When one of Britain’s most venerable companies succumbs to a foreign takeover, it is never a happy day.
Not even for a business like RSA Insurance Group, which does not tug on the nation’s heartstrings in the way Cadbury did when it was sold to US giant Kraft. Motor insurance policies just don’t appeal to our sense of nostalgia in the same way as a Creme Egg or a Wispa.
One pandemic side-effect has been the spate of overseas bids for UK companies, including security group G4S, retirement home provider McCarthy & Stone and bookie William Hill. But today I am not about to lament the sell-off of great, and indeed not-so-great, British companies.
Rapid reinvention: British businesses have already adapted to the problems posed by coronavirus
The sale of RSA, the insurer formerly known as Royal Sun Alliance, prompts another line of thought, which is that new ideas, companies and industries are spawned by crises. No doubt the coronavirus pandemic will be the same.
RSA was founded after the Great Fire of London of 1666, which led to the creation of the modern insurance industry.
Previously, property insurance barely existed but by 1690, one in ten London houses was covered. The insurers set up their own fire brigades, and identified properties owned by a policyholder with ‘fire marks’ – plates displayed on a door or wall – so the firemen knew which dwellings were insured. The insurance market that rose out of the ashes in the London of 1666 is still one in which the UK is a world-leader.
Another historic precedent for corporate innovation was the Great Depression in 1930s America. A famous example is Procter & Gamble which then, as now, sold household and personal care products including soap. Bosses had the idea in the early 1930s of advertising the company wares through programmes on the radio – a newly popular form of entertainment.
P&G launched its first radio series, ‘Ma Perkins’, sponsored by its laundry detergent brand Oxydol, about the adventures of a kindly widow. By 1939, it was producing more than 20 radio shows.
The soap operas we watch today, Coronation Street and East Enders, have their origins in the ingenuity of business when faced with tough times.
Pub companies today are among those hardest hit by the pandemic, but at least there is furlough for staff. They might glean some comfort from the fact that, between 1920 and 1933 in the US, alcoholic drinks were outlawed, yet still brewers survived: some of the best-known names today, including Coors and Anheuser Busch, made it through Prohibition by diversifying into selling meat, soft drinks, even ice-cream.
British businesses have already adapted to coronavirus. When one sales outlet closes, they find a way to open another. Firms have shifted production to help the national effort, switching from drinks to sanitisers, designer fashion to NHS scrubs, submarine technology to ventilators.
And the pace within companies has dramatically accelerated. We can see that in the race for a vaccine, but also in the way companies such as Marks & Spencer have recognised the need for rapid reinvention.
The pandemic will result in new ways of living and working. The virus could be a catalyst for faster action on climate change – which Mark Carney today identifies as the biggest commercial opportunity in our generation.
Many readers will feel disillusioned with politics here and in the US. But there is some consolation that business has been finding solutions – and ways to carry on making money – for hundreds of years.