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Creative Industries

My Lords, I am very grateful to the noble Lord, Lord Bragg, for initiating this debate. He continues to make a great contribution to cultural life in this country and his opening words reflect the breadth of that experience. As I am sure the noble Lord would agree, the pivotal challenge in any creative enterprise is to manage the creative talent. That talent is sometimes difficult, usually arrogant, often self-important, but it is the engine of everything that we do. The best managers in these industries are, unfortunately, also often difficult, arrogant and self-important, and I declare the interest of being one myself. I have spent my entire working life managing creative people in the media, marketing, PR, arts, advertising, graphic design—all those kinds of activities—and I have bought and sold, downsized, upsized, and built and broken creative businesses in just about every part of the world. So this debate offers me the opportunity to try to answer three interrelated questions which have often puzzled me. First, what makes a good manager of creative enterprise and talent? Secondly, why does that talent rarely succeed when transferred into the public—that is to say, government-supported—arena? Thirdly, what can Government do to establish a greater pool of such managers and, therefore, help in that transition? First, what makes a brilliant manager of creative people? I could recite a litany of character traits, but I want to emphasise just three or four as they will lead to answers to the other questions that I posed. First, these managers have an obsessive dedication, focus and concentration on the activities of the enterprise. Some managers make it all look so easy, but their focus is absolute and demands 110 per cent of every minute of every day. Secondly, they believe, without remainder, in their own judgment. They cannot be wrong. They believe themselves to have an instinctive understanding of what the customer wants and how the enterprise can be organised to respond to those needs. That umbilical chord between the customer and the manager is absolute. That is why accountants can very seldom manage creative people. Thirdly, this kind of manager, together with their creative partners, tears up the rule book as they go. They break conventions. They establish new rules and new codes of business activity. If that originality is lost, the whole creative process begins to collapse and the enterprise becomes mediocre, with the inevitable loss of market differentiation. But there is one space, as the noble Lord, Lord Bragg, pointed out, in which the manager and the creative will often have guaranteed conflict—over money. So often, really creative people feel shackled by what they see as mundane financial constraints. Great managers of the creative process, however, believe exactly the opposite: they believe that financial controls make for greater creativity and financial laxity for creative mayhem. If the skilled manager can get the creative to agree the financial agenda, the enterprise can really sing. It is a golden place to find yourself. It rarely lasts for long, but for a fleeting moment, the commercial music can sound celestial. So why have these managers such a poor record in public service? We can all think of some who have made it, but there are so many more who have failed or who just have not bothered. Let me offer some possible reasons. The first is management style. A great manager gives the impression of providing free rein to those who work for him, delegating authority and managing with a light touch, with little attention to soft issues such as time-keeping, dress code and so on. In a large corporation, such light-touch management is almost impossible to achieve. The second is the rule book. I have about 1,600 creative people working for me at the moment, and every day we tear up the rule book at least once. In many of our businesses there appear to be no rule books at all, or at least the rules which apply to one part of the group do not seem to apply to another. Public corporations are held together by rule books. Thirdly, in businesses our size, the customer—the user—is the centre of the organisation. There are no organisation charts; there is a dartboard, with the customer in the bull’s eye and everything is gathered around him. That is almost impossible to achieve as companies grow, developing or inheriting different masters or stakeholders to whom management must answer—particularly Government! The fourth is meetings. We simply do not have them. We hate them. The best-run creative groups just work with the people they like, in an atmosphere they like, in a way that they like. Meetings spoil all that. Meetings are for suits and for accountants. Big public organisations thrive on meetings. You have to have them. You need to be accountable. Finally, the ultimate bugbear: accountants, red tape and targets. It does not mean that they are wrong; it just means that they establish an environment that is, or at least feels, counter-creative. Can we increase the number of these gifted managers so that more chance their arm in the public sector? I have five observations for your Lordships to consider. First, most new creative businesses are SMEs. The sources of risk equity and long-term capital for this sector are drying up. This is the 1930s Macmillan gap all over again. We must address this issue immediately, particularly since the recent banking collapse. Secondly, these smaller businesses, as has already been pointed out, are throttled by regulation: employment law, health and safety, and any amount of other legislation and red tape which is not only inappropriate but stifles growth and enterprise. Thirdly, tax issues in creative industries are all about income and founder equity. To have top people working for more than 60 per cent of the year for the Government and facing a rise of 80 per cent in capital tax on equity will not encourage entrepreneurship. Fourthly, we need London to be the global centre of all the creative industries. How can we attract more and more people in this global, creative and digital world to make London the centre of their creative businesses? Finally, we should start in the schools and the universities, particularly the schools. We should look at the work of organisations such as the Enterprise Education Trust, which has 50,000 children up and down the country involved in more than 1,000 business appreciation courses. As we recognise the importance of the creative industries to our economy, our focus must also be on encouraging, motivating and rewarding those who successfully build and lead these creative enterprises. They are not just the source of national wealth, they are the future of our state-owned creative industries too.