The Observer
Sunday February 3, 2008

Flat Earth News

by Nick Davies
Chatto & Windus £17.99, pp320

Dog does not eat dog. This, as Nick Davies says, is an old Fleet Street convention. His latest book is 'a brazen attempt to break that rule'. It is a task that Davies more than fulfils, swallowing the leash and kennel for good measure. His diet sheet includes the British newspaper industry, its regulators and the PR machine that supplies it. Davies's title defines what he sees as lies, distortions and propaganda, all accepted without question.

Before we really get under way, let us state that we respect and admire the work of quite a few business journalists, even if we disagree with some of them. The best of business journalism tends to come from feature writers and business editors.
Right! Having put down this marker, we can return to the quote from this piece.

Its author, Nick Davies, sponsored research by Cardiff University, who surveyed 2000 UK news stories from the four quality dailies (Times, Telegraph, Guardian, Independent) and the Daily Mail. They found some very interesting things. First, when they tried to trace the origins of reported 'facts', they discovered that only 12% of the stories were wholly composed of material researched by reporters. With 8% of the stories, they just couldn't be sure. The remaining 80%, they found, were wholly, mainly or partly constructed from second-hand material, provided by news agencies and by the public relations industry. Second, when they looked for evidence that these 'facts' had been thoroughly checked, they found that this was happening in little more than 10% of cases. Davies says: "Where once journalists were active gatherers of news, now they have generally become mere passive processors of unchecked, second-hand material, much of it contrived by PR to serve some political or commercial interest. Not journalists, but churnalists."
This resonates with our experience. Mostly, when we have been involved with an organisation and are familiar with the internal reality, our minds have boggled at the distorted rubbish peddled by most business journalists. Its not just that they fail to understand what is really happening: Much worse - most of them have not the faintest idea of how businesses work, portraying them as some kind of soap opera populated only by high profile actors. The working core of businesses, the parts that create value, are ignored because they are invisible to ignorant distant outsiders. At this point it behoves us to give some substantiated examples.....

1. Flat earth news: An award-winning reporter exposes falsehood, distortion and propaganda in the global media. Nick Davies, Chatto and Windus, 2008.


most of the press tend to ascribe achievements that took hundreds, frequently thousands of people as though they were accomplished by one man.
Here is an example:

It concerns Sir Graham Wilkins, an individual known to the author, who died on July 2, 2003. Sir Graham was chairman of Thorn EMI plc at a time that I was working for that then troubled company. I would start by saying that Sir Graham was regarded personally by those who came into contact with him as a good-humoured and experienced man.
He was projected into the role of chairman from non-executive director following the sudden dismissal of Peter Laister as chairman and chief executive, following a period of hyperactivity in which Thorn EMI (itself the result of a 1979 merger) attempted to create a merger with British Aerospace and did make the acquisition of Inmos, a semiconductor manufacturer, which proved to be a financial disaster.
However, the writer of Sir Graham's obituary says, "While his predecessor at Thorn EMI had gained an unfortunate reputation for prevarication, Wilkins was focused and decisive". How trying to engineer the biggest merger in British industrial history could be construed as 'prevarication' beggars the imagination!"
The writer goes on to say, "Recognising that there was excess capacity in the television manufacturing industry, he restructured Ferguson and cut a thousand jobs. He made management changes at Inmos, Thorn EMI's struggling semiconductor business, and supervised an overhaul of the roster of artists signed by EMI, which had become unbalanced".

The reality of the matter was that the board appointed Colin Southgate as Managing Director at the same time as Sir Graham became part-time chairman. Peter Laister was fired because of breathtaking over-activity, not prevarication.

Southgate, with a growing group of new appointees whom he and his colleagues brought into the company at corporate and business group levels, instituted an extensive and detailed review over several years of the whole range of Thorn EMI's many businesses. The key to the success of the turn-round of Thorn Emi's fortunes was very detailed operational knowledge and focused improvement and restructuring programmes, together with extensive disposals, conducted by a large cast of corporate and operating managers, led by Southgate.
Sir Graham was a million miles away from this operational and detailed knowledge. He did not understand the music industry, nor had he ever encountered an artists' roster. He did, however, provide valuable weight to a relatively inexperienced corporate team in communicating with the financial markets.

In such cases, visible leaders are lionised and their achievements the subjects of false attribution error, as so clearly demonstrated in the case of Wilkins.


the press is highly responsible for the awful tendency to lionise individual leaders 2 leading them to egocentric behaviour and frequently their eventual downfall. The sad case of Lord Browne, ex -CEO of BP, who for many years could do no wrong, nay even walked on water, is a good example of a collusive relationship between elements of the press and Lord Browne's PR machine. Eventually, as in the case of most superstar CEOs', the party came to an end and BP was revealed to have caused loss of life and significant environmental damage under his leadership. The sad twist in this tale was that he had to stand down because of a personal matter unconnected to his job - but such is the life of the superstar that the slightest blemish is punished.
Here is another example:

"He was dressed casually, almost carelessly, like his troops, and he wore his hair combed off his face in the style of Hollywood producers and Wall Street financiers. He was assiduously fit; his eyes were ice blue and his gaze was steady, and he spoke in clipped, flat, supremely confidently tones. Everyone at Enron knew that Jeff was twice as smart as they were - twice as smart as they could ever hope to be - and they hung on his every word".

The subject of this eulogy was of course, Jeff Skilling, CEO of Enron, rated at one time by Fortune magazine as 'America's most innovative corporation'. Skilling was sentenced to 24 years in jail for his part in the Enron scandal. A friend recently pointed out a similar romantic attachment to highwaymen in the eighteenth century.

2. The Curse of the Superster CEO. Prof. Rakesh Khurana. Harvard Business Review, September 2002.


influential parts of the business media promote dogma as though it was eternal verity. The best current example of this is the acceptance by most of the Anglo-Saxon press that free-market economics is the best philosophy for creating wealth and general prosperity. This has become almost axiomatic and certainly seems to represent the view of most newspaper proprietors. An honourable exception to this is The Guardian, which is protected from dogmatic owners because of its ownership by an independent trust.

This is not rigorously substantiated, but a rapid count of the hundreds 3 of Institutes and Foundations pushing the free market message must also have an effect on what journalists write, if Nick Davies is to be believed.

One journal that we willingly forgive is the Economist magazine, which has an unashamed free-market bias - and articles that consistently push the free market line. At least the Economist is open about it, which allows others to agree or disagree with their line as they wish.

Final words

should be left to Mr. Davies: "An industry whose primary task is to filter out falsehood has become so vulnerable to manipulation that it is now involved in the mass production of falsehood, distortion and propaganda".
Strong words, Mr. Davies, but, alas, too often true.

UK Industrial Policy Eviscerated
◄ Previous article
New technologies and government
 Next article ►
People at work
Go to top