for the party in the 1997 election. Few could understand why he should want to give up the job of running a successful company which employs 70,000 people for what seemed certain to be a spell on the opposition backbenches.

'I think it is valuable that I will be coming into politics without being dependent on anybody, with the freedom to speak my mind,' he said, shortly after being selected to fight the ultra-safe parliamentary seat of Tunbridge Wells. He set out a platform of traditional right-wing views, in which he strongly opposed early entry to the single currency and advocated smaller government and fewer bureaucratic burdens on business.

The Tories were delighted to have snared the former McKinsey management consultant, who had turned Asda around from a failing supermarket company in 1991 to one which made profits of £400 million last year. Norman's time as chief executive between 1991-96 and subsequently as chairman was marked by the introduction of novel management techniques, all designed to break down the traditional barriers between bosses and employees. Managers were encouraged to chat regularly to 'colleagues' on the shop floor; staff views were sought and listened to; the company embarked on a forward-thinking share options scheme. The 'people-focused' business operated on first-name terms, and staff were rewarded for good work.

Some of the quirkier aspects of Norman's style have been transferred to Central Office. Staff are encouraged to keep their desks tidy and to desist from smoking. The chief executive wanders around the building, asking his colleagues how their jobs are going. Norman does not have a desk or office at Central Office - he believes such accoutrements are unnecessary and a waste of space - and tends to do all his work in meeting rooms.

In the longer term Norman believes that the party should consider moving out of Central Office, if suitable alternative premises are available.

Sharing with the Labour party in Millbank Tower - an idea ascribed to him - is dismissed as 'a joke'.

While his radical overhaul at Smith Square has been welcomed by Hague, many of his colleagues resent his access to the party leader and his self-assured manner. They expect new boys to show a bit of humility.

When Norman stumbled his way through a long-winded question to Tony Blair at question time in the House of Commons in July, some Tory MPs could hardly disguise their glee. 'He holds MPs in a fair measure of contempt,' said one veteran Tory. 'You only have to see how bad he is on his feet to understand why it is reciprocated.' Others question his political judgment. He hardly won any new admirers with his choice of a management consultant, Peter Samuel, to help him carry out the Central Office cull - Samuel was a Liberal Democrat candidate at the last general election.

However, he has admirers among the younger apparatchiks at Central Office.

One young staffer says: 'He can seem rather cold on the surface but Archie was the one who told us all to go out and buy some booze and enjoy the World Cup on our big screen.'

Whether he can make the transition from backroom fixer to front-line political operator is not yet clear. Hague will certainly give him a job on the front bench before too long. Perhaps he will get bored and decide to return to the boardroom. As he once said: 'In politics, as in business, there are times when it is important to have the ability to walk.'.

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