Lights dim. Enter, stage left: bungling Islington workers

"Islington used to be loony 15 years ago, but it has come through that," said Steve Hitchins, the council leader. "Now we're just totally incompetent."

"Islington used to be loony 15 years ago, but it has come through that," said Steve Hitchins, the council leader. "Now we're just totally incompetent."

What do you do with incompetence? Mr Hitchins, a Liberal Democrat, thinks he has the answer. The north London borough, once notorious for flying the red flag over the town hall and giving grants to black lesbian child-minders, has commissioned a play called A Change of Mind and hired Sadler's Wells theatre to put it on for 7,500 staff next month.

"I haven't written it yet," said the playwright, Michael Woodwood, "but the central metaphor will be the human body."

Mr Woodwood has spent several weeks interviewing council staff at all levels, including Mr Hitchins, who became leader of Islington Council when the Liberal Democrats ousted Labour in January. Their comments will be incorporated in the production, which is aimed at making the workers feel valued and imbuing them with a sense of purpose. "Instead of another consultant's report, we are doing it as a play," said Andy Garnett, whose company specialises in using theatre techniques for staff development.

Mr Hitchins says he is "quite excited" by the idea, and doesn't care if it seems weird. "Years of poor management has meant poor morale among staff. It is very difficult to change the culture of big organisations, so we are prepared to take a few risks."

Nor is Islington alone. The use of theatre skills as a management tool has come a long way since John Cleese made a fortune from training videos. Dozens of theatre companies and hundreds of actors are making a living from corporate work; even South Yorkshire Police is looking at commissioning a play as part of a community project on topics such as racism and child abuse.

Another play by Mr Woodward, Unlocking the Pyramid, was developed for Redbridge Council in north-east London six years ago and has since been performed by his company, Vital Stages, for 5,000 employees of other councils and public bodies, as well as private sector companies. The two-hour play, with a cast of six, has been credited with bringing out issues such as sexual harassment, workplace bullying and managers' inability to communicate with staff.

The protagonist of Unlocking the Pyramid is Imogen Farmer, a new recruit in a company, who is full of ideas but finds that nobody wants to listen to them. The climax is a showdown between Imogen and the chairman, Kinross, in which it is clear one of them will have to quit. Workshops after the show, in which workers develop scenes and change actors' dialogue, have produced dramatic moments of their own. "A senior civil servant stood up and said he recognised some of his own behaviour on stage, and would try to change it," said Mr Woodwood.

On another occasion, women in the audience supplied an actor with lines reflecting the sexual harassment they had experienced, at which one man said: "You're talking about me." "Yes, we are," a woman replied. "The actors had to duck for cover," said the playwright.

Mr Garnett and Vital Stages avoid audience participation, believing it frightens some people off, but it is central to the approach of another company in the field, Brighton-based Iago Productions. "We make the audience the stars," said its director, James Haines.

He uses games and role-playing designed to get employees to "think about their roles in the company, and their company's objectives", often using the formats of game shows or movies. "Sometimes we hand them props and give them half an hour to make a commercial for the company. Wigs are the best tool - put the managing director in a pink wig and it really breaks the ice. But the day ends with a full discussion. People make notes and hopefully go away having learned things for themselves."

Like his fellow artists, Mr Haines believed the "catharsis" of theatre helped to bring out gut feelings. "People hate to criticise their colleagues openly, but this helps them to explore issues in a light-hearted and unthreatening way," he said. "It can clarify a company's problems."

Not every actor was comfortable without a script, he added. "They are used to performing in a darkened room in front of people who keep quiet. Handling audience participation is a skill many of them don't have."

Many companies and their bosses also shy away from the idea of acting the fool, but Jeremy Sturt, a co-founder of Lively Arts, which has worked with the likes of British Airways, Midland Bank, Dell Computer and Thomson Holidays, believes that the use of theatre by business will become more common.

"They are looking for creativity, and that's our business," said Mr Sturt. So, far from being loony, Islington is following a well-established trend.