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A Computer Called LEO: Lyons Tea Shops and the world’s first office computer
Georgina Ferry
The eccentric story of one of the most bizarre marriages in the history of British business: the invention of the world's first office computer and the Lyons Teashop.The Lyons teashops were one of the great British institutions, providing a cup of tea and a penny bun through the depression and the war, though to the 1970s. Yet Lyons also has a more surprising claim to history.In the 1930s John Simmons, a young maths graduate in charge of the clerks' offices, had a dream: to build a machine that would automate the millions of tedious transactions and process them in as little time as possible. Simmons' quest for the first office computer – the Lyons Electronic Office – would take 20 years and involve some of the most brilliant young minds in Britain.Interwoven with the story of creating LEO is the story of early computing, from the Difference Engine of Charles Babbage to the codecracking computers at Bletchley Park and the instantly obsolescent ENIAC in the US. It is also the story of post war British computer business: why did it lose the initiative? Why did the US succeed while British design was often superior?
A Computer Called LEO
Lyons Teashops and the World’sFirst Office Computer
GEORGINA FERRY
Contents
Cover (#u7a3a10ec-df27-5e6f-a52b-f898fe1a3a64)
Title Page (#u46915dae-c395-5a12-a949-ba6c653c38a5)
Preface (#u514630c6-ee2b-5040-91f4-e0e7491c5124)
1 A Mission to Manage (#u1b47867c-5260-52ee-9e79-9f139100b754)
2 The Electronic Brain (#u1aa744cb-8b9e-5c58-8215-f90a3392e6bb)
3 Made in Britain (#ud74fa228-c33c-5687-a1aa-4405e818ef04)
4 A Computer for Lyons (#litres_trial_promo)
5 LEO goes to work (#litres_trial_promo)
6 In Business (#litres_trial_promo)
7 Leo’s Last Roar (#litres_trial_promo)
Epilogue (#litres_trial_promo)
Sources (#litres_trial_promo)
Index (#litres_trial_promo)
P.S. Ideas, Interviews & Features … (#litres_trial_promo)
About the Author (#litres_trial_promo)
Profile of Georgina Ferry (#litres_trial_promo)
Snapshot (#litres_trial_promo)
Top Ten Favourite Books (#litres_trial_promo)
About the Book (#litres_trial_promo)
A Critical Eye (#litres_trial_promo)
Imagining the Future (#litres_trial_promo)
Read On (#litres_trial_promo)
Have You Read? (#litres_trial_promo)
If You Loved This You’ll Like … (#litres_trial_promo)
Find Out More (#litres_trial_promo)
Acknowledgements (#litres_trial_promo)
About the Author (#litres_trial_promo)
Praise (#litres_trial_promo)
Copyright (#litres_trial_promo)
About the Publisher (#litres_trial_promo)
Preface (#ulink_65c9293d-f53c-5c44-a0ea-03f4a80fcd82)
MEET THE £150,000 ROBOT THAT KNOWS ALL THE ANSWERS.
Puzzled? LEO the Brain Will Do Your Thinking For You.
Robots have begun taking over work which is too complicated or too laborious for human beings. In cold print this may seem fanciful. But now one is confronted by LEO, Britain’s new electronic brain … He is the only one of his kind on commercial work in the world.
Evening News, 16 February 1954
What is there in a name? Plenty if it is LEO, for it is a name coined at the dawn of computer technology, that has carried with it a long list of first achievements. For that reason alone it merits perpetuation.
Engineering, 5 March 1965
To some, it was a supreme irrelevance, a quixotic venture into the unknown by a respectable family business that ought to have known better. To others, it was an enterprise of boldness and vision, whose ultimate failure resulted from the conservatism and short-sightedness of others, and whose story contains lessons that succeeding generations would do well to learn.
LEO was a computer. It burst into the British public consciousness through a snowstorm of popular articles in February 1954, although its genesis lay some years earlier. It was not the first computer in the world, by any of a number of possible definitions. As a piece of electronic engineering it was not fundamentally original. LEO and its creators deserve their place in history not because of what it was but because of what it did. For LEO was the first computer in the world to be harnessed to the task of managing a business. That business was J. Lyons & Co., renowned the length and breadth of the land for its fine tea and cakes, available in grocers’ shops everywhere but savoured especially in the Lyons teashops, a chain of more than two hundred high street cafés.
LEO was designed and built by Lyons’s own engineers, and its first programs were written by Lyons managers before the computer programmer existed as a job description. At the time, the few who knew anything about computers thought of them as tools for scientists and mathematicians. LEO was a novelty in that its circuits hummed not with non-linear equations but with the hours worked and rates of pay for the bakers who produced, among other things, 36 miles of Swiss roll per day. Rather than calculating missile trajectories (though it could do that, too), LEO grappled with the task of restocking each teashop every day with no more and no less than it needed to keep its customers supplied with bread rolls, boiled beef and ice cream. It even turned its attention to ensuring that Lyons continued to produce the perfect blends of tea on which so much of the company’s reputation rested.
Fifty years later it is hard to imagine a time when the computerisation of such activities was remarkable or even revolutionary. Today we use computers not only for all forms of record-keeping and financial management but to go shopping, to teach children, to fly aeroplanes (and to write books). They have become an extension of more or less every human cognitive capacity, and invaded every area of human activity. Off-the-shelf software packages have removed the need to understand how computers work or to speak their language – instead it is we who are programmed to point and click. But to reach this point we had to start somewhere, and LEO was in at the beginning.
LEO’s development brought about the convergence of two histories that until that point had been quite separate: the history of computers, and the history of office management and office machines. In this it anticipated by at least five years IBM, a giant of the office machines business in the first half of the twentieth century but a relative latecomer to commercial computers. LEO’s creators were acutely conscious of their pioneering role, and were not slow to exploit the opportunities of their position. Soon after LEO’s first public debut, with several applications running successfully on a single machine and interest building from outside the company, Lyons set up a subsidiary called Leo Computers Ltd, with the intention of manufacturing computers for sale to other businesses.
A background in catering is not normally seen as an obvious qualification for high-tech start-up companies, and Leo’s later history showed that many potential customers and others found this hard to swallow. They made the mistake of judging Lyons by its best-known products: cake-making was seen as a light and fluffy enterprise, a far cry from the sparks and sinews of electronic engineering.
Nevertheless, the advantage gained simply by being first in the field meant that for a brief period in the late 1950s Leo Computers Ltd was one of the leading computer manufacturers and computing consultancies in Britain, if not the world. That shining moment of glory was achieved by a small group of individuals whose vision of what computers could achieve – and how to manage them so that they fulfilled their potential – showed a creative imagination unmatched in their time by those running any other business. Their story has now been all but forgotten, except by those who participated directly and the slightly wider circle of computer history buffs. As we move into a world in which it seems there is no business that is not e-business, it seems timely to look again at how it was that technology, commerce and management converged in a British catering firm to produce the world’s first business computer.
1 A Mission to Manage (#ulink_eee31447-c317-5618-9ab6-800b6982f405)
The clatter of machinery was relentless. Light fell through the high windows on row after row of workers, bent to their identical tasks; but this was no factory. This was the Checking Department of J. Lyons & Co. at Cadby Hall in West London, part of the vast clerical infrastructure that underpinned the operation of Britain’s largest food empire in its mid-1930s heyday. Seated at their desks in ruler-straight rows, the clerks tapped away at their Burroughs mechanical calculators, separated from one another by partitions erected to reduce distraction. The adding machines, solid constructions of steel and varnished wood, had up to a dozen columns of numbered keys to input the figures, and a crank on the side to sum the totals. Like a cash register, they printed out a record of the calculation on a roll of paper.
The three hundred clerks in the department, most of them girls not long out of school, had but a single job to do: to add up the totals on the waitresses’ bills from the two hundred and fifty-odd high street teashops run by Lyons, and to check them against the cash takings banked by the shops. A squad of office boys kept them supplied with sets of bills, received from the teashops that morning in locked leather bags and sorted into numerical and alphabetical order by the office juniors. The senior clerks and managers, invariably male, stalked the aisles between the desks in their sombre suits, ensuring that every fashionably waved head was bent to its task; it would be their duty to follow up any discrepancies revealed as the streams of numbers gradually unrolled.
The Checking Department was one of three central offices at Lyons supervised in those pre-war days by a young manager called John Simmons. Yet as Simmons surveyed the roomful of clerks and their clacking machines, all he saw was a waste of human intelligence. Punching a Burroughs calculator could be worse drudgery even than unskilled factory work for the girls who made up most of the workforce. At least on an assembly line, he mused, you could chat to the next worker or let your mind wander while you carried out a repetitive task. Mechanised clerical work demanded total attention, but granted no intellectual satisfaction in return. Simmons began to dream of the day when ‘machines would be invented which would be capable of doing all this work automatically’. Such machines would free managers such as himself from marshalling their armies of clerks, and allow them ‘to examine the figures, to digest them, and to learn from them what they had to tell us of better ways to conduct the company’s business’.
Within little more than a decade he had made that dream a reality by persuading the board of Lyons that their company must become the first in the world to build its own electronic, digital computer. This was not, as computer historian Martin Campbell-Kelly has written, merely ‘the whim of a highly-placed executive’. While occasionally unrealistic, perhaps even grandiose in his conceptions, Simmons was not a man subject to ill-considered whims. From his perspective, building a computer was not only logical and rational but essential to the good of Lyons and the efficiency of British business. Moreover, his idealism was not out of place in the Lyons corporate culture. Far from being surprising that the seed of business computing should take root and grow in Lyons before any other company in the world, in almost every respect it provided ideal conditions.
A Family Affair
To anyone who has lived in Britain for more than thirty years the name of Lyons is instantly recognisable. The fame of J. Lyons & Co. rested principally on its chain of high street cafés known as the Lyons teashops. Before the outbreak of the Second World War there were more than two hundred and fifty of them throughout the country, with the densest concentration in London. Oxford Street alone had six, while the closely packed streets of the City of London, the financial heart of the capital, revealed another teashop at almost every turning. They spread through the suburbs from Camberwell to Wembley; from Plymouth to Newcastle, provincial cities each had their own.
At its peak the Lyons empire also included grander restaurants and hotels in London and other big cities, including the legendary Lyons Corner Houses and the Trocadero; a food manufacturing and distribution business that not only supplied the teashops and restaurants but also delivered Red and Green Label Tea, Kup Kakes and Lyons Maid ice cream to grocers’ shops the length and breadth of the country; and a catering service for large-scale events including Masonic dinners, Buckingham Palace garden parties, the Chelsea Flower Show and the Wimbledon tennis championships.
How did a firm founded on gratifying English tastes for tea and bland, comforting food become a high-tech pioneer? Behind the Lyons shopfronts with their pyramids of iced fancies lay a manufacturing and distribution empire launched with immense commercial vitality. The Lyons of the early twentieth century was a young, progressive company, eager to adopt new methods in both manufacturing and management. The company was founded just as a wave of social and technological change was beginning to transform the world of business; for the first fify years of its existence, Lyons was riding the crest of that wave.
J. Lyons & Co. had its origins in a family tobacco business established in London by Samuel Gluckstein, whose father Lehmann Meyer Gluckstein had brought him and his seven siblings from their native Prussia to settle in London in 1841. Jewish immigration to Britain from continental Europe in the mid-nineteenth century stemmed from the discriminatory practices of a number of trade and craft guilds, which effectively excluded Jewish citizens from many profitable areas of work. German and Dutch Jews settled predominantly in the narrow, crowded streets of Spitalfields in East London, and it was here that Samuel Gluckstein first lodged with his aunt Julia Joseph. Samuel and his younger brother Henry started a small tobacco business in Leman Street, Whitechapel, in 1864 with their cousin Lawrence Abrahams, employing skilled local people to make cigars and cigarettes by hand. But the partners fell out among themselves and the company had to be dissolved in 1870.
A few years after arriving in London Samuel married his cousin Hannah Joseph, and by the 1870s they had ten surviving children. In 1872 Samuel started a new, small-scale cigar-making business in Whitechapel Road, in partnership with his sons Isidore and Montague and another tobacco trader, Barnett Salmon, who had married Samuel’s daughter Helena. Almost immediately their fifty-four-year-old father’s unexpected death from diabetes left the young men with responsibility for the welfare of a large extended family.
Still shocked at their bereavement, the three remaining directors met to decide how to proceed. Mindful of the feud that had destroyed Samuel’s first company, they shook hands on an extraordinary agreement. Adopting the motto L’union fait la force (strength in union), they placed the assets of the new company, Salmon & Gluckstein, in a family fund in which each of the sons and sons-in-law of Samuel Gluckstein had an equal share. While individual family members undoubtedly had greater or lesser influence in the years to come, the philosophy of collective family ownership and collective family decision-making proved extraordinarily durable. The family continued to hold its property in common until the early 1990s, sharing all the proceeds of the business equally and owning houses and even cars communally rather than individually. Pushed to think of an exception, a surviving family member says that he supposes he might have been allowed to keep his winnings if he had a lucky bet on the horses.
From small beginnings the company grew rapidly. To increase its profitability in the highly competitive cigar-making market, the directors opened a retail tobacconist’s shop in Edgware Road shortly after the company’s foundation. By 1894 there were thirty Salmon & Gluckstein shops throughout London. Three years later there were double this number, and by the end of the century it was the world’s largest chain of tobacconists with 140 shops.
The shops sold Salmon & Gluckstein’s own products – such as ‘Raspberry Buds’ and ‘Snake Charmer’ cigarettes – as well as cigars and cigarettes from other manufacturers. With Boots the Chemists, the stationers W. H. Smith and Barratt’s Shoes, the company was among the first in Britain to recognise that selling through multiple outlets gave it the bargaining power to drive down wholesale prices, and hence to inspire consumer loyalty by passing on savings to enthusiastic customers. It sold its products at aggressively competitive prices, leading to frequent protests from small, independent tobacconists who could not command such large discounts from suppliers. Salmon & Gluckstein also made extensive use of advertising (‘The more you smoke, the more you save!’) and of gimmicks such as cigarette cards, now collectors’ items, that could be saved up and exchanged for gifts. Their business methods occasionally verged on the unscrupulous: on one occasion they were successfully sued for continuing to label their cigarettes ‘handmade’ after they had introduced automatic cigarette-rolling machines. But while their competitiveness provoked indignation among their rivals, their success could only earn grudging admiration.
By the end of the nineteenth century the tobacco business in the United Kingdom was under threat from the United States. ‘Buck’ Duke, the uncrowned king of the American tobacco industry, had used factory automation, national advertising, price-cutting and takeovers to give his American Tobacco Company a virtual monopoly on the booming cigarette market in the United States. In 1901 he bought a British company, Ogden, and seemed set to wipe out all British competition in the same way. In some respects the situation mirrored the predicament of the British computer manufacturers sixty years later, and the tobacco industry adopted the same solution. In December 1901, thirteen of the biggest British companies, led by W. D. & H. O. Wills, merged to form Imperial Tobacco Ltd. In 1902 American Tobacco and Imperial Tobacco agreed not to compete in each other’s home territories, and formed a joint company, British American Tobacco, to market all their products overseas.
Salmon & Gluckstein had held on to their independence in 1901. But a year later they sold a controlling interest in their greatest asset, the Salmon & Gluckstein chain of retail tobacconists, to Imperial Tobacco. By that time, however, tobacco had ceased to be the main business interest of the Salmon and Gluckstein family.
Montague Gluckstein, though younger than his brother Isidore, was the driving force of the business and spent much of his time on the road promoting the company’s products at trade fairs and exhibitions around the country. Entrepreneur that he was, he used the time to think about new business opportunities. He told his story to the author William H. Beable, whose Romance of Great Businesses was published in 1926: ‘Any man moving about the country can, if he cares, pick up useful information upon the needs of the public, and he can then try to plan a way to meet them.’ It was Montague’s experience at exhibitions that ‘first brought home to me the dreary and standstill methods’ of the catering establishments he was forced to patronise.
The Great Exhibition of 1851, which took place in the Crystal Palace in Hyde Park, was the forerunner of a series of similar events mounted by major cities in the years that followed. They combined popular entertainment with the opportunity for businesses at home and overseas to promote their wares. They were the Millennium Domes of their day: the difference being only that they were hugely popular and successful. The Manchester Exhibition of 1887, for example, attracted five million visitors. But as he queued for an indifferent and expensive cup of tea, or ventured in search of a pie or a sausage in a neighbouring pub, the fastidious Montague Gluckstein reflected that as far as refreshments were concerned the exhibitions catered very poorly for their visitors, especially women and families. ‘The ordinary man visiting a strange town and wanting a meal had a choice between a public-house, where he would get cold meat, pickles and beer, or a coffee-house, with its dirty little horse-box-like compartments, untidy shirt-sleeved waiters, grimy tablecloths, bad food and worse smells,’ wrote Thomas Charles Bridges, describing Montague Gluckstein’s experience in his 1928 book Kings of Commerce.
Surely, thought Gluckstein, there was money to be made from offering people at least a good cup of tea when they were away from home? When, in the mid-1880s, he proposed to his brother and brother-in-law that they diversify into catering, they were slow to agree. They were concerned about the risks involved in a new area of business, one which, as Montague Gluckstein himself put it, was seen as ‘hardly the thing for people engaged in the aristocratic business of cigar manufacturing’. Eventually they concurred, as long as the catering venture was screened behind a different trading name.
The compromise was to find a partner to run the new venture who was almost family, but not quite. Joseph Lyons, an entrepreneur and salesman, was a distant relative of Rose Cohen, the wife of Isidore Gluckstein. Born in Southwark in 1847, Joseph Nathaniel Lyons had begun his working life as an optician’s apprentice, but his quick imagination and gift for selling had led him into a colourful assortment of other occupations. He invented a device called a chromatic stereoscope – a combination of telescope, microscope, magnifying glass and binoculars – and sold it for 1s 6d (7½p). He wrote detective stories, music hall sketches and songs, and was a moderately successful watercolourist. He was married to Psyche Cohen, the daughter of an entertainer who later ran the Pavilion Theatre in Whitechapel; his marriage certificate gave his occupation as ‘artist’.
Once the brothers had agreed that Lyons was their man, Montague Gluckstein went to meet him. At the time he was running a stall, probably selling his own artistic or technological creations, at the 1886 exhibition in Liverpool. ‘I went there for a night, that stall was closed down, and the terms of our arrangement I put on an ordinary sheet of notepaper,’ recalled Gluckstein. The deal they struck was that they would go into the catering business together as long as Joe Lyons could win the catering contract for a large exhibition taking place in Newcastle in 1887 to mark the Golden Jubilee of Queen Victoria.
Joe Lyons had no previous catering experience, and none of managing a business larger than a market stall. But he was cheerful, ebullient and persuasive, and he had the resources of a highly respected firm behind him. He won the contract, and he and his partners discovered, just as Gluckstein had supposed, that there was a vast, untapped market for the combination of style and good value that they felt they could offer. There was nothing tentative about the first venture into catering by J. Lyons & Co., the name adopted for the new company in 1887. Customers in the tea pavilion at the Newcastle exhibition were entertained by a Hungarian string band, they could choose from a varied menu and enjoy attentive service, and of course, they could wash their meals down with a pot of excellent tea for threepence (1¼p). ‘Out of that humble but very important trio, tea, bread and butter of the best kind sold at a reasonable price,’ reflected Gluckstein later, ‘the foundation was laid of what was afterwards to be the largest catering business in the world.’
Catering on a huge scale for exhibitions and similar temporary events was to remain an important part of the company’s activities for the rest of its existence, but the Lyons directors did not stop there. In 1891 Joseph Lyons raised the capital to mount a spectacular entertainment called ‘Venice in London’, complete with Italian gondolas on water-filled canals, at the Olympia exhibition hall in West London. The show ran for more than a year, and others followed. At the same time J. Lyons & Co. won the contract to provide all the catering at Olympia, a contract they held until 1978. The association with Olympia was a factor in uprooting the family firm from its East London origins. First, Montague Gluckstein moved from his flat above a tobacconist’s to a house in Kensington, next to Olympia. Then in 1894, the year J. Lyons & Co. was formally registered as a limited company, it moved its headquarters from Whitechapel to Cadby Hall, a former piano showroom and factory in Hammersmith Road, near to Olympia. Following the earlier model of the tobacco business, the company began to manufacture the products needed to supply its catering enterprises, beginning with bread and rolls from the Cadby Hall bakery. Within twenty-five years the site held a complex of red-brick factory buildings, erected fortress-like around a central yard; thousands of workers were employed on the site.
A retail chain to match demand to supply seemed an obvious next step. In the last years of the nineteenth century, ever-increasing numbers of clerical workers were commuting into central London from the suburbs to work, and they needed somewhere to buy their lunch. There were pubs, sausage and pie shops and coffee houses, and the chain of ABC restaurants run by the Aerated Bread Company. But these places, often known as ‘slap-bangs’ for the style of service they offered, had a somewhat sleazy reputation, and none was designed to appeal to the increasingly female workforce. The Lyons directors saw a gap in the market, and resolved to open a chain of establishments offering ‘good temperance fare at economic prices in attractive surroundings and with polite and dignified service’.
With the opening of the first Lyons teashop at 213 Piccadilly in 1894, Joseph Lyons and his partners set standards of service to customers and sumptuousness of surroundings that astonished and delighted their clientele. Between the drab shopfronts of late Victorian London, the name of J. Lyons & Co. shone out in hand-carved art nouveau lettering, ornamented with floral swags and finished in real gold leaf against a white background. Inside there were gas chandeliers, red damask wallcoverings, elegant chairs and marble-topped tables, silver-plated teapots and fine china. Highly trained waitresses, originally known by the name ‘Gladys’ but later christened ‘Nippies’ (a shrewd PR move) for their speedy efficiency, eagerly waited to take the orders in made-to-measure uniforms with starched white aprons. The tea, of course, was delicious, and only twopence (1p) a cup. It was an instant success, with queues of customers patiently waiting outside on benches thoughtfully provided by the management. Within a year the capacity of the teashop had to be increased to cater for 400 rather than 200 customers at a time.
The model was repeated over and over again. Two more teashops, in Queen Victoria Street and Chancery Lane, opened in 1894, another dozen the following year; there were 37 by the end of the century and 200 by 1925 on prime sites in London alone. The provincial expansion began in 1909, when Lyons bought the Ceylon Café chain; within a few years cafés in Bradford, Manchester, Sheffield, Leeds and Liverpool had been converted into Lyons teashops.
The identical white-and-gold fascias became as much a part of London life as double-decker buses or underground trains. At Montague Gluckstein’s insistence, the prices were the same whether a teashop was located among the department stores of the West End or the tailors’ shops of the East End – another innovation for the time. Whether or not they drove the dramatic social changes that followed the First World War, they certainly reflected them. Writing in the Daily Mail in October 1921, and quoted by Peter Bird in his history of the company, Lady Angela Forbes observed: ‘For the business girl, not only in the city but in every part of London, the nearest teashop is not far away … They share a table with men as naturally as they take a seat – or a strap – in tram and tube … From every point of view, and most emphatically from a woman’s, London has changed for the better during the past 25 years, in that metamorphosis the teashops have played a meritorious part.’
Working on an even grander scale, the company simultaneously launched a number of larger and more up-market establishments, notably the Trocadero at Piccadilly Circus (1896), a palatial restaurant in the heart of London’s theatre district, and the Lyons Corner Houses. The first Corner House opened in Coventry Street in London’s West End in 1909, and was capable of serving 5,000 people at a time. There were restaurants catering to different tastes and budgets on the four upper floors, each with its own live band. (By the mid-1920s, Lyons had a budget of £150,000 a year for music alone – over £5 million in today’s terms.) There was a food hall on the ground floor, selling tea, coffee and high-quality cakes and biscuits. You could even get your hair done, book theatre tickets or avail yourself of that novel instrument, the telephone.
Two more Corner Houses had opened in London by the mid-1930s, in Oxford Street and the Strand, as well as Maison Lyons at Marble Arch. They quickly achieved landmark status. ‘In these places,’ noted Montague Gluckstein with satisfaction, ‘people made the astonishing discovery that beauty and luxury in eating were not the prerogative solely of the very rich, and the man of modest income and his wife could realise something of the spirit of refinement and thoughtful service which actuates the very best and most exclusive restaurants of this and other European countries.’
By the end of the 1930s Lyons had a total workforce of well over 30,000, making it one of the largest businesses in the country. Although its teashops and restaurants were the most visible part of the operation, food manufacturing occupied around two-thirds of its staff. As the number of outlets to be supplied grew, so did the Cadby Hall site and the range of products that Lyons made. After bread came tea, cakes, ice cream, confectionery and eventually ready frozen meals. The food production areas were highly mechanised: the Lyons continuous Swiss roll plant, which took in raw ingredients at one end and delivered filled, rolled, wrapped and packaged cakes at the other, was only one of a number of specialist bakeries working day and night. In addition to its own restaurants and teashops, the company supplied almost every grocer’s in the land with Red and Green Label Tea packed by the quarter pound, foil-wrapped Kup Kakes and Lyons Maid ice cream. In London it also delivered to private customers, its blue, white and gold liveried vans even drawing up at Buckingham Palace.
In its unrelenting quest for quality, the company gradually brought many of the services it needed to run the business under its own control. The strong tradition of family ownership translated into a philosophy of self-reliance that pervaded every aspect of the company’s operations. It developed its own printing and packaging, laundry and dressmaking, and transport and vehicle maintenance operations, and bought a tea plantation in Nyasaland (now Malawi). The attention to detail that had gone into the design of the teashops remained a feature of all these activities. The new uniforms for the Nippies, designed in 1925, which were still made to measure for each waitress, followed fashion by featuring a shorter skirt, and were trimmed with no fewer than 30 pairs of pearl buttons. The tea leaves that ended up in a packet of Lyons Red Label were carefully blended from stocks either bought at auction in Mincing Lane, the centre of London’s tea trade, or imported direct from producers. Soft drinks for the restaurants were precisely graded, those for the Corner Houses containing little preservative and having a three-day shelf-life, while those for the teashops contained more preservative and could be kept for six weeks.
Despite its size, Lyons remained very much a family business. After Joe Lyons’s death in 1917 Montague Gluckstein succeeded him as chairman, and thereafter the board consisted almost exclusively of Salmons and Glucksteins, fathers and sons, uncles and nephews. They tended to have large families, and there were many marriages between cousins so that the network of blood relationships was very close. The exception was the company secretary, George William Booth, who joined the company in 1891 and caused consternation in the early 1950s when he suggested he might retire – at the age of over eighty. ‘He wasn’t family,’ says Anthony Salmon, former Lyons board member and grandson of Montague Gluckstein, ‘but the family would never move without consulting him. He acted as a public conscience.’
It was Booth who recognised that concern for quality and value, and a fine sense of what the customer wanted, were not always enough to ensure profitability. The problem Lyons faced was simple to express, much harder to solve. A typical teashop customer bought no more than a bun and a cup of tea, costing a few pence. The profit to the company on that transaction might be as little as a farthing (barely a tenth of a penny in today’s decimal currency, and even allowing for inflation worth only about 4p). Although the scale of the operation – 150 million meals sold per year – meant that overall turnover was high, the modest profit margin on each purchase could easily be wiped out if the clerical work involved in recording and analysing all those transactions was inefficient. And since almost everything Lyons sold had a limited shelf-life, it was essential to have an ordering and distribution system that accurately matched supply to demand.
The same applied to the retail business: Lyons supplied goods such as tea and cakes directly to small shops, with no wholesaler involved, dealing with 30,000–40,000 orders worth a few pounds each in a week. Meanwhile, the efforts of the armies of clerks culminated in little more than simple profit and loss accounts – the concept of management accounting was then still in its infancy. That the business remained comfortably in profit during the 1920s and 1930s owed more to Montague Gluckstein’s instinct for what would sell than to any detailed analysis of the company’s performance.
Booth saw that success in the long term would depend on a more systematic approach. In adopting this view he showed himself to be in tune with the most advanced ideas on scientific management that were then beginning to circulate on both sides of the Atlantic.
‘One Best Way’
The term ‘scientific management’ originated with Frederick Winslow Taylor (1856–1915), a former Pennsylvanian steelworker turned engineering consultant. Taylor believed that losses to industry through inefficiency could be remedied through the application of systematic management, and that ‘the best management is a true science, relying upon clearly defined laws, rules and principles’. He proposed that rather than leaving it up to skilled workers to plan and execute jobs in manufacturing, managers should analyse every task to reduce it to the minimum number of essential movements – the ‘one best way’, as he termed it, of completing the task. They should then allocate tasks to specialised workers and give them appropriate incentives to perform them at a rate that maximised their efficiency.
Taylor was widely attacked by those who saw his methods as inhumane, and he died a disappointed man. But during the First World War, when labour was short and productivity at a premium, a new generation of disciples picked up and developed his ideas. Factories were invaded by eager young men with clipboards and stopwatches, carrying out the ‘time and motion’ studies that were an essential feature of Taylorism.
In the years following the war, the watchword of efficiency began to be heard in offices as well as factories. The business office as we know it today was itself a creation of the late nineteenth century. When most businesses were still small, family-run affairs, all they needed was a few clerks in the ‘counting house’ to keep the books and write letters. The level of education required for a clerk was not high by today’s standards – basic arithmetic and elegant handwriting were the main requirements – but as long as much of the population was illiterate, clerical work was a relatively high-status occupation. By the end of the nineteenth century, industrialisation had massively increased the size of manufacturing businesses, and vast new enterprises such as the railway companies had been created. There was an urgent need for staff to look after accounts, sales, marketing, personnel and all the other ‘non-productive’ functions of these businesses – functions that today seem to dominate the world of work, but which a century ago came a distant second to the business of making things. At the same time service industries such as banks and insurance companies grew to meet the needs of the large manufacturers, and public administration was also an expanding field. By the early years of the twentieth century governments were increasingly requiring companies to produce public accounts, and eventually to undergo external audits; the leather-bound ledgers of the past were no longer sufficient, and whole offices were dedicated to compiling accounts to satisfy shareholders and tax inspectors.
At the same time, the introduction of compulsory elementary education provided a ready pool of young people, both men and women, looking for an alternative to the skilled or unskilled manual work that had been the only choice for their parents. The numbers speak for themselves: between 1851 and 1901 the number of clerks in the labour force in the United Kingdom rose from around 70,000 to over 2 million. The proportion of these who were female rose from 0.1 per cent to 13.4 per cent in the same period; by 1981 it had reached 74.4 per cent.
The social changes went hand in hand with technological change, led all along by the United States. In that fast-growing country labour was scarce, and there was a great enthusiasm for machines that could increase productivity. The typewriter, patented in America in 1868, was taken up and promoted by Remington, the gunsmiths, who had found demand for their products falling after the end of the Civil War. In 1878 they brought out the Remington 2 typewriter, a design classic that remained in use for decades. Sales leapt from 146 in 1879 to 65,000 in 1890. The women who were entering the clerical labour force in increasing numbers proved to be particularly adept at using the new machine and so established their position in the hitherto male world of business, albeit at a low-paid level. Together with various forms of copying machine, the typewriter made it quicker and easier to communicate and to keep records of communications. Meanwhile, devices that we would hardly think of as ‘inventions’ today, such as index cards and vertical filing cabinets, revolutionised record-keeping. Adding and calculating machines, one popular version of which was patented by William Seward Burroughs in 1883, relieved clerks of the necessity to be accurate calculators themselves.
The office equipment industry boomed, led by a sales force that persuaded managers that simply by buying their machines they were buying greater efficiency. A dreadful poem published in The Clerk in 1937 epitomised this view:
Early to bed and early to rise
Is really very little good
Unless you mechanise.
But others cautioned against buying expensive machines without first analysing the functions of the office as a whole. Chief among these, and the author of several textbooks on office management, was William Henry Leffingwell, a former clerk in a Chicago photographic company, who had risen to become a ‘consulting management engineer’ – one of the first forerunners of the management consultants of today. He wrote: ‘The ingenuity of inventors and the persistence of machinery salesmen have brought about a condition in which the present-day office manager is not asking himself whether or not his office needs a machine of some kind, but what machine he shall choose from among the multitude offered.’
Leffingwell saw the office as fertile ground in which to sow the gospel according to Taylor. He published frequently in the monthly magazine System (founded in 1901, the forerunner of Business Week), and brought out the first of several books, Scientific Office Management, in 1917. His verbose texts covered in minute detail the arrangement of desks to optimise work flow, the distance walked by clerks to reach the water fountain, the design of forms, and even the ‘one best way’ to open a letter. They remained influential for decades: the third edition of his Textbook of Office Management appeared in 1950, three years after his death. Business historians have not been slow to point out the irony that scientific management itself increased the bureaucratic workload through generating forms to be filled, activities to be monitored, and reports to be analysed and filed.
In 1919 Leffingwell founded the National Office Managers’ Association, creating a forum for research, debate and discussion. Its regular publications added to the prolific literature on the subject. Meanwhile, in the United Kingdom, the Office Machinery Users’ Association, founded in 1915, picked up the importance of giving system precedence over technology and renamed itself the Office Management Association.
Efficiency had long been a priority at Lyons, and the factories were organised very much according to the principles of Taylorism. Each was laid out to handle the particular kind of cake, pie, bun, loaf or bread roll in which it specialised. Under the direction of a Planning Office, every operation was time-and-motion studied to arrive at a fair, efficient time. These times were used both to calculate the number of staff required, and to compute the standard cost of the labour entailed in making the product, which in turn partly determined its selling price. The Lyons company secretary George Booth was interested in extending the same scientific approach to the clerical work of the company. He decided that the best way to find those with the skills to introduce such methods was to venture into graduate recruitment. None of the family board members had been to university, all following their fathers into the business at the earliest opportunity. The usual career path was a spell in the Trocadero kitchens, followed almost immediately by promotion to the management of one or other of the company’s businesses – tea, confectionery or hotels, for example. While some prided themselves on their ability to add up a column of figures rapidly and accurately, they had no experience of mathematical analysis or scientific enquiry. Below general management level in Lyons the usual approach was to recruit school leavers and train them for specific tasks. Academic qualifications had hitherto seemed irrelevant.
In 1923 Booth persuaded the board to add some intellectual rigour to the company’s management by recruiting some of the brightest young minds in the country. One of the five young men who constituted this new class of management trainee was John Simmons, who had just received a first-class degree in mathematics from Cambridge. It could have been a risky experiment: brilliant mathematicians do not always make good managers (some have been notoriously incapable of tying their shoelaces). Nonetheless, either by luck or judgement, in John Simmons Booth had found exactly the person he needed.
