Outlook: WH Smith opts for the Handover solution

Having scoured the world for a new chief executive, WH Smith has finally settled on someone who's been sitting there in the backyard all along. The City was as underwhelmed by news of Richard Handover's appointment as everyone else. It may seem a bit of a cheap shot to describe this company man of 32 years service as just a glorified paper boy, but that is where Mr Handover has earned his reputation - on the newspaper wholesale and distribution side of the group.

To be fair, he seems to have made a pretty good fist out of this unglamorous enterprise in the two years he's been doing the job. It is one of the few parts of the group on an improving trend right now. Nor is Mr Handover devoid of retail experience. Before his present incarnation he was managing director of WH Smith's Our Price offshoot, where he was instrumental in the merger with Virgin Retail. So it would be wrong to write him off.

All the same, judging by what he was saying yesterday he doesn't seem to have much of a plan for reshaping the main retail chain or for addressing its underlying weaknesses - chief of which is that nobody knows what sort of a store WH Smith is meant to be any longer. If it is a newsagent, it is under vicious attack from the supermarkets; if a book or record store, there are others that do it better; and as a gift shop it is scarcely worth bothering with. No amount of the "basic retail discipline" Mr Handover promises to inject into the chain is going to solve this fundamental difficulty with the WH Smith formula. It's just out of date. Nor does the company's explanation of why it took so long to settle on Mr Handover sound entirely plausible.

According to Jeremy Hardie, chairman, it was because the board first had to satisfy itself there was no external candidate better suited to the role. The argument can equally well be stated the other way round, however. If Mr Handover was so self evidently right for the job, why didn't the board go for him immediately? Whatever he does, Mr Handover will find it hard to bury the suspicion that he was always second or third choice.

Whatever else may be said about him, at least Mr Handover has got one thing in his favour. With 32 year's service behind him, he's plainly not a quitter. The same could not be said of his predecessor, Bill Cockburn, who took just eighteen months to decide that running a business in the real world of harsh commercial competition was not for him. He's now back at British Telecom, which like his previous company, the Post Office, is essentially a monopoly. There's little doubt about who's got the tougher assignment.

Sifting through my customary sackful of leaked Whitehall memos yesterday, I came across a copy of a draft letter from Tony Blair to Bill Clinton musing on the subject of globalisation. Though this letter has not yet been sent, I believe it only right and proper in the interests of open government to reproduce it here.

"Dear Bill, I don't know whether you noticed, but apparently Coopers & Lybrand and Price Waterhouse are to merge to create the world's largest accountancy practice. I have to say that I am wholeheartedly behind this sort of corporate response to the progressive integration of the world economy and I think we should both be doing our bit to ensure the competition authorities don't stamp on it.

Funnily enough, I've rather been thinking along the same lines myself - how do we as governments respond to the increasingly global needs of our clients (ha,ha, only kidding. I mean the people of our two countries, of course). I make the following suggestion, only half in jest. It's all part of my vision to create a global people services powerhouse, which I know you share.

Why don't we merge our two administrations? The new organisation would be in a position to provide unprecedented service to global, national and local communities worldwide. Together we could offer a comprehensive range of business assurance, business advisor, tax, management, IT and human resource consulting services and a commitment to helping people wherever they are formulate and implement strategic solutions which drive growth and improve business performance.

Last time we met I could not help but be struck by the compatibility of our cultures and shared vision. We seem both to be committed to offering our electorates world-class capabilities to help them solve increasingly complex business problems they encounter as they expand and globalise.

Combining these two great organisations will create a tremendously dynamic professional environment that will provide our clients with the support they need to succeed in the global marketplace and will give us an unparalleled ability to develop and execute innovative and strategic solutions. It makes sense for our clients and it makes sense for our people. I know there are a few little local difficulties involved. For a start there's what to do with our Queen. Rest assured that I have that one in hand. Then there's Brussels. That wretched man Karel Van Miert, the EC competition commissioner, will block us given the chance. But none of these things are beyond the wit of a clever investment bank like Goldman Sachs. How about it?

Yours, Tony (with apologies to the press release announcing the merger of Coopers &Lybrand and Price Waterhouse).

My colleague Diane Coyle, who is in Hong Kong for the International Monetary Fund meeting, tells me that the World Bank Staff Association has issued a circular to delegates whingeing on about low morale. They would have done well to have kept their grievances (which include such gems as being forced to downgrade from first to club class travel) to themselves. If anything, James Wolfensohn, head of the bank, deserves warm applause for undermining the morale of his comfortable, well-heeled bureaucrats. This is the organisation that used to be known as the Glistening Bank, thanks to the lavish perks staff enjoyed as they doled out aid to some of the world's poorest countries - together with some of its richest criminals in their guise as heads of state.

Mr Wolfensohn is only the latest in a line of presidents to try to reform this mammoth bureaucracy. If he has really managed to score such a big hit on staff morale, he might turn out to be the first to actually accomplish anything.