For once we’re not talking about Nick Clegg, but Nick Buckles, the beleaguered chief executive of G4S, the security provider for London 2012. This week he went in front of Parliament to explain what had went wrong and committed a cardinal sin, he admitted his company was a failure. This is otherwise known as doing a Gerald Ratner; what he should have in fact done is said that there was no problem and that the security would be covert… Invisible security guards, thousands of them, no problems whatsoever!
I jest of course, but it’s hard not to see the funny side of this. There’s a joke going on at the moment – “How many G4S guards does it take to change a light bulb?” Answer – “Six soldiers and a policeman!” Sadly for Mr. Buckles however, this is likely to cost him his job, he has potentially cost his company hundreds of millions and damaged the reputation of G4S so badly that there are reports surfacing of police forces around the country reconsidering plans to outsource some of their functions to the company.
Putting aside all the fallout from the mishap, it’s easy to see why this situation has been allowed to occur. The BBC reports that G4S were “encouraged” to keep wages low, meaning that the demand for jobs would be minimal, and that the people applying would only need minimal disincentive in order to not want to work. More damning however is their JIT (Just-in-Time) system. In the automotive industry, JIT allows for components to arrive at the manufacturing line just in time for them to be fitted. G4S tried to do the same thing with staff, employing them just prior to the games. If some dropped out then it would be no big deal, since you could just go along the line.
The problem was this isn’t what happened, in fact, what happened is they couldn’t get enough people into the pipeline, even after relaxing the evaluation criteria, and now we find ourselves in the situation where G4S are paying for additional army personnel to fill the shortfall. The government is now desperately trying to claw back some of the fees owed to G4S for breach of contract, and quiet rightly so, however, if they are responsible for causing this situation in the first place, then should those who insisted on the wage caps be held to account to?
While the G4S model would work if you need 100, perhaps 1000 guards, but when you need ten times that many, it was clear to see they’d never be able to provide the numbers. It would have been much better for them to start recruitment earlier, and provide contracts with fixed start dates at an early point. Once contracted there is a reasonable expectation that they’ll turn up, however it is then possible to recruit stand-ins just in case.
Whatever happens now though, the damage has been done, G4S said that it went into this contract to build its reputation, ultimately however it could be the worst mistake they have ever made!