Inside Out Culture

What made the Post Office culture so bad for so long?

• Inside Out Culture • Season 1 • Episode 3

Share episode

The failure of the Horizon IT system and the subsequent litigation brought by the Post Office against sub-postmasters is one of the greatest corporate culture failures of all-time.

From a lack of governance, to poor leadership behaviour leading to bullying and harassment, it is a case study in how not to work.

In this episode of the Inside Out Culture podcast we take a look at the foundational culture failings of the post office and examine the biases shown by senior leaders.

---

Join us as we reveal strategies to close the gap and craft a workplace where values are not just spoken, but lived and breathed, paving the way for a more authentic and engaging organisational culture.

Instagram: @insideoutculture

Email your questions to: insideoutculture@gmail.com

Receive the Culture Leaders Action Sheet: bit.ly/iocpmail

Colin:

Welcome to the Inside Out Culture podcast, where we look at insights of working culture and provide ideas, insights and actions for you to take on the outside. I'm Colin Ellis.

Cath:

And I'm Cath Bishop, and in each episode we'll examine a different question or a different organisation, and we'll use case studies, research and our own insights and experiences to help you change the way things get done in your world.

Colin:

We hope you enjoyed today's episode. Please like, subscribe and, of course, let us know what you think.

Cath:

Hello everyone, Welcome to the Inside Out Culture podcast. I'm Cath Bishop.

Colin:

And I'm Colin Ellis, and on this episode we're asking the question why is the UK post office culture so bad? Now, Cath, before we get into the episode, I thought I would just provide a little bit of background for those who are outside the UK, because I think it's been a pretty big story in the UK For those outside the UK who are not familiar with this story. So very, very quickly. So in 1999, the UK post office implemented a new IT system to help the sub-postmasters. So a sub-postmaster is someone who's got a little branch of the post office out in the community and they process all kinds of financial transactions. Now, with this IT system, what happened is that very, very quickly, some of the sub-postmasters noticed that it wasn't actually balancing, and so what that meant was there was a shortfall in the amount being reported to the post office.

Colin:

Now, the arrangement that the post office had with the sub-postmasters is, if there is any kind of financial shortfall, it had to come out of their pocket, and if you didn't pay it, then the post office would basically chase you for payment, almost like you are in debt to them. And anyway, this happened over a kind of 1918-19 year period where they routinely prosecuted their own sub-postmasters for theft, for fraud, because the IT system misreported it. Now there were a number of sub-postmasters who wouldn't let this go. One particular one was a guy called Alan Bates who insisted that it wasn't the sub-postmasters who were at fault, it was the actual IT system itself. Now, this story was picked up by Private Eye. It was picked up by Computer Weekly, publications in the UK, who then took on the case essentially of these sub-postmasters, culminating in a high court hearing in 2019, which they were found with the post office were found to be liable. However, this thing still rumbles on and postmasters still haven't received the compensation, or they haven't received kind of the acknowledgement that they weren't actually in the wrong. And so there was a TV drama that was produced by TV company ITV, which was aired in the UK prior to Christmas, which brought the whole thing to life.

Colin:

But, coming back to what we're talking about, no one's really talked about the cultural element of how was it we got to this place? Were the leadership of the post office and everybody involved, the contractors, everybody else didn't ask the question. Well, wait a minute. Surely it can't be just the sub-postmasters. Maybe we have to look at our own house. So, kat, that was just a little bit of an explainer as to where we are right now, and the story continues to rumble on. We're recording this in February 2024, and it's still got legs, hasn't it?

Cath:

Literally every day, there is some other angle to this or other people who are coming out, who've been affected by it. We're talking hundreds of people. There are a lot of different angles and I think what we want to do is get a little bit under the surface, because what a lot of the major attention is on is who's to blame, and finger pointing the politicians. Of course, there are a number of politicians who held that role in the government over that period of time, or, looking at there's been a lot of focus on the chief executive for a large amount of the time, which was somebody called Paul Venals. So there's this, as ever, sort of blame game and, of course, accountability is crucial, and what we want to do here is look, under the cover of simply who is to blame, to think about what was going on that enabled this to happen in the culture, what were the behaviors, the mindset, what is it that meant? This was something where poor behavior, lacking in values, lacking in integrity, could go on over decades.

Colin:

And maybe the CEO is a good place to start. As you said, Cath, the focus has very much been on Paul Venals, who was the then CEO of the post office, and the attention focused on the fact that she'd been awarded an honor by the Queen and the pressure where she needs to give it back, and, of course, the CEO is ultimately accountable. But they also kind of set the tone for the culture of the organization as well, don't they? It's not just Paul Venals. She must have been surrounded by a whole group of people who were giving her advice. Right, it's not just her on her own making the decisions willy nilly. She has to have advice from others as well.

Cath:

Exactly, and so one of the things if leaders thinking, my goodness, could that happen in my organization? Is to think about the composition of your leadership team and to think about the sorts of conversations you're having. Are you just trying to work out what the chief executive wants to hear and tell them that, or are you bringing them other evidence that suggests maybe things aren't what they seem? Are you questioning things or not? And what is quite clear here is that there was not a lot of questioning going on, and there was a desire the whole time to look at only the information that, in a way, confirmed what you wanted to hear that you were in the right and all these sub postmasters were fraudulently trying to wrongly steal money that you needed to claim back, and so this assumption lay under everything that they did.

Cath:

The assumption was the sub postmasters at some level there's a huge risk and they're quite likely to want to steal from the post office. That must have been underlying their thinking because of how they acted in terms of prosecuting, in terms of, you know, threatening and everything was about that taking that kind of action against them. There was nothing that said. Let's listen to their stories a little bit more. Let's try and understand why hundreds of people are suddenly trying to act what seems in a fraudulent way. There was none of that curiosity or a desire to dig deeper and start listening to different people outside of your leadership team, and that's really where we can see different forms of bias. Isn't it coming into things?

Colin:

Yeah, absolutely. And one of the politicians that took up the postmasters case of conservative peer called Lord or both not, which I think now I say it sounds like the most English name ever. You know you look up a picture of an English gentleman and the names of Lord or both, but he said he said that the hallmark of Paula Venals time CEO was that she was willing to accept a polling advice from people in her management and legal teams, and often one of the things I think that the for those of you actually saw the TV drama One of the things they reflected on was the fact that they were trying to tell themselves a story so that they could all believe it. They were trying to construct a narrative and you know, as a former public servant, someone who worked in government myself, this is something I've seen a lot. This real confirmation bias, confirmation bias. Is that something that you've seen a lot in your work with different teams? Or certainly we see it in the media.

Cath:

Yeah, absolutely. I've also worked in the government and with lots of organizations and it's a real trap for leaders confirmation bias and sunk cost bias, with two that really come out. And then I watch the ITV. Drama is compelling, shocking, horrifying and also leaves me fascinated by how these really intelligent people. You don't get to be a leader of something the size of the post office without having a large set of skills.

Cath:

You're highly educated, you're highly qualified and yet in this area you're actually very under qualified in thinking about who do I need to surround myself? What voices do I need to listen to? Am I aware of the biases that could be impacting my decision making poorly? What is the alternative story that I'm not hearing? That maybe you know there's something else out there rather than you know actually just charging along and having everyone around you confirm your bias and play along to it. And I think this is a huge area.

Cath:

We're becoming more aware as we start to think about inclusive cultures and the you know the benefits of diversity, how important it is to hear different voices, and yet often you know we're poorly trained, seeking those different voices, really welcoming them, rather than feeling very defensive and trying to prove them wrong. You can see those sorts of behaviors very clearly occurring. They're brought out in the drama and that's what means a bias continues. There's no challenge, there's no space where you say who isn't in the room? Who would have a different view from us? Who else could challenge this? What are we missing? If you're not asking those questions as a leader, then you're not really doing your job and you become more vulnerable to crises like this escalating in the future.

Colin:

Yeah, that's absolutely right. You don't have the picture. What the research shows is the greatest gains that you can get within your organization is cognitive bias Different people from different backgrounds, with different lived experiences, prepared to share their different views and opinions on what may or may not be going wrong. When you surround yourself with people who just tell you what you want to hear, then you're always going to take the fall, for that. There's always going to be something. Now, the same is true in Cath. You mentioned the sunk cost bias.

Colin:

Now, as someone who worked in projects for the best part of 15 years, it's something that I saw all of the time when I first started working for myself. It's one of the things I used to shine a light on a lot these complex, particularly technology and infrastructure projects that they pour millions and millions of dollars in. Then they get to a point where it kind of all just grinds to a halt. It all goes south, rather than saying wait a minute. Is this still a good idea? Are we still going to get the outcomes that we're looking for? Is this still going to be a good idea and a good thing to do for our customers? Is this a good thing to do for our employees? Instead of stopping and asking that question, they go you know what? We've spent a million dollars on this already. We probably should carry on.

Colin:

Otherwise it's going to look really, really bad to the taxpayer, to the shareholders, if we don't carry on and we don't implement it when the opposite is true. The opposite it looks really really bad If you implement something that's really really poor and that actually doesn't work. The sunk cost bias is essentially where we say, well, I've spent 10 million on this, I've got to keep going, when actually the right thing to do is to sort of say well, I've spent 10 million on it, should I now spend the rest of the 20 million to actually do it? Or should we just admit that this whole thing is a massive flop of failure and is never going to work?

Cath:

Exactly. It's what I call the Macbeth bias, where he got to the point in the play I'm going to go back to my own level, my GCSE, whatever it was back then. I've murdered so many people that I can't go back. I'm going to keep on and murdering some more. That kind of bloody image that we see in that play.

Cath:

Shakespeare knew human nature, didn't he? It's a great example of. We see, perhaps, defense projects and we might maybe have a look in that field another time when we discuss things which again vast amounts of money sunk in, there's a short-termism drive that I don't want to admit now. There's a problem because there'll be a big furorary about why did we spend a million? But of course that's actually less bad than the furorary that comes 20 years later when you've spent 20 million and it hasn't worked. Again, we're driven sometimes to feel short-term. I've got to have a good message to say today.

Cath:

But really it's the leader's responsibility to think long-term, to think about the reputational damage. When they calculated the costs of when they got to a certain point and they did start to think maybe it isn't brilliant this horizon system, they calculated well, we have spent this money. So if we look narrowly at that way, at the numbers, it's better to carry on. But of course, if they had actually calculated the cost of what is happening now, the risk that if this goes wrong and we have a reputational crisis that frankly affects whether the organization can continue or not and the amount of compensation that will be required if those figures had come into the calculations, then they might actually have made a different decision. So, again, the length of time that we take, the perspective we're taking when we're assessing should we go on or not, is really critical here.

Cath:

And to be able to face into the abyss, actually, what's the worst? If we've made this wrong, what would the consequences be of a decision that's wrong here? Perhaps another kind of technique that's really useful for leadership teams to use is the pre-mortem what could go wrong? What are the things that we're going to get found out? For my goodness, they needed to have had a really genuine, deep, searching conversation about that 10, 15 years ago. What's going to go wrong here? Because the very obvious thing if you ask that question is we've got it wrong and the sub-postmasters are right.

Colin:

That's the elephant in the room the whole time, but they don't have the conversation that enables them to look at the elephant, it's almost like they decided very, very early on that the problem didn't lie with the IT system. I have to say, captain, I'll be perfectly honest here, I think the service provider which is Fujitsu I've got really likely in this story so far. I feel it's almost benefited them that the story's been focused on Paula Vennell, the leadership of the post office, and that's absolutely right. But also, from what we've seen in the reporting, is that Fujitsu knew about these problems really, really early on and actually didn't say anything. They didn't bring it to light, they didn't actually say to the post office actually listen, whisper it, but it could be our system. At which point you would expect the post office to go wait what it could be, the system you told us it wasn't the system.

Colin:

I feel that this cone of silence that existed within both organizations Fujitsu, there are problems. We're not going to tell people. From the post office perspective, we've decided that this is the answer and we're going to keep going. I think all this does is deepen the suspicion that we've all had, not least the postmasters who kind of untold emotional harm is even the suspicion that actually people are actively keeping this from, that they are lying in public to our faces. I often wonder how leadership teams and how organizations get themselves into this position and feel like there's kind of an arrogance there to feel like, oh, this will never come to light, we'll be absolutely fine, no one will ever find this out.

Colin:

And I think in this instance they've been well and truly found out. But it leads me to think who's next? Who's that? And you mentioned it right at the start, you know for for other organizations, if you're listening to this, don't think you can get away with this. It's not like the good old days. We could sweep things under the carpet. Culture was a black box and nobody found out stuff absolutely not. And you know what. We're grateful to report sickly pride I could be put weekly in this instance. Actually, keep digging, digging, digging to find out where these problems are so I think you bring up two really important points.

Cath:

That one is around the voices we're hearing and there's this real Sense that if it's said something we believed it more sitting in the post office than we believed our own sub postmasters who are employed by us, who you know I'll part of our family. So that's interesting culturally again, who do you trust, who do not trust? Why not trusting people part of your own organization? What's going on there? So that really should be an alarm bell, the sense that also somehow somebody's got technical expertise. We trust them more than our sub postmaster in the village who of course isn't a computer expert. And of course a lot of them felt Way out of the debt to even begin to understand this. One of the very sinister aspects is how when they phone the computer help line they would be told you're the only one. And that happened to so many of them, which of course is isolating, intimidating, cruel and untrue. So that must have been a deliberate policy because it happened To numerous of them phoning the helpline. They were each told you're the only one. So the people in helpline clearly knew that wasn't the case and that is again a kind of really outrageous way of behaving. No integrity there, no values there. And again, once you come up to sort of thinking about who's coming into paul evenles office, the information she's got from the postmasters and the information she's got from the jitsu, she's going out there, the computer experts. They must be right. And then of course, in the law, in the, when they came to fight cases in the law courts as well, I think some of the judges you know had some really went with the computer experts, some. Actually, one of the very touching cases, were persuaded by a whole village that turned out to say this is a good person, she's not driving a Ferrari, she has helped this village because not only is she sorting out what happens in the post office, she's supporting people. She's, you know, it's the hub of the community. So in that case the judge clearly thought no, something is not right here. And again you know huge alarm bells that others watching this in the post office would have thought what's going on here? I mean, these are not people who've absconded and living in villas. You know, in in the cost of the soul. Again, there's so much evidence if you wanted to look at it.

Cath:

I think the second thing you bring out is this issue of the culture of what's happening at the mid level, because obviously there are lots of people shifting, sharing reports, creating information for All of them, all the directors in the board, and at that level there must have been quite a few red flags, but they'd have had an overwhelming sense that actually to speak up To mention something that's bad news is not going to go down well, is not going to be something I'm praised for, and that's a really critical area to look at in that organizations do people speak up? It's a key element of psychological safety. There's a brilliant book, there's some brilliant research by Megan writes, who writes a, has written a book. She's at Ashefield Business School, ashridge Business School sorry around speaking up in organizations and it's really something to look out for. If you are anywhere as a leader, as a manager, are people able to speak up with uncomfortable truths in your team? If it's not happening, it's not because there are no uncomfortable truths, it's because the culture is inhibiting it.

Colin:

Yeah, psychological safety. I'm so glad you mentioned that, Cath, because this is something that when you work in a great organization culture, essentially what it means is you're free to speak up, you're free to share your opinion without any kind of recourse, and I think it's a clear demonstrate that there is a lack of psychological safety, that people either couldn't speak up or their opinions were just kind of squashed, and particularly for the post office submasters themselves, and you know kind of they pursued these people, they bullied them, they harassed them All of the worst things that you can do to any employees. They did those things and no one ever stopped to ask the question well, kind of, what's the experience for our people? And that's essentially what we're talking about. There'll be people listening to this podcast who are in similar positions, and it might not be fraud, it might not be anything you know kind of that these people were accused of. But you've still got people who behave really, really poorly, who then undermine the safety in the team.

Colin:

And that feeling of well-being, that feeling of knowing you can actually go to work and be the best of who you are on that day For me that's a basic human right. I mean, you know I joke a lot of the time is, if we had the choice, we wouldn't go to work, you know we'd be on, you know, a kind of 365 day holiday. But the fact of the matter is is most of us have to work every, you know, every hour that we can, in order to bring in the money to do the things that we love. And we want to be able to do that without fear. We want to be able to do that and have a say in the work that we do. We want to know that we can contribute without there being any form of retribution, and that doesn't appear to be the case.

Colin:

And you know, often the question that we'll get in our line of work. Well, whose job is it to set that culture? Whose job is it to set the tone? Whose job is it to really make sure that people feel that sense of, oh, I can contribute. And while it's culture is everybody's responsibility, it has to come from the leadership team, Cath, right, they have to be the ones that really set the tone and think about, you know, and one of the things in doing some research for this, I had a look at the post office's purpose and maybe we'll come back to this in a future episode and talk more about purpose, but I think it's striking that the purpose of the post office really talks to the kind of organization that they want to become. We are here in person for the people that rely on us. Well, no one relies on you more than your own staff, and if you're not able to treat them with respect, if you're not able to think about the daily experience, then you're not really there for them at all.

Cath:

Yeah, that says it loud and clear, doesn't it? So it's no good having a purpose statement unless it actually matches up with the experience that people are having. And again, that's what we're doing in this podcast is thinking about the deeper level. What's the experience? What are the behaviors? What are the lived values not the values on the website to help others identify the things that they're maybe not noticing, that aren't turning up in spreadsheets, that aren't on the agenda, but are really critical to the experience we have every day. And it is fundamental.

Cath:

We want to create a workplace where we can perform in a sustainable way, where we can really deliver our potential and we need to thrive. It needs to be somewhere we feel well and we need to feel safe to do that. We need to feel trusted and able to trust others. So this isn't some sort of fluffy luxury. This is actually a critical factor in performance and well-being, and I think the number of crises we now see from the music industry to people working in the army, to healthcare, to the post office scandal shows that we need to get much better at looking at the deeper elements of culture, noticing behaviors, role-modelling behaviors, thinking about the values that we're bringing, looking for where bias is impacting on our decision-making. We've got to spot that stuff because at the moment, it's just getting overlooked too many times, isn't it? And so we want to really focus in on what can we take from this post office scandal.

Colin:

And for me, one of the things if you're a leader or if you're a manager who's in this kind of scenario right now, I still think there is a tendency, if we say nothing, hopefully it will pass, and that was very much evident in Paul Vennell's responses to all of these things. I think Nick Wallace was one of the journalists who broke the story originally. He basically reflected on Paul Vennell's tenure and said when she did finally break her silence in like 2020, she was basically saying listen, nothing that's happened is my fault. Nothing. A lot of it is Fujitsu's fault, because they provided the IT system. Oh, and, by the way, I did make the government worse, so actually they should have been more involved in the decision-making.

Colin:

No humility, no compassion, no sense that she was prepared to take any kind of personal responsibility, whereas my view is and indeed I've given this to advice to CEOs in a similar position, where they've had toxic cultures is To come out and be honest. Demonstrate your humanity. Talk about what what's gone wrong, talk about what you've learned. Don't try and cover it up, don't try and finger point, don't try and blame. And once the the documentary had had on the TV prior to Christmas, she still didn't come out for weeks, I think it was. It was like a week or two weeks, maybe post-Christmas. She didn't actually say anything that you made a point about.

Colin:

There's an ongoing review and she'll contribute to review, great, but still no sense that she, you know, kind of she was in the wrong and that they didn't act sooner and they didn't do things. And I think, you know, one of the things that we Really want managers and leaders to take away is listen. If, if you get a sense that something's not right, yes, you have to investigate it, but you also have to come out and talk to your people. You have to talk about what you've learned. You have to communicate with real clarity. Don't try and you know, kind of obfuscate and and try and finger point and take the blame. As leaders of the organization, it's really up to you to maintain this safe Work space where people can do their best work, you know, and take it upon yourself to own the issues that you actually face right now.

Cath:

Yeah, I think that's gonna be a topic we dig into a bit more. This question of it. For my mind it's integrity. You know, when your gut tells you that something's not right here, that I'm behaving in a way or someone around me is behaving In a way that probably isn't how I behave with my family, when we sort of start to kind of notice that, yeah, something doesn't add up here, we need to face up to it, not cover up. You know we've got to do the opposite of that we want to.

Cath:

You know, there's a moment where we want to bury our head and say, please, can this not be true? But actually when we're in leadership role that's not okay anymore. And I think sometimes in leadership training we focus on can you read the spreadsheet and, you know, can you sort of set some good growth targets and all of that side, and we don't really give people enough time to think about what are my values? Who do I want to be known? And you know, what do I want? What do I want to stand for and to also have a sense of you know what, how the ethics play into my role as a leader. What does that mean to be ethical? What does it mean to me? What does it mean to my organization? How am I going to behave if I'm in a situation where my values or the values of the organization have been compromised?

Cath:

I think we don't get enough development in these areas because we're very narrow. Often we're becoming a brilliant lawyer or brilliant engineer and then we're promoted, we're suddenly in these vast broad roles as leaders, when actually what's most important is to develop that sense of moral compass. Yeah, we and what we want, right.

Colin:

I've got to say sorry. Catherine's just gonna add that what we want is boards to hold people to that and for them to sort of say what is our moral compass? Absolutely right, sorry, every episode.

Cath:

So the whole issue of boards Responsibility for culture is also one that is rapidly changing, and that's a good thing. We're gonna save that for another conversation, I think let's. So each time we have these, we have a bit of a deep dive on a particular issue, a topical issue, of which there are many in this Culture space. We want to just provide some practical takeaways, something to do, something to get curious about, something to uncover. So what's going to be our first thing? What are we gonna advise people to?

Colin:

do. Well, I think one of the things we want people to do is to is to listen to all the voices. Cathy, you know we talked about confirmation bias and only listening to the people that will tell us the things that we actually want to hear. So that would be the. For me, that would be the thing to do listen to the voices. What about? What about something to be curious about?

Cath:

Yeah, I'm gonna pick up your point from earlier to get curious about the human stories and the Impact that whatever you've decided in the board room or in the directors room is having on. You know which people are affected by this, impacted by this, and you actually know what it's like to be a sub post monster. I've actually been and looked at things you know at that end of the hierarchy. So to get curious about the human impact of the decisions you make, the numbers, the statistics, all of that, what are the human stories? And then, lastly, to uncover.

Colin:

Well, yeah, I mean, what are people tell? What are people not telling you that you need to hear? You know, for me, that that's key here. I do think that she's been in this particular instance pull of animals and badly advised but I also think that she didn't actually say, she didn't actually sit and ponder and say what am I not hearing here? And so that would, for me, that would be the thing to uncover great.

Cath:

Listen to voices, get curious about the human stories impacted by whatever your work and your decisions have been. And, yeah, go uncover the bad news that's out there and find out sooner.

Colin:

Fantastic. Well, Cath, great to talk to you about the post office culture today, and look forward to our next show Likewise brilliant, great conversation.

Cath:

Thanks, colin. Thanks for listening to today's inside out culture podcast.

Colin:

Please remember to like, subscribe and, of course, share with others who you think may be interested.

People on this episode

Head Shot

Cath Bishop

Co-host
Head Shot

Colin D Ellis

Co-host