Is there a correlation between indulgent new head offices and an organisation in decline? The NAB certainly seems to be a case in point aand many more examples have poured in to Crikey.
Victorian Premier Steve Bracks has this week launched construction of the indulgent new $165 million head office and club for Victoria’s mutual version of the NRMA, the RACV.
Over the years we’ve noticed a strong correlation between managements that have lost their way and new purpose built head-office buildings so it now appears likely the RACV is headed for a major fall.
Afterall, NAB announced they were building a new head-office in Docklands last year and suddenly hit the wall to the tune of $4 billion on Homeside. ANZ was almost going broke just as its new wood-panelling was being installed on the top floors of its 100 Queen Street head office in 1992-93. The disasters that followed the contruction of Battlestar Gallactica for Coles Myer in the 1980s have been well documented and even Shell Austalia must regret constructing a purpose built head office in Melbourne in the 1980s which they are now completely vacating and moving to the burbs for reasons that Crikey cannot fathom.
Can anyone else add to this “new head office spells disaster” list.
Crikey’s sister opens the batting on this one
Re your comments on purpose built headquarters as a sign of impending decline, I once read a whole chapter on this subject in the book “Parkinson: the law” by C. Northcote Parkinson (1979). His explanation for the phenomenon is:
“It is now known that a perfection of planned layout is achieved only by institutions on the point of collapse. This apparently paradoxical conclusion is based upon a wealth of archaeological and historical research, with the more esoteric details of which we need not concern ourseleves. In general principle, however, the method pursued has been to select and date the buildings which appear to have been perfectly designed for their purpose. A study and comparison of these has tended to prove that perfection of planning is a symptom of decay. During a period of exciting discovery or progress there is no time to plan the perfect headquarters. The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is death.”
His examples to illustrate his theory are: The Papacy and St Peter’s in Rome, The League of Nations and its Palace of Nations, the French monachy and Versailles, The Duke of Marlborough and Blenheim Palace, the British monarchy and Buckingham Palace, the British Parliament and Westminster (he argues Parliament’s decline can be traced to the Reform Act of 1867 when initiative in legislation passed from Parliament to the Cabinet and the role of the humble, non-cabinet MP declined), British imperial rule and the Colonial Office building, and British rule in India and New Dehli.
Towering monument to Tim Marcus-Clark in Adelaide
Even Adelaide had its share of grandiose Head Office projects by troubled organisations back in the 80s. That famous Victorian, Tim Marcus Clark, who moved to Adelaide in 1984 amazingly to try and make the newly merged State Bank of SA a global monolith (!!!!!), was a classic example.
He proceeded to build the largest office tower in Adelaide (32 storeys, and still the largest). Even the flight paths of nearby Adelaide Airport had to be changed because of this man’s influence at the time. Everyone knew of the Marcus Clark’s ego and his desire to have the biggest erection ever seen in Adelaide. Additional to the enormous building costs he had the State Bank floors fitted out lavishly, even by eastern states standards. Rumor had it he also owned the furniture company that did the expensive fitout. The art collection and wine collection were also talking points amongst the establishment in Adelaide at the time. Rumor has it that much of this “disappeared” shortly after the State Bank collapse in 1991. Marcus Clark now lives in comfortable retirement in leafy Hawthorn, Melbourne. The State Bank debt still lingers to this day in SA.
Tommy the Teller, Adelaide
CRIKEY: We very much doubt some of these rumored bits but the monument issue is absolutely clear cut. Monuments in Kalgoorlie
Last year, an administrator was appointed to the Goldfields Medical Fund, a venerable mutual health fund based in Kalgoorlie Western Australia, when its reserves were depleted below the permissible levels.
Membership of the Fund had quadrupled (or some such impressive feat) since the introduction of the lifetime health cover and 30% rebate, and so GMF was building a new $2 million headquarters on Boulder Road to house the larger staff requried.
The Administrator has the unfinished building up for sale, is putting up health insurance premiums, and has cancelled heaps of local sponsorship deals which the management had organised.
GP House a shocker
I’d offer the proposed GP House in Canberra as a recently failed attempt to edify past and more current disasters. The RACGP had lost the plot before they conspired with the feral guv’mint to introduce Vocational Registration and restrict provider numbers in the early 90’s, but it took their recent employment of Jabba as consultoid after his retirement from the health portfolio and the seats of power to really bring them the attention they deserve.
Jeff Kennett’s indulgences
A subscriber asks:
Didn’t Jeff Kennett spend a squillion on refurbishing offices at Treasury Place in Melbourne a year or so before he was unceremoniously turfed out?
CRIKEY: He spent about $20 million refurbishing his office in 1994-95 but I worked in there and it was totally justified. The outrageous thing he proposed was to spend $80 million extending Parliament House but eventually he backed down. Jeff was Australia’s greatest monumentalist in 100 years and the people in the bush who did not benefit eventually turfed him out.
State Banks that went over the top
The State Bank of Vic head office at Elizabeth and Bourke should be on the list.
Also, I was told that the NAB acquired it’s current HO at 500 Bourke from a customer that went bellyup in the ’80s – don’t know the details though.
Didn’t Nick Whitlam recently preside over a major refurbishment of the old Amex building for NRMA in George Street, Sydney? I haven’t been there for a while, but Crullers may know. This follows Nick’s 1980s black glass and granite effort at the State Bank of NSW in Martin Place – remember the gold plated fire sprinklers on the level 35 and 36 executive floors?
Did BHP start to head for the rocks under Prescott after moving to Bourke and King?
Cheers, Glenn Moore
CRA’s Taj Mahals
CRA Exploration went mad building glossy offices in each state capital 18 months before being bought out by RTZ and merged into semi-oblivion. Coles Myers “Battlestar Gallactica” HQ is cited by the new CEO as a disaster for all concerned.
The Ansett terminal in Sydney
Does the new Ansett terminal at Sydney Airport count? :)))