Admiral Sir John Fisher As the First Sea Lord, 1904–1910

Management & Organizational History ISSN: 1744-9359 (Print) 1744-9367 (Online) Journal homepage: http://www.tandfonline.com/loi/rmor20 ‘Favoritism is the secret of efficiency!’ Admiral Sir John Fisher as the First Sea Lord, 1904–1910 Henrikki Tikkanen To cite this article: Henrikki Tikkanen (2016): ‘Favoritism is the secret of efficiency!’ Admiral Sir John Fisher as the First Sea Lord, 1904–1910, Management & Organizational History To link to this article: http://dx.doi.org/10.1080/17449359.2016.1160832 Published online: 16 Mar 2016. Submit your article to this journal View related articles View Crossmark data Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=rmor20 Download by: [Henrikki Tikkanen] Date: 16 March 2016, At: 10:22 MANAGEMENT & ORGANIZATIONAL HISTORY, 2016 http://dx.doi.org/10.1080/17449359.2016.1160832 ‘Favoritism is the secret of efciency!’ Admiral Sir John Fisher as the First Sea Lord, 1904–1910 Henrikki Tikkanena,b aAalto University, School of Business, Helsinki, Finland; bStockholm University, Stockholm Business School, Stockholm, Sweden ABSTRACT KEYWORDS Favoritism in the organizational context is often regarded as Favoritism; cronyism; dysfunctional and detrimental to organizational performance. nepotism; strategic On the other hand, it could function as a tacit-knowledge-based leadership; turnaround; the Royal Navy; Admiral Sir John mechanism for making sure that the right people are in right positions Fisher in an organization, especially under conditions of rapid and forceful change. This study focuses on the leadership of the controversial Admiral Sir John ‘Jacky’ Fisher (1841–1920). Fisher, as the First Sea Lord of the British Admiralty, led the Royal Navy through a signifcant but disputed technological and organizational turnaround during the pre- World War I (pre-WWI) naval arms race between Britain and Germany. Fisher saw that he would achieve his aims essentially by appointing his favorites and cronies to key positions throughout the naval organization. The aim in this study is to highlight the most important facets of the phenomenon from a strategic-leadership perspective. Favoritism, the supposedly unfair practice by a powerful person or a group of persons of giving jobs, positions, and other favors to relatives or favorites, tends to be perceived as dysfunctional and detrimental to organizational performance. In general, it is argued that favoritism, and the related practices of cronyism and nepotism, in the appointing of people to routine jobs are likely to cause severe problems to the organization, hampering its Downloaded by [Henrikki Tikkanen] at 10:22 16 March 2016 performance at least in the long run (see e.g. Arasli, Bavik, and Ekiz 2006; Khatri, Tsang, and Begley 2006). On the other hand, some studies put forward a more positive view of what is generally termed favoritism: it allows leaders to ensure the functioning of the organization in situations in which it is impossible to accurately and objectively monitor and incentivize subordinate behavior and performance (Prendergast and Topel 1996; Bellow 2003). In particular, this might be the case of visionary leadership in forming well-functioning top-management teams. Favoritism may thus constitute a tacit-knowledge-based mechanism for ensuring that the right people occupy the right positions, especially in times of rapid and forceful change. From an ethical and philosophical perspective (Cottingham 1986), this study adopts the more positive view of favoritism, nepotism, and cronyism. The focus is on the leadership of CONTACT Henrikki Tikkanen henrikki.tikkanen@aalto.ﬁ © 2016 Taylor & Francis 2 H. TIKKANEN the controversial Admiral Sir John ‘Jacky’ Fisher (1841–1920) during his frst tenure as the First Sea Lord of the British Admiralty in 1904–1910.1 Against the backdrop of the emerging Anglo-German naval arms race before World War I, Admiral Fisher led the Royal Navy (RN) through a signifcant technological and organizational turnaround,2 sometimes termed Sir John Fisher’s naval revolution ( cf. Sumida 1989; Lambert 1999; for recent papers on diferent historiographical viewpoints to Fisher’s ‘revolution’, see Bell 2016; Seligmann and Morgan- Owen 2015). For instance, powerful new types of capital ships were introduced, including the Dreadnought battleship and the battle cruiser. Despite problems in its conception and implementation, the turnaround proved decisive for the ability of the RN to efciently wage war against the Germans in the forthcoming war, which Fisher foresaw (Bell 2016, 115). In the face of staunch resistance by a traditionalist group of high-ranking ofcers (the so called ‘Syndicate of Discontent’) in the Senior Service, Fisher and his team were adamant to try to push through a radical transformation of the RN before war broke out. For instance, hundreds of old, obsolete vessels were scrapped, and their crews were transferred to modern ships. Admiral Fisher saw the appointment of his favorites and cronies (i.e. the members of ‘the Fishpond’) to key positions throughout the naval organization as one of the most central prerequisite to be able to realize his aims in the turnaround process3. What is more, Sir John was also efcient in mobilizing a wide societal network to support his cause, ranging from King Edward VII to key journalists and politicians. He has been credited with coining the phrase: ‘Favoritism is the secret of efciency!’. According to Fisher’s memoirs, it was a phrase that was often used by his early commander, Admiral Sir James Hope, under whom he served in the Far East as a young ofcer (Fisher 1920, 29). Fisher’s own leadership ideology was thus essentially based on the use of favoritism to achieve his (often-contested) aims. In recent scholarship, the so-called post-revisionist historians essentially make the same argument: ‘the Fisher revolution’ was less about an ‘out-dated single-personality-driven-approach’ and more about the complex administration of the Admiralty, in which Fisher and his disciples were able to overcome resistance to several important but most-often essentially evolutionary reforms with varying degrees of success (Seligmann and Morgan-Owen 2015, 939). Consequently, the objective of this study is to ofer a historical analysis of Admiral Fisher’s favoritism during the naval revolution of 1904–1910 that will highlight the most important facets of the phenomenon from a strategic-leadership perspective. Downloaded by [Henrikki Tikkanen] at 10:22 16 March 2016 Favoritism from an organizational perspective Several studies in the felds of organization research and the social sciences in general report the negative efects of the related phenomena favoritism, cronyism, and nepotism on job satisfaction and job stress, claiming it as a problem for human resource management (Khatri and Tsang 2003, 289–303). Many of these studies were conducted outside the Western context in cultural spheres with especially strong traditions of favoritism and nepotism. A key result is that the non-favored members of the personnel gradually started to exhibit long- term attitudinal and motivational problems (e.g. job and organizational dissatisfaction and stress, leading to absenteeism and high employee turnover), resulting in declining personal and organizational performance. Many governmental and other organizations have historically instituted more or less strict anti-nepotism policies (e.g. the US federal government in the late nineteenth century), aimed at curbing the power of superiors in the subjective evaluation and promotion of their MANAGEMENT & ORGANIZATIONAL HISTORY 3 subordinates. In the most extreme cases, favoritism is considered almost equal to bribery (Loewe, Blume, and Speer 2008). On the other hand, some recent approaches to favoritism are characterized by a more positive viewpoint. For instance, Bellow (2003, 11) argues for a ‘new nepotism’, as is evident in politics, business, and all professional life, when leaders efectively seek to promote their merited ofspring or favorites to positions of power and infuence. The author further posits that because nepotism is rooted in our biological nature, it should be dealt with openly, and treated as a leadership and organizational capability that can be practiced well or grossly mismanaged. On a philosophical level, Cottingham (1986, 357) makes the case that favoritism in human behavior is, in fact, inevitable and even desirable. Impartiality in diferent decision situations is deemed practically impossible, or even immoral – and against human nature. What is more, whereas impartiality and relative objectivity may be recommendable in many organizational situations, at least in the case of routine jobs and lower-level positions (not least because most employees would probably naturally expect that from their employer), what takes place in the upper echelons may be drastically diferent. It has been established in strategy research that CEOs tend to hand pick their top-management teams to match their personality and leadership style (Rotemberg and Saloner 1993; Peterson et al. 2003). Favoritism is often defned in the literature as favoring a person not on the basis of merit but because he or she belongs to a favored group, or solely on the grounds of the personal likes and dislikes of the superior. Cronyism, in turn, is a specifc form of favoritism, referring to partiality toward friends and close associates. Finally, nepotism is traditionally defned as ‘the bestowal of patronage

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