Month: April 2016

Plotting a safe regulatory course

Google has been in the news this week with the EU issuing antitrust charges over alleged abuse of its dominant position with its Android operating system. Luckily it had Microsoft’s earlier tussle with Brussels on similar charges to draw on.

It also has its own superb team to handle such matters. They’ll be busy in the next twelve weeks.

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How close to the regulatory wind can Google sail?

The online giant knows ignoring regulation destroys businesses. If your CEO relegates its management to a remote part of the company, s/he’s going to be moved on pretty sharpish.

I have been a regulatory poacher and gamekeeper. Fishing for a break from competition authorities to reward enterprise when at places like Sky and Millicom, and forcing through changes to help markets work more fairly when working at Ofcom.

It requires a lot of intellectual heavy lifting. I recall one very senior official telling me that part of the regulator’s job was to know more about the companies overseen than the companies knew themselves. That’s why his organisation was stuffed full of PhDs and MBAs (who often then got poached to the poachers’ side) who dug deep and thought hard.

Back inside the company, smart lawyers and economists ran models demonstrating the fairness of its commercial stance and the iniquity of our competitors’.  I’ll never forget the CEO’s 7am call to me from an airborne plane to say we’d been let off, just, by the competition regulator after an inquiry. There was only a cosmetic wrist slap and some grandstanding to endure.

We were a basis point away from further action – showing just how well-tuned the business was. My CEO had made sure that the regulatory team were fully across all the firm’s activities and embedded knowledge and practices there to avoid fines, disposals and public opprobrium. So the company maximised profits by sailing as close to the regulatory wind as allowable without capsizing and drowning it in ruinous anti-trust penalties.

But such scrupulous management is not enough by itself. Demonstrating strict adherence to the rules to investigating authorities is indispensable. But too narrow a legalistic approach can weaken the case. Compliance needs to be matched by smart communications too.

One barbed remark, from a super-smart senior colleague managing such matters at one company, highlighted this for me as a communicator by asking “What value are you adding to the company on this exactly?”.

I was quite offended. But, on reflection, it was fair. He had a very dim view of the press and media. He had supreme confidence in his own intellectual ability and a sneering attitude to his peers at the regulator. He believed only his team’s objective evidence would be admissable and would win the day with them.

I did the autopilot speech about broader strategic reputation management also subjectively influencing such matters. Such soft talk met with derision.

So I took him by a reluctant hand to do some tactical briefings for broadsheet and business media whilst gently turning up the volume on our innovation and others’ competition. It was the classic convert opponent-to-neutral and neutral-to-support operation. The fruits of such labour duly appeared: less hostility and even some signs of support.

That, with many other activities, made the job of the regulator easier when adjudicating our case. They’re not purely po-faced pointy-headed institutions. Even they have a persona and care how they are perceived. The “public” ground had been prepared sufficiently well to enable it to make a reasoned judgement without being accused of bias or incompetence.

Of course we protested at its suggestion of any anti-competitive behaviour just as our rivals complained too. Result: happy regulator, not pleasing anyone and thereby being seen as fair and impartial.

That’s the course Google will be plotting. Stand by for some clever comms from them in the next few weeks as it deploys its considerable firepower. Anchors away!

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Cretans not Cretins

Just had a couple of days in Crete. Not been to the Greek island since the 80s and, surprisingly, not much has changed at the stunning Venetian harbour in Chania or the inspiring 1900 BC Minoan palace at Knossos.

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Your author at Knossos, Crete this week

It was a magical place to attempt to think profound thoughts as our guide reacquainted us with the ancient myths beneath the spring sunshine.

But all the time I came back to thinking about Brexit and Grexit, particularly when reminded of the mythical god Europa, the revered mum of Crete’s King Minos. She was not a UEFA creation but born in…. modern-day Lebanon. Now there’s a shock to those Europhiles who celebrate her depiction on € banknotes and as a symbol of Euro-unity.

Those banknotes could have become extinct last year as Greece’s ruined economy teetered on the edge of Grexit.

Well they are still legal tender there as the country’s eurozone membership continues. Despite traditional Hellenic tax-dodging continuing (our hotel suggested we pay in cash!) the economy is stabilising.

And Cretans are not Cretins. They know how to attract trade and tourism to their fabulous island. No wonder Europa was so attracted to it.

Let’s celebrate her legacy with a resounding ✔️ in the Remain box in the June referendum.

Syria solutions

Travelling to Beirut from Damascus via Homs in the eighties was a pretty hair-raising experience. For a while the only reasonably secure way of reaching Lebanon’s capital was starting from Syria’s capital.

The journey we took was at its most surreal when “encouraged’ to sing songs at the border crossing – as a humiliating penance for failing to produce $100 for its guards – and then being “invited” to camp down there as dozens of Syrian rocket-launchers roared freely into their neighbour’s country through the night.

Returning through the Bekaa Valley one evening a few days later it got even weirder. Once again we enjoyed the hospitality of Syrian forces – this time intercepted at gunpoint and driven to a Damascus barracks before being released unharmed at dawn.

Beirut, August 1982

What were we thinking? Your author (tall bloke, far left) with Euro student union group in The Levant, 1982

That’s the closest I have been to Syrian military hardware. Millions have experienced it even more closely and brutally, especially in recent years.

So what special insight do I have for the country’s current troubles whose bloody and humanitarian reverberations are so affecting us?

Well, none really. Other than a growing feeling that, to defeat the greater evil of ISIS, we need some kind of temporary accommodation with Bashar al-Assad’s horrid regime which – by the way – we should have confronted properly in 2013.

Indiscriminate barrel-bombing by his vile henchmen accounts for 95% of the country’s recent destruction. That has led to 330,000 dead, seven million people internally displaced and five million fleeing as refugees in the last five years.

Not a good guy then. But in the league table of evil he comes a few rungs below ISIS whose horrors my vocabulary is too limited to describe.

I confess to applauding the regime’s retaking of ancient Palmyra. And now I want it to keep going. Onto Raqqa and anywhere else where the caliphate reigns.

The current US-Russian led Geneva-brokered “cessation of hostilities”, which excludes ISIS and Nusra Front, has enabled the regime to direct its firepower on their forces. Can we help them do that by sharing intelligence? Co-ordinating our air strikes with their ground troops even?

Let’s keep that accommodation going while the talks continue to create a diverse, tolerant and democratic opposition to Assad and ISIS. Pipedream maybe.

And if the price is to allow Assad to have some role in rebuilding Syria without a referral to The Hague, then we might just need to bite that bullet before too many more Syrians are shot by one.

[Got that off my chest as the third introductory blog on my three chosen subjects…..back to sport and business matters now!]

A friendly digital divide

My best friend is a leading travel journalist. He champions the consumer. We have collaborated on articles and videos from numerous destinations over the years.

Although an Uber user and no luddite, he has reservations about and through Airbnb and some hostility towards online discount hotel booking services like Trivago, majority owned by Expedia.

That has caused a digital divide between us.

This week, in Majorca, he only half-jokingly mocked my substantially reduced-rate reservation at our supercool hotel through one such “evil” service. Once again, I insisted they are only doing for the discerning traveller in need of a room what Uber is doing for the traveller in need of a ride.

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Palma: scene of a digital rift this week

I say it is just a clever technical platform built to respond to personal tastes and price preferences. Hotels are not forced to become its partners but, if they don’t, their rooms will slip off the retail radar.

No wonder a report last year showed executives in the hospitality and travel industry stand out as believing more than in any other that their business is most at peril from digital disruption.

Friend says these services are unfair to the poor hotel owner whose margins are being squeezed by anonymous and remote multinationals. Furthermore, a direct booking is often cheaper and might offer occasional extras like a free ride in from the airport.

Fair enough, I retort, but the online service at least gives travellers a chance to compare deals and my heart is not going to bleed that much for hotel multinationals who dominate the industry and who need kick-up-the-arse competition.

As for Airbnb, it’s just an Uber with beds. No one is forced into offering or renting rooms through them. If taxes are being avoided, that’s not their fault – politicians and their public revenue authorities need to toughen up.

And so the argument went on over the ensaïmadas and coffee: enjoyed at an 18th century Palma cafe but discovered through 21st century technology.