Spinning plates, tech giants, Newsnight and the Bank of England

Well, must say that was quite weird – to switch on Newsnight tonight and find that the chief economist of the Bank of England had been thinking the same thoughts as ones running around inside my own head.

Andy Haldane (for it is he) was saying that the extreme primacy of shareholders is damaging capitalism.

His interview has forced me into belatedly putting pen to paper (or Mac to Blogger as it is nowadays). I wasn’t coming at it from quite that angle, but had some weeks ago intended to say the following…

I was thinking about the relationship between the great tech giants: Microsoft,  Amazon, Apple, Facebook and Google - and how one might coach their chief executives to triumph over the competition.

My thesis was simply this – that the winners in the 21^st century corporate wars will be the ones that best balance three sets of stakeholders at the core of what they do: the owners (shareholders), the employees and the clients. It struck me that historically these companies have by habit and culture ‘weighted’ these three interest-groups rather differently.

For example, although Amazon preaches the gospel of client-centric design, increasingly one gets the impression the company is consumed by the desire to satisfy shareholders – initially at the expense of its lowly employees – and perhaps now even relegating its own clients to a poor second – as witnessed by their increasingly aggressive up-sell techniques. As with the banks, the ‘lifeblood’ of their business, their client base, at some imperceptible point inflects to become a passive cow, there to be milked.

Anyway – it struck me that running these companies is like spinning a plate on a pole. Now imagine that there are three weights – placed at even intervals along the circumference of the plate. If the weights are all about the same, the plate spins nice and smooth. But if one or two of the weights are heavier, then the plate’s orbit inevitably becomes lopsided.

If the differential isn’t too extreme, the plate continues to spin – just at an inclined orbit. But if the difference gets too extreme – then of course the orbit is no longer sustainable and the plate comes crashing to the ground.

It is my view that company failures are often down to an inability to balance these three sets of stakeholder needs properly over the long haul. Orbits become lopsided, the fall comes and disintegration follows.

My intention had been to pitch this as some kind of smartipants business insight. But seems I wasn’t so clever after all. The same thoughts are out there. But at least I should console myself that they are being broadcast by the chief economist of the Bank of England.

Funding the BBC

The future funding of the BBC is once again in the spotlight as its Royal Charter comes around for renewal. For years the arguments for and against the Licence Fee have been rolled out, but it strikes me that there is an opportunity to approach the whole thing quite differently and kill two birds with one stone. My starting point may seem off beam – but bear with as it all comes together by the time I’m done.

IT’S A UTILITY STUPID

Increasingly you hear people talking about access to wi-fi, and more broadly to communication channels, as a utility that they ‘can’t live without’. To future generations it will doubtless seem weird there could ever have been a situation where there wasn’t an integrated national communications net.

In the early days of electricity there were a host of different providers with competing infrastructure, using different voltages and so forth. This is inconceivable now. And so it will be with communications in future.

OWNERSHIP STRUCTURE

Rather than being dragged kicking and screaming into the future – too often the default position for British politicians and civil servants – why not actively prepare for the future and actively promote a single national communications net. So what would such a thing require? In short, a single entity should take over the following:

* telecom infrastructure (BT)

* cable infrastructure  (Virgin)

* mobile mast/network infrastructure (Vodafone/BT/3)

* terrestrial TV/radio masts (Arqiva)

The new national comms entity would run all digital ‘pipes’ in the UK, while private operators run consumer-facing services using this infrastructure. In other words, not unlike Network Rail providing the tracks for private train operators. (Perhaps not the happiest comparison, but anyway…)

Getting the ownership structure for this national entity would be tricky. Without wanting to get too bogged down on this aspect, let’s just say it would nice to see it split between:

* the operators

* the employees

* the government (perhaps with a ‘golden share’)

Will Hutton for one is enthused how a public utility – in the form of Welsh Water – can thrive outside of the greed-infested realm of stockmarket PLCs.  Making employees stakeholders could certainly aid productivity. I don’t see John Lewis doing too badly.  But the operators themselves also need a stake – as does the government, to ensure consistent and fair coverage across the nation (ie: limit blackspots in unprofitable rural areas)

BBC ANGLE

So what’s all this got to do with the BBC? Good point. It didn’t escape my notice that many of the ‘operators’ in this digital landscape will be carrying BBC output one way or another. So instead of a licence fee, this national comms entity pays for the BBC – passing on the cost to all operators being billed anyway for accessing the infrastructure. The operators then pass on these costs to their customers (ie: the great British public in the main).

But is it fair? Well, it’s not less fair I’d say than a flat licence fee, which doesn’t take account of individual levels of consumption. In future, operators may charge customers in line with the amount of data they consume. As such, the portion of costs passed on for Public Service broadcasting would be very roughly correlated to data consumption – which doesn’t seem entirely unfair.

What about Sky? You may have noticed that I haven’t talked satellites. I’m not going to go into detail here – but suffice to say – that I have thought about this angle and don’t see why the model proposed here is invalidated by the presence of  satellite broadcasters.

DREAMWORLD

Of course, one could dismiss this all with a single wave of the hand saying it’s grotesquely unrealistic politically. Maybe so. But that doesn’t mean it’s a bad idea.

And one final bonus thought:  a national comms utility probably won’t go around digging up the roads as much…

* Let me know what you think. And if you want to know more, drop me a line.