In praise of gatekeepers: The growth of apps and decline of the web

The recent White House announcement on net neutrality offers an interesting paradox. On the one hand, the president believes that the currently unregulated Internet “(m)ore than any other invention of our time…has unlocked possibilities we could just barely imagine a generation ago.” These innovations include “digital devices, apps, and platforms that fuel growth and expand opportunity.” On the other hand, the president is adamant that “there should be no gatekeepers between you and your favorite online sites and services.” He can’t have it both ways. Aside from the fact that the Internet has never been neutral – e.g., larger content providers are able to afford transport and delivery services that their smaller rivals cannot – evidence is mounting that customers prefer service with gatekeepers and that gatekeepers are a primary source of innovation. The White House’s disparaged gatekeepers are Internet Service Providers (ISPs), those broadband providers who some believe seek to limit the value of their services by restricting what customers can do on the web.

Read In praise of gatekeepers: The growth of apps and decline of the web on AEI


Perhaps we could learn a broadband policy lesson from the Aussies

Having embarked in 2008 on a $40+ billion project to build fiber to nearly every home, Australia had the good sense to do a cost benefit analysis to see whether this effort was worth it. Admittedly, the analysis was a bit late – it began in 2013 – but it found that citizens would have been better off if the government had done nothing.

Read Perhaps we could learn a broadband policy lesson from the Aussies on AEI.


Ex Ante Regulation of Google?

Recent calls for ex ante regulation of Google are reminiscent of other calls for regulation of IT companies. Remember the calls to treat Windows like a public utility, or iTunes as an essential facility? These were all misguided because they misconstrued the basics of the proposed regulations. The calls for regulation then and now also contain an unstated premise that rules designed for truly monopoly industries with public franchises and stable, long-lived technologies could be successfully applied to companies whose technologies change daily and whose customers readily move on when something better comes along.

Find the paper, Should Google Search Be Regulated as a Public Utility? on SSRN.


Leadership at its Best

Recently a utility CEO said something that made me step back and appreciate wisdom. Asked for an important lesson in leadership, he observed, “Leadership isn’t about me. It’s about the team.” He went on to explain that leadership isn’t about being in charge, but rather about ensuring that the team has the conversations and makes the decisions that are needed to move forward.

This CEO’s perspective has a lot in common with that of Liu Xiaobo. Mr. Xiaobo’s life and his words have stimulated a worldwide discussion about what it means for people to make progress, the nature of progress, and its price.

“I have no enemies, and no hatred. None of the police who have monitored, arrested and interrogated me, the prosecutors who prosecuted me, or the judges who sentence me, are my enemies. . . .

“For hatred is corrosive of a person’s wisdom and conscience; the mentality of enmity can poison a nation’s spirit, instigate brutal life and death struggles, destroy a society’s tolerance and humanity, and block a nation’s progress to freedom and democracy. I hope therefore to be able to transcend my personal vicissitudes . . . to counter the hostility of the regime with the best of intentions, and defuse hate with love. . . .”

Liu Xiaobo, the 2010 Winner of the Nobel Peace Prize, from his final statement before going to prison.

I think most of us would agree that Mr. Xiaobo is practicing leadership. However, notice that his leadership stands in stark contrast to the common notion that leadership is about directing others. The people that Mr. Xiaobo is impacting would not consider themselves to be his followers: His words have caused you, me, and a world of others to pause and think about our aspirations, to compare the way we live to how he lives, and to reflect on partisanship and other divisions in today’s world. He is not directing us; rather he is causing us to engage in conversations and make decisions that are needed for our countries to move forward.

The CEO and Mr. Xiaobo tell us something else about leadership at its best, namely that it opens our minds. Divisive comments resonate when they highlight the good in “us” or condemn the evil in “them.” Such partisanship rallies our hearts towards a shared cause, perhaps even a good one, but it ultimately poisons our spirit and imprisons our minds, preventing us from having the dialogues we need for progress.

What can you do with these leadership insights? If you are in charge of a group, look for examples of leadership within your group, and give those practices the energy and protection they need. Also look for ways to develop leadership skills within your group, namely the skills needed to provide leadership without being in charge. If you find yourself within a group, look for situations where the group is not recognizing difficult realities, is holding onto traditions that hold it back, is resisting open discussions, or is failing to learn from novel experiences. Finding these, engage allies to mobilize the group into serious consideration of your observations, all the while recognizing that your ideas are, at best, only partially right and that, with proper leadership, the group’s insights are likely to be better than your own.

Finally, remember the words of Lao Tzu, “A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: We did it ourselves.”


Outdated or Wise? Innovative or Naive?

with Araceli Castañeda

A knowing chuckle spread across the room of utility executives and senior managers. A show of hands revealed that one fourth will retire within five years and about half in 10 years. That magnitude of loss was true from the company managers all the way down to the craft workers.

Everyone agreed that this was a problem. Was it a technical problem that could be solved through changing hiring practices and implementing training programs? Or was it an adaptive challenge where employees and the company would have to make hard decisions about what they valued most?

Aging workforce is a well-known problem for utilities, as it is for other industries. When utilities expanded in the 1960s and 1970s, they hired a large number of people that were just entering the workforce and these employees, many of whom have now worked for the same company for 30 years, are nearing retirement. Some people worry that when these employees go, a lot of knowledge, wisdom, and loyalty goes with them. Others are happy to see the older generation go.

Who is right, those who worry or those who can’t wait? Probably both. Aging workforce presents both a threat and an opportunity for companies facing a changing economic and regulatory climate. The key questions companies have to answer include:

  • What from the past does the company need to retain to be successful in the future?
  • What from the past holds the company back from future successes?
  • What losses are the older generation experiencing that may cause them to sabotage knowledge transfer?
  • What beliefs and attitudes do the new generation possess that may cause them to reject the most important lessons from the past?

Some of the knowledge to be kept is obvious: Where are problems likely to occur in the transmission lines? What is the best way to communicate with emergency management officials when a major storm hits? However, some traditions that pass for knowledge may hold a company back. Rivalry between organizational silos can keep a company from adapting as circumstances change. Memories of failed expansions into new lines of business can make a company overly conservative. And predominance of close relationships with like companies can reinforce conventional wisdom.

How can a company develop a culture that can determine what from the past to remember and what is best left behind? One company – not an electric utility – developed interdisciplinary experiment teams, whose mission was to identify and carry out trials that would test conventional wisdom and new ideas. Another company organized its troublemakers to openly debate the questions others wanted to avoid and expose the company to threats that others pretended didn’t exist. In a third company, the CEO allowed disgruntled employees to vent at him publically, thus establishing a culture that celebrates the discussion of elephants in the room.

How can a company address the losses, beliefs, and attitudes that separate generations? Some companies establish programs that honor the roles of aging employees and help them establish new roles outside the company, maybe within the community or in an organization that celebrates the company’s past. Other companies hire pools of talented, young employees that rotate through the company during their first few years of employment. Yet others develop leadership academies that expose younger employees to all aspects of the company and to senior employees, and have the academy participants work in interdisciplinary teams on experiments of their choosing that test new ways for the company.

The wrong approach to addressing the aging workforce issue is to assign it to HR, treating it as a personnel issue. The adaptive challenges of aging workforce cut across all dimensions of an organization and involve everyone.

What happens if a company ignores the adaptive challenges of the aging workforce? The 50 percent or so of employees who are going to retire will do so, and the company that is left behind will be a consequence of attempts to put new wine in old wineskins: It won’t be the company created by the retired generation because they will be gone. It won’t be a company formulated by the new generation because it is simply being fit into the old generation’s structure. Nor will it be a company jointly developed by the best that the old generation and the new generation have to offer because they never worked through what to keep from the past and what to create anew. At best, the company will be an accident of history. At worst, it will belong to somebody else.