meta-roj

appearing in the economist, how to run a company well gives a list of ten “commandments.” only they’re not commandments… (natch). nonetheless, a few comments on these points…

their first “commandment” (a sound ethical compass) is an echo that “getting the evil out” just isn’t easy. once it becomes an institutional issue for a company, even breaking it up into baby-rails or baby-oils or baby-bells leaves the evil largely intact. evil can even be a cancer that spreads by acquisition by all accounts diebold was a fine corporation with a solid 144-year track record of good work, until they compromised it by getting into the electronic voting business.

i guess this is “commandment #1” since the “corporate scandal” and reflexive “we’re not evil” response is going around a lot lately. personally, i fear a lot of this “not evil” is more of a statement than anything else – even google, famously not evil, flirts occasionally with evil.

over the past few years, i’ve been wrestling with concepts to make “doing the right thing” a part of a corporate structure. it’s not enough to say “we’re good people” – i’m looking for ways to build trust and responsibility into the corporate fabric.

another article in the same issue got ryan’s attention, and demonstrates, to me, at least, that the typical management-directors structure isn’t entirely effective anymore. poor performance and poor ethics are rewarded – more than ever.

i believe in building empires (#4 ambition), but i also believe in playing positive-sum games. does that make me an idealist? unrealistic? crazy?

now, if only my fairy godmother would send me to charm school (#10)….

i’ve often joked that ticketmaster is the third most-hated company in the world – after microsoft and the united states federal government. people like to pick the nits in that statement, but i use it to make a point… and sometimes the point is made (sometimes not 🙂 ).

there are evil companies in this world, and some of them grow to be evil empires. many of these are transient, especially in the technology business. sco is collecting a lot of hate these days. and sunncomm got a quick dose too. i’ve got a heaping spoonful for diebold. history is full of them, and there’s probably a very tight correlation between monopoly (literal or perceived) and the tendency to abuse customers and create the hate, but someone else is going to have to do that study.

sometimes, however, an evil company or evil empire manages to spin their image just enough to avoid getting too much negative attention. i think this is getting harder to do, but my favorite example – and my personal most-hated-company is none other than walmart. it’s an amazing study. walmart doesn’t get my business.

a little over a year ago, martin kuz wrote a piece for cleveland scene which was, for me, all the confirmation i needed.

martin kuz

In the last six years, judges have slapped the company with at least 75 sanctions for destroying, altering, and hiding evidence, according to documents filed in numerous suits against Wal-Mart across the country. It has racked up millions in court fines for destroying photos of accident scenes, denying it performed safety studies, and concealing company records.

At first blush, 75 violations amid thousands of cases seems an irrelevant percentage — except that the number appears to represent more sanctions than those of all other Fortune 500 companies combined.

say what you will about their business acumen, about the economic impact of the “walmartization” of america, about their bullying tactics, about their economic power or about anything this company does, good or bad. for me, this falls into the category of “repeat corporate offender” – and an incredibly harsh sanction is in order. obviously the penalties levied against walmart aren’t doing enough to change behavior. for a company this size, it’s just a line item in the budget.

here’s my little bit of light on walmart. it’s time to demand better.

a couple weeks ago, i ran across an article from wharton describing the trouble with suing customers as a business model. i left myself a note to come back to it at some point, but life intervened, and in the meantime, i posted a “business model of the hour” based on bounties and lawyers.

the wharton article, by g. richard shell goes into some detail about an old attempt to sue customers into submission by the ford motor company.

i don’t have much to add to the article, but it echoes some important themes that i’ve been (subconsciously?) discussing here with regard to diebold and sunncomm. the theme is “lawyers make exceptionally poor policymakers.” just because you can make a case doesn’t mean you should pursue a case.

i tried to hint here that we’re all liable for something, so be careful where you throw stones. the business world is getting more and more transparent, and those walls keeping you out of court might just be made of glass.

worse, while you’re busy feeding lawyers (and putting their children through law school), the rest of us are applying our resources to strategic problems, and eventually we will eat your lunch. when you go for the lawsuits, especially against customers, you’ve shown your hand – now we know you don’t have a better widget, and we know you’ve traded long-term strategy for short-term tactics.

timothy burke of swarthmore’s history department has a thoughtful comment on the diebold events unfolding at the college.

this is an important read. it may change some of your opinions of the situation. i still think swarthmore should be spinning this differently, even if they feel compelled to comply with dmca provisions. these are bigger issues. copyright should never be used as a shield to obscure the truth.

one point that is clear from this message is that the effort to drag diebold into the light needs to be more focused and precise. and i agree completely. random hosts and random comments from random people will keep the memos “exposed” (and no matter how many letters diebold’s lawyers send, they won’t go away), but chasing documents around the web with lawyers is a waste of good intentions.

this needs a call to get organized. don’t just host these memos. write letters to the people who sign contracts with diebold. and your elected officials. demand accountability and transparency for every company involved in the voting process. nothing less is acceptable.

and if that doesn’t work, tell your local election officials (election day is coming up, they’d love to hear from you so you can complicate their lives in the next couple weeks) that you won’t vote using diebold machines and demand an alternative.

directv has an interesting approach to piracy… a short interview with “enforcement chief” lucas graves in wired sheds a bit of light…

wired

The company has filed about 10, 000 lawsuits and mailed more than 100, 000 “demand letters” giving suspected pirates a brutal choice: Pay $3,500 to settle or go to court. Problem is, the campaign targets anyone who bought smartcard programming gear from certain merchants; officials just assume it’s used for hacking.

[wired] Your letters don’t distinguish between pirates and people who program smartcards for legitimate reasons, like security systems. Why not?
[graves] If an individual claims to have a legitimate use, he or she can furnish information – a business plan, maybe schematics – and our staff will evaluate it. In at least 20 cases, DirecTV chose not to pursue the matter after the individual provided background.

i’m just not comfortable with the idea of providing a “business plan” or “schematics” to prove i’m innocent.

are any tech-legal groups stepping up to defend anyone yet? 100,000 letters is a wide enough net that there should be more noise on this.

a while ago, i took a quick crack at the top end of the music business and used hollywood as a model

today i stumbled into a different application of the hollywood model.

i’m fairly enthusiastic about the hollywood model. i think there’s a lot to learn here. regardless of the mechanism, when you go from a situation where you control your distribution channels (or think you do) to a situation where your distribution channels control you (or threaten to), hollywood, as an industry, demonstrated at least one approach that works, sometimes.

in a front-page article in usa today, we find a brief presentation of the sunncomm story (1 2 3 4).

i think this counts as “more light on sunncomm” – this is “mainstream” and “non-technical” mass-market press. a couple bits are worth mentioning…

Jacobs knew nothing of Halderman’s research until shareholders started calling. He’d pulled SunnComm out of a crater during three years of tech-industry malaise, he says, and Halderman was out to ruin it. “He wanted to embarrass the record industry and put us out of business,” Jacobs says. “I had to launch a public defense.

jacobs still doesn’t quite get it… first, it’s very dangerous to go on the record declaring the intentions of other people. second, this wasn’t about putting sunncomm out of business (surely, there’s an easier way to do that…) i don’t want to commit the sin i just decried, but it seems to me that “the secret” would’ve “gotten out” no matter where this scheme originated or who decided to tease it apart. jacobs seems to have taken this very personally – and that probably resulted in a lot more damage to sunncomm.

BMG considers SunnComm’s system “an important first generation of the next generation of technology,” says spokesman Nathaniel Brown.

He offers proof from the sales of the Hamilton CD. Unprotected CDs typically see sales drop 35% to 45% in the second week, as pirated versions circulate. Sales of the Hamilton CD fell just 23%.

this is an interesting new spin on piracy that i hadn’t heard before…

intuitively, it doesn’t make sense. first, it only takes one person with autorun disabled to “spew the data forth unto the p2p networks” – and that certainly happened. second, this is all relative. maybe the hamilton cd just sucks and nobody’s buying it. i’m not privy to the raw data, of course, so i’m just guessing…

SunnComm has a new version of its technology ready. BMG plans to use it. The other major record labels are interested.

so much for my crystal ball… i wonder if this statement will ever be reflected in sunncomm’s bottom line.

this is significant.

(with a nod to sidney harman. this is a guy i need to meet)

after this post i intended to do a full measure of homework on the subject of diebold and the voting machines that cannot work. this is an important story, but a convoluted one, and i can’t hope to catch up anytime soon. instead, i’ll drop in a “starter” syllabus, make my comments and let this thing unfold into the future…

back in september, there wasn’t a whole lot of traction for this issue, i’m glad it’s picking up. i’m right on the front line of people who may or may not actually get a vote with these diebold boxes.

as mentioned, this got my attention with the hopkins report and the fact that the state of maryland was pushing toward a statewide, $55.6 million contract for diebold machines. to briefly follow that up, the state asked for an independent review of the hopkins findings. science applications international decided that most of the issues could be “lessened.” with that report [pdf], the governor authorized the purchase of the machines. most recently, a couple legislators have asked for a follow-up review. lots of interesting details, but apparently the first saic report “never considered the option of buying different machines.” that’s the local/personal issue. that’s how i got involved.

as is the case with most corporate criticism, i think it’s important to start with the company itself and see what they are about. (it’s not much good to criticize a company that makes lumber for chopping down trees…) about us – the brand (diebold website). “We won’t rest until we measurably improve the extent to which our customers’ customers are delighted with our self-service and security solutions; and we measurably improve the effectiveness and profitability of our customers’ business.”

now that we have a good, solid corporate policy to start with, here’s what’s going on (some random links, slashdot links because they bring with them a lot more links)… go ahead – do some background reading and come back – or just skip ahead…

diebold issues cease and disist to indymedia (slashdot)
evoting patches skew election? (slashdot)
evote firm seeks voter approval (wired)
md. democrats want outside voting machine audit (washington post, registration maybe)
targeting diebold with electronic civil disobedience (why war?)
to win contract, diebold offers the state a carrot (cleveland plain dealer)
diebold memos disclose florida 2000 e-voting fraud (scoop, new zealand)

apparently, diebold “won’t rest” until nobody’s asking questions. i don’t think people are going to stop asking questions now.

it’s also very disturbing to me that more academics and internet service providers aren’t sticking their necks out in the name of american democracy. you are in this too. swarthmore college, and dean robert “we can’t get out in front in this fight against diebold” gross should be ashamed. this isn’t a fight against diebold, this is a fight for functional elections. if you can’t get “out in front” on that issue, in this country, you have no business being an “educator” or “role model.” i’ll put this in simple terms, despite being loathe to make this personal: you, sir, are a coward. stand up for a principle and lead by following your students.

shame on the isps and institutions that are caving at the first hint of law firm letterhead. you should know better. in case you needed the clue, i’m here to buy it for you. as people and as corporate citizens in the united states of america, you have a responsibility, and you’re not living up to it.

now, on to the whipping-boy company of the hour. diebold.

founded in 1859, this is a company that is built, entirely, on reputation. 144 years of building confidence have gone into this corporate entity. i haven’t gone over the whole corporate history, but one thing that did get my attention was that in 2001, diebold was awarded a contract to secure the constitution, bill of rights and the declaration of independence. the pieces of paper which define our form of government are nice, and certainly worth protecting. but the principles are more important, and are abstract so they can’t be locked in vaults with fancy alarms. diebold was [apparently] doing pretty good until it decided to acquire global election systems in 2002. now, more because of how they’ve responded to the situation than the situation itself, diebold is on the permanent list of bad corporate citizens.

diebold may be forgiven for being a “greedy corporation” and pulling every string they had available to win contracts, but they should never be forgiven for compromising the voting process in america with one hand while taking money to lock up the founding documents with the other. they may be forgiven for not realizing they were buying a company (global election systems) with flawed machines, but they should not be forgiven for compromising their 144-year reputation of trust by attempting to whitewash and backpedal once the flaws were identified. finally, voting is the most precious thing we do in this country, and they should never be forgiven for being anything less than fully transparent when it comes to their role in the process.

diebold, you swallowed a poison pill. we tried to save you from yourself. to induce vomiting, as it were, and get you to come clean. you had the chance to come clean and do the right thing and fix this mess. you had the resources. when the light shone on you, you ran for the shadows. much like sunncomm, you picked the wrong tool. you let lawyers run your policy and tried to get back a secret. you compromised your corporate vision (such as it was) and reputation (such as it will never be again) in pursuit of short-term opportunity.

put your lawyers on the folks at global election systems that sold you the broken systems. put your lawyers on yourselves for not doing enough homework to know you your boxes were compromised. it’s too late to redeem yourself in my eyes, but maybe you can save something.

this light will get hotter on diebold. the mainstream media will bring resources to this story. we (the voters) are not delighted. diebold should not be trusted.

update (2004.11.17): metafilter has a bit on the constitution contract.

the new york times is reporting that jack valenti thinks he’s at the top of his game, and wants to “go out” with his “own timing.”

best wishes, jack. it’s been an interesting 37 years.