In 1989, the billionaire investor Warren Buffett wrote a letter reflecting on what was then his 25-year stewardship of Berkshire Hathaway. His “most surprising discovery” was “the overwhelming importance in business of an unseen force that we might call ‘the institutional imperative.’” Buffet told investors that he initially thought “decent, intelligent, and experienced managers would automatically make rational business decisions.” In fact, he discovered, this was untrue. The crucial thing was the system.
It was almost a law of business, Buffett wrote, that institutions will resist change, waste time, produce evidence to support the whims of whoever is in charge, and mindlessly imitate the behavior of rival companies. The lesson he took from his insight was to organize his company in ways that minimized the dangers of systemic failure and to invest in other companies that also seemed to understand this risk.
Buffett’s law has entered the annals of business theory, and been held up by an array of leaders—among them Dominic Cummings, Prime Minister Boris Johnson’s most influential adviser.
Cummings’s belief in this worldview goes a long way toward explaining the ongoing tension between the U.K. government and the institution it is asking to enact its agenda: the British Civil Service. The tension exploded into public view this weekend with the abrupt resignation of the most senior official in the Home Office following repeated disputes with his political master, Home Secretary Priti Patel, who has been tasked with introducing an entirely new immigration regime in just 10 months. It was also on display in the revelation that the British government opted to leave the European Union’s pandemic early-warning system, despite calls from health experts to remain. But while the clashes, particularly at the Home Office, appear to have been personal and specific, involving accusations of bullying and leaking, or of placing ideology over pragmatism, they are also systemic and general, revealing a clash of ideas that is only likely to intensify, and not just a clash of personalities.