The Blair-Brown Dysfunction
What happens when your most talented person builds a rival operation inside your organisation. And you let them.
Tony Blair and Gordon Brown made a deal in 1994. Blair would run for leader. Brown would step aside. In return, Brown got unprecedented control over economic and domestic policy. A hint that Blair wouldn't "go on too long." And the most powerful Chancellor's office in modern British history.
They didn't write it down. Both men left with different versions of what had been agreed. One thought he'd been promised the top job eventually. The other always denied committing to a timetable.
That ambiguity broke the government. The degree to which not many people really understand. It created a decade-long civil war that paralysed the civil service, consumed the Prime Minister's bandwidth, distorted the decision to go to war in Iraq, and wasted the largest parliamentary majority in modern history. It was completely dysfunctional and seriously hampered what the New Labour project could have achieved.
If you run a business, you've probably seen a version of this. Maybe not at this scale. But the dynamics are exactly the same.
Two governments, one organisation
Brown's title was Chancellor. The equivalent of a CFO. But he didn't operate like one.
The Treasury under Brown controlled every department's budget through spending reviews and performance targets. Every department head had to sit before Brown's committee and justify their existence. He had over 600 targets tied to funding at one point. He controlled not just how much money departments got, but what they did with it. He used budget control to set policy direction, block strategic initiatives he disagreed with, and run a parallel management structure. He had the title of CFO but operated as a rival CEO.
Blair ran the opposite way. Informal meetings in his office. No minutes. Cabinet meetings lasting 30 to 45 minutes. Key decisions made on the sofa with three or four trusted advisers.
Early on, Andrew Rawnsley described it as "the chairman and the chief executive." By the second term, it was closer to two CEOs of competing divisions forced to share a brand.
The management lesson: You've seen a version of this. A member of the exec team who gradually expands their remit until they're effectively running a shadow operation. Brown is the extreme version. And it happened because the agreement/plan was never clear enough to prevent it. If you don't define the boundaries, if your plan is not clear and people aren’t aligned, people will interpret it how they want.
The team caught in the middle
Think about what this does to the people underneath.
Senior civil servants had to work out whose side to take on every decision. Back Blair's position and Brown's people might kill your career. Back Brown and Blair's team would freeze you out. The safest option? Do nothing. Wait for it to blow over.
Andrew Rawnsley described it plainly. "Civil servants had to think: whose side do I take? The safest thing is to do nothing. Ministers were the same."
The briefing wars made it worse. Both camps had press operations that briefed against the other side to journalists. Brown's team kept files of damaging stories about ministers. Blair's communications chief ran counter-operations. One of Brown's press officers effectively announced government policy on the Euro from a pub opposite Downing Street, with a pint in one hand and a phone in the other, before Blair even knew about it.
Think about that. Government policy on one of the biggest economic questions of the era, decided by a spin doctor in a pub. Without the PM knowing.
The management lesson: This is the political equivalent of people talking outside of meetings. Undermining decisions that were already made. Building alliances behind closed doors. Running a shadow operation that competes with the official one. If you've worked anywhere with internal politics, you've seen a version of this. The difference is that in government, the stakes included a war.
The star performer problem
Here's where it gets uncomfortable for managers.
Blair knew Brown was a problem. He called him "mad, bad, dangerous, and beyond redemption" in private. His inner circle spent years dealing with what they called "the flaw" in Brown's temperament. Campbell's diaries show daily examples of Brown undermining, plotting, and being openly disrespectful.
But Blair also called Brown "head and shoulders above the others." He ran through possible replacements and always came to the same conclusion. Nobody else was good enough. Brown had delivered Bank of England independence. He'd managed the longest sustained economic growth in modern history. He had massive support in the party and powerful media allies.
So Blair kept him. Year after year. Hoping it would get better. Managing around the problem rather than confronting it.
Sound familiar?
The management lesson: "But they get results" is the most expensive sentence in management. And the tragedy of Blair-Brown is that by the time Blair fully understood the cost, it was too late. The lack of clarity in the original deal had given Brown the institutional power, the political alliances, and the leverage to make himself unsackable. Blair had created something he could no longer control. The ambiguity in 1994 had become a monster by 2004. Every business owner knows a version of this. The sales director who hits their numbers but the rest of the team can't stand them. The co-founder who controls a key part of the operation and uses it as leverage. You keep them because you're scared of what happens if they leave. And every month you don't act, their power grows and your option shrink.
The decisions that never got challenged
The dysfunction didn't just waste energy. It broke the organisation's ability to make good decisions.
Welfare reform is the clearest example and one of the biggest tragedies. Blair appointed Frank Field with a brief to "think the unthinkable." Field came up with ideas that needed transitional spending. But Brown had already decided that tax credits would be his welfare programme and had earmarked the money. Field resigned within a year and publicly blamed Brown. A PM-backed reform killed by a Chancellor who had a different plan and the institutional power to enforce it. They weren't just misaligned on tactics. They were misaligned ideologically and culturally. And nobody had the authority or the safety to resolve it.
Then there's Iraq. The biggest decision of the era. Under their division of labour, foreign policy was Blair's domain. Brown later admitted he was already fighting Blair on three other fronts and was "anxious to avoid a fourth area of dispute." He sometimes sent his private secretary to Iraq meetings in his place.Let that land for a second. The second most powerful person in government opted out of the most consequential decision of the era because he was too busy fighting his own boss on everything else.
Cabinet barely discussed it. Ministers got oral summaries instead of papers. The Butler Review concluded that the "informality and circumscribed character of the Government's procedures" reduced the scope for proper collective judgment. Neither Blair's style, informal sofa government with a tiny inner circle, nor Brown's, commanding and controlling with no interest in views outside his own operation, created space for genuine challenge. Lord Turnbull, who served as top civil servant to both men, described Brown's approach as having a "Stalinist ruthlessness" about it. Brown didn't want alternative views. Blair didn't create the structures to surface them.
The management lesson: When there's no environment where people can challenge ideas, raise problems, and give honest feedback to leadership, the organisation's biggest decisions get made in the smallest rooms. By the fewest people. With the least scrutiny. And by the time you find out the decision was wrong, everyone's already committed.
What managers can take from this
You're not running a government. But the dynamics scale down perfectly well.
Have clarity of roles from the start. Write it down. All of it. Who does what, who decides what, where the lines are. The Granita deal failed because both men left with different versions of what was agreed. The honest conversation feels awkward now. The ambiguity costs you for years. And by the time you realise the damage, the person on the other side of that unclear agreement has built enough power to make it very difficult to fix.
Act on culture problems before it's too late. Blair kept Brown for a decade because he was brilliant and the alternatives seemed worse. Every year he stayed, the cost to everyone else compounded. The people leaving. The paralysis. The energy everyone spent managing around one person. That's the real cost, and you don't see it until it's too late. "But they get results" is a trap. The results are never worth the damage to everyone else. And the longer you wait, the fewer options you have.
Your team is already adjusting. When leadership is visibly divided, people stop taking initiative. They hedge. They wait. They play politics instead of doing the work. If you and your leadership team aren't aligned, your people already know. They're not waiting for you to fix it. They're working around it.
Build a no-fear culture. Neither Blair nor Brown created an environment where people could push back. Blair made decisions without collective discussion. Brown shut down anyone who challenged his control. If you're making important decisions without genuine challenge from people who'll tell you what you don't want to hear, you're not being decisive. You're being reckless. The best teams have a culture where people can challenge, raise problems, and give feedback without fear. Iraq happened partly because that culture didn't exist.
Two genuinely talented people who could have achieved extraordinary things together. They had the mandate, the money, and the political capital. What they didn't have was clarity, honest communication, or a culture where problems got solved instead of weaponised.
That's not a political problem. That's a management problem. And it's one you can avoid.
Have a good long weekend,
Arran
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Arran Russell
Founder, Set The Tone
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