ROVER - THE WAGES OF LONG-TERM INCOMPETENCE IS DEATH.

It seems that the end of a sad, painful, ignominious road has finally arrived for Rover. Many commentators are picking over the wasted corpse trying to variously assign blame or understand what happened. A quite typical reaction from many journalists has been 'Oh well, just proves that we British are genetically incapable of running manufacturing businesses, we had better concentrate on services'.

But stop a moment and consider a large successful service business.
It is run with a remorseless attention to quality, reliability of delivery and customer service. Its 'business model' - what it is aiming to do, its specific objectives, what it will do to consistently please its target customers and what it needs to be particularly good at - is clear, detailed and widely understood from top to bottom.
It concentrates heavily on understanding its customers and developing and supporting its staff. Everybody is rigorously trained to do their job, and everybody knows what doing a 'good job' means. Its systems are rigorously designed to support excellence of planning, communications, information and delivery. It invests heavily in the people, processes and facilities that will keep the business at the forefront of practice in its chosen industry.
It has a strong 'brand image' which essentially comes from the reality of the organisation, its culture, standards and people as experienced by the public and customers.
Success is understood to come from inside, not from consultants, M&A, weird new strategies or the latest wheeze. Management is home grown - succession to the top jobs is from inside - thus ensuring continuity and building on success rather than constant disruption and stop-start change for its own sake.
It is single-mindedly focused on being good at its business, day in, day out, for ever.
Those who are interested in the characteristics of excellent companies can refer to what it's like inside successful companies - questionnaire.

We could go on - and on. But let's stop and ponder a moment. The perceptive amongst you may say - 'Wait a minute - aren't these the characteristics that one would aim for in a good manufacturing business??' Answer: Yes of course they are, but we were thinking of Tesco.
But something akin to these characteristics will distinguish almost any large business in services, entertainment, manufacturing, finance or retailing.
Its simply called running a good business.

So what our journalist friends are really saying is that there is a dearth of competence in Britain at running large sustainably successful businesses - and we would agree. The reasons are complex and we will continue to explore them through this site - but one of them is that running good companies is not valued or understood sufficiently - not in the press, not in the financial markets - both of which like novelty, excitement, quick fixes and bold, dramatic 'moves'. These are good for selling newspapers and earning investment banking fees - but they are usually bad for running successful companies. That is often referred to as 'boring'.

So back to Rover. The sad corpse that remains is not a result of bad luck, British genes, or, along the long road of the company's history, a lack of opportunity. Nor is the history of Rover excessively blighted by a bad workforce - although there have been periods of bad industrial relations. In the long run, managements have been the leading actors in creating a climate of relationships in enterprises. Just look at what the Japanese have done in the motor industry in Britain.
The core problems have been ignorance, slack standards, lack of professionalism and consistency on the part of managements, and a lack of proper understanding and quick fixes by politicians.

If these conditions continue to prevail, large British companies will fail in 'services' too, leaving the field open to foreign competitors, bright individuals who will continue to found companies, but struggle as the management challenges become complex - and private companies, family businesses and partnerships that can stay out of the popular press spotlight and the clutches of the financial markets.

Who have been the winners and losers from the Rover debacle?
First, the winners:

• SIAC, the Chinese motor company which has extracted the best remaining 'juice' from Rover, in the form of the engine business and the intellectual capital embedded in that, plus the two best Rover models, the 75 and 25 - at a knock-down price without the hassle of having to resurrect a near-corpse.
• BMW, who despite their painful experiences with Rover, have extracted the Mini brand and know-how, applied good German automotive practise and not a little flair to re-launching a gem that British managements had left to rot. BMW will make a fortune from the new Mini - at least it is still built in Britain for the time being. BMW also extracted a lot of 4by4 know-how from Land Rover, which they will doubtless profitably exploit.
• Other (foreign-owned) mass mid-market car manufacturers, which now have one less competitor to contend with.
• The 'Phoenix Four', who have accepted the opportunity to make sure that their efforts were rewarded with dedication and energy - and with reportedly fulsome results. How fulsome, we may find out in due course.

The losers:

• The workforce, which as usual, has done little wrong.
• Society, which has lost well-paid jobs, yet another opportunity to host an indigenous quality automotive business and a lot of intellectual capital.

Also-rans:

• Politicians, who have yet again proven that they are naïve and ignorant when it comes to understanding the details of running businesses, and have concentrated on achieving political 'quick fixes' with the usual results.

(It has been pointed out that the last piece is unfair - by someone who expostulated 'But they are after all politicians, what else could you expect from them?' We fully accept the criticism).