The New Statesman Profile - The Industrial Society

Once, it pressed for workers' canteens; now, the messiah of stakeholding comes to change the state i

Margaret Thatcher almost consigned the words "industrial" and "society" to lexical history in the 1980s and even now the two together do not make a phrase that sings of modern Britain. Those who have heard of the Industrial Society - people under 45 usually have not - tend to know only that it has something to do with the world of work. They associate it with the 1970s, a decade when people had permanent jobs rather than "portfolio careers", and managements and unions met government in tripartite economic development committees or "Neddies". Wages councils regulated the working hours and conditions of millions, their levels fixed by negotiation and enforced by law; and the main obstacles to equality of opportunity at work seemed to be a few die-hard Tories and a similar number of unreconstructed male chauvinist trade unionists.

The Industrial Society thrived in this co-operative period, bustling between moderate managers and moderate trade unionists, persuading each to make modest demands of moderate listening governments. But, in Thatcherite parlance, the Industrial Society was as wet as wet could be, and the 1980s was not its decade. If it has made remarkably little noise since, that is probably because it became used to cowering below decks, hatches firmly battened down.

This month, Will Hutton, author of The State We're In and former editor-in-chief of the Observer, hopes to coax the Industrial Society back on deck. As the new chief executive officer of the society, he inherits a financially healthy and recently downsized organisation, a staff of about 300 and an annual income of around £20 million. But, good housekeeping apart, Hutton joins the organisation at a time when its role in civil society is as ill-defined as it has ever been and when the only certain thing about the future of work - the society's core concern - is that it will be uncertain.

For the moment, the Industrial Society occupies two London sites: cramped but elegant Georgian headquarters in Bryanston Square, near Marble Arch, whose lease expires early in 2001, and a conference centre overlooking the Mall, on long-term loan from a benefactor. The boardroom of the latter gives a hint of the sometimes contradictory world of the society. Floor-to-ceiling windows lead on to a vast terrace where dukes and duchesses once partied and promenaded. But, on the fireplace wall, where you might expect to see a portrait of the Duke of Somewhere, you find a red wall-hanging inscribed with a speech by Nelson Mandela. The mug that Hutton drinks his coffee from is decorated with feel-good words such as "equity", "values", "dignity", "practical", "boundless", and "potential".

The society has always operated with a big heart and a shifting purpose, defined over the years by successive directors. The most enduring theme has been along the broad lines of "be good to your employees and your employees will be good for your company". Currently, the society believes in "the boundless potential of people at work" along with "the dignity of people at work" and the importance of promoting "integrity, fairness and equity in all actions concerning work".

When the Reverend Robert Hyde started the Boys' Welfare Association in 1918 to improve working conditions in the munitions factories, a major purpose was "to save young boys from degeneration". Workers' welfare and deliverance from the pressures of poverty that led the poor into temptation went hand in hand. The following year, the organisation was renamed the Industrial Welfare Society - a name it kept until 1965 - and its purpose was redefined as campaigning among employers "on questions affecting the welfare of male persons engaged in industry". Women and girls presumably looked elsewhere for moral rescue.

For many years, welfare reform boiled down to organising healthy camping holidays for young workers and persuading employers to provide canteen and lavatory facilities. Hyde wrote that he prayed often that industrialists would devote as much consideration to feeding their workers as they did to choosing their fuel. His moral purpose directed the society for 31 years and he left, aged 71, in 1949. Hyde had also attracted royal patronage. Prince Albert, later the Duke of York, became honorary president and initiated the idea of camping holidays where factory lads mixed with public school boys. Unfortunately for the society, he was called to rather higher office by the abdication crisis. The official history tells us that for his coronation he ensured that "a section of his procession route was specially reserved for several hundred of his camp boys".

Unions were definitely not equal partners when Elizabeth Pepperell, now one of the society's heroines, became assistant director in 1952. She had worked as a girl of 14 for Bryant and May, and, as the official society history explains: "She saw the union as the answer to all her problems but, on joining, found that going to the branch meeting solved nothing. It seemed only to underline rather than explain the distrust between management and the shop floor."

Hyde was replaced by a man almost half his age, 37-year-old John Marsh, who lasted a mere 12 years before moving on to head the British Institute of Management. The third director was John Garnett - Virginia Bottomley's father - whose name is never mentioned in Industrial Society circles without words such as "the charismatic" or "the Messianic" being used as an honorific prefix. Garnett, formerly of ICI, was 40 when he became chief executive of the society in March 1962. He retired at the age of 65 in 1986, leaving in place a helpful slogan - "Make it happen".

The next two heads were, unfortunately, unable to "make it happen", and survived just eight years between them. The rhetoric of co-operation and worker involvement had no place in the economic climate created by Thatcher. By the time Garnett retired in 1986, the Iron Lady was in her second term and the society's problems were serious. Internal debate about opposition to elements of the Thatcherite programme led to resignations from member employers.

Chief number six, Tony Morgan, took over in 1994 and is credited with having rescued the society from implosion. Over a period of four years, he turned round the financially ailing and dispirited society, building on its strengths and developing areas in which the organisation could excel. These were the training programmes and conferences that bring in the vast majority of the society's income - about £9 million from courses and conferences and the same again from consultancy. Membership brings in a relatively modest £2 million.

The Industrial Society has always run courses - on leadership, time management, training, and report writing. One new course for 2000 is Phone Rage, a one-day course for staff who talk to customers on the telephone.

Hutton could define totally new objectives, as most of his predecessors have done. But last year, the society put into practice some of its own ideas about listening to staff and challenging basic assumptions. A group of middle-ranking managers was given the task of refocusing the organisation - of staging a kind of organised palace coup. According to Hutton, this group of thirtysomethings decided that the Society should become a "thinking organisation" and that Will Hutton should direct that transformation. The future focus is to a certain extent already decided. As Hutton puts it: "They would hardly have approached me if they didn't believe in stakeholding. This is an organisation that has just carried out a major consulting job on itself, on how it can become a thinking organisation. This is a huge transition - the society has always been about being practical. But if you're going to have something more to say than homespun homilies, it must be grounded in a body of data. Campaigning requires an intellectual capacity."

He is not criticising any particular homespun homilies and expresses admiration for his predecessors. "John Garnett had a gift for being pragmatic - for relationships and emotional intelligence," he says. He credits Garnett with promoting a post-war version of the Third Way in the 1960s. "The Industrial Society found its line and length in the postwar 'partnership in the workplace' era," he says. He also credits Garnett with showing the society how it could work with unions.

Hutton, too, is pragmatic, but he believes he can give this well-meaning organisation intellectual clout and make the Industrial Society the think-tank on employment issues, in the same way that the King's Fund is known as the knowledge centre for health issues. "Unlike other think-tanks, we will be able to use the society's wide membership base to test the impact of our theories.

"Companies have to trade in a climate in which Deutsche Bank may be fined £1 million for bad sexual codes in the office. How you talk to people in the workplace is actually up for debate."

And whether or not Hutton buys into the rhetoric of "boundless potential at work", he certainly does believe in the boundless potential of the Industrial Society: "There is an amazing sense of vocation throughout the organisation - a sense of belief in what it does," he says.

He lists various issues and approaches he wants his think-tank to get stuck into: work-life balance is always near the top. His preoccupations may seem a million miles from Hyde's concern with canteens, but he has no intention of abandoning the moral high ground. The important issues of the moment are the really big ones, says Hutton: "Pay inequalities are higher than they have been since the Middle Ages. What is going on here? How do you create a just corporation? How do you make a good workplace?"

This article first appeared in the 07 February 2000 issue of the New Statesman, The Prime Minister loses control