Helping customers combat climate change through more responsible purchasing:

Many buyers are not fully aware of the impacts of their purchase decisions upon the environment, according to Prof. Colin Coulson-Thomas, or the extent to which the consequences of their actions are contributing to climate change.

Speaking at the Global Convention on Climate Security (Palampur, India) the author of ‘Winning Companies; Winning People’ suggested “Some might behave differently if they appreciated certain connections and were more aware of the implications of their actions. An understanding of the outcomes of different options might enable them to select a way forward that minimised harmful effects.”

Coulson-Thomas’ investigations have revealed: “Many corporate boards would like to contribute to combating environmental challenges and climate change, but they have yet to identify practical and cost effective ways of turning their noble aspirations into concrete outcomes that will help to save the planet. At the same time many consumers do not fully understand the differing environmental impacts of alternative options.”

According to Coulson-Thomas: “Pioneering companies are using a new generation of support tools that can help people to make more responsible purchasing decisions by enabling them to select offerings and courses of action that will have the least harmful consequences. The same tools can lead to more business from concerned citizens, as well as: boosting the performance of key workgroups such as front line sales, account management and support staff; speeding up responses; reducing cost, risk and stress; and improving quality and compliance.”

The Professor has found that “It is possible to increase sales while at the same time helping customers to select more environmentally friendly options when they buy. The outcome is a win for the supplying company, a win for customers, and a win for the planet, our children and future generations.”

In relation to climate change, environmental and other impacts, Coulson-Thomas raises certain questions: “Should the governing bodies of organisations accept responsibility for making customers and users of various corporate offerings more aware of the consequences of their buying decisions?  Should directors take steps to encourage and enable more responsible and less harmful purchasing?”

Coulson-Thomas believes: “Too often social responsibility and other policies remain as words on paper and there is a wide and growing gap between boardroom aspiration and the reality of conduct on the corporate front line. Many boards need cost effective ways of implementing policies for confronting and handling climate change and other issues if their good intentions are to result in desired outcomes.”

The challenge for many suppliers is to find ways of helping customers to understand the implications of different options and make more responsible choices. Coulson-Thomas finds: “Many companies view environmental impacts and climate change as a challenge rather than as an opportunity. Understanding impacts and consequences, especially negative ones, is a first step towards reviewing and developing one’s portfolio of offerings, and being more transparent. Working with customers and prospects in this process can help to build more mutually beneficial and longer lasting relationships with them.”

In essence, “the approach is to make it much easier: for staff and customers to understand complex options, inter-actions and implications; for people dealing with customers such as contact centre teams, sales staff and account managers to do difficult jobs ; and for customers to make responsible choices. Ideally customers can be helped to help themselves.”

Coulson-Thomas’ investigation suggests “The emphasis must shift from selling to enabling customers to determine the least harmful or most beneficial option from the point of view of the environment and climate change, and making it easy for them to buy a solution that addresses their individual needs, priorities and concerns.” He demonstrated that it is possible to do this in a way that also frees people from dependency upon particular locations and supports mobile activities, relocation, outsourcing and different ways of working and learning.

The approach advocated in the Professor’s speech and book has been adopted by pioneering users and can and does boost performance and speed up and enable bespoke responses, as well as reducing stress, avoiding risks and cutting compliance costs. He reveals: “Such favourable outcomes have been achieved within a year, achieving returns on investment of 20, 30 or 70 times on just one outcome measure and a quick payback at a time of adversity when funds are scarce.”

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The Global Convention on Climate Security and Eco-Investors Forum was held at the S M Convention Centre, Palampur, India. Politicians, business leaders and academics spoke on Governance for Climate Security, Business Innovation, Social Change and National Security.

The support tool for enabling more responsible purchasing that was used as an example at the convention was developed by Cotoco and information on other tools for supporting the relationship between buyer and seller can be found on www.cotoco.com.

Further information on what high performers do differently in areas that are vital for corporate success, such as sales, pricing and purchasing, and how support tools can make it easier for ordinary people to do difficult jobs, can be found in Colin Coulson-Thomas’ book ‘Winning Companies; Winning People’ which can be obtained from www.policypublications.com. Details of reports setting out critical success factors for purchasing and other activities can also be found on the Policy Publications website.

Dr Colin Coulson-Thomas, author of “Winning Companies; Winning People” is an experienced company chairman and an advisor to corporate clients worldwide. He is the author of over 40 books and reports and has helped over 100 boards to improve director, board and corporate performance; reviewed the processes and practices for winning business and building customer relationships of over 100 companies; and spoken at over 200 national or international conferences in some 40 countries.  He can be contacted via www.coulson-thomas.com  

There are many reasons to be cheerful, even in hard-pressed recessionary times, but for the good people of Northern Ireland the recent much-headlined and globally discussed intolerance of incomers is not one of them.

InvestNI, the inward investment arm of the Northern Ireland government, will doubtless despair but now redouble its efforts to rebalance media coverage of displaced and disillusioned Romanians and other minorities.   ‘Inward investment’, after decades of isolation, is an economic imperative – although InvestNI’s fashionable use of the term FDI is, in a country foreign to incautious use of the language, an indicator of distance between leaders and those they would wish to lead.

In my altogether more optimistic editorial (‘Why NI?’ January 2008) I set out the reasons for investing in Northern Ireland – the scale of opportunity, rich seams of home-grown talent, pioneering roots, the goodwill of a distant Diaspora.  Despite mishaps along the way those reasons are more-than-ever valid.

But in that article I described an earlier phase of Northern Ireland’s economic recovery as ‘Isolation re-melded as silo-nation’.  The depressing media coverage of the past week reminds us that, whilst governments can legislate and pursue processes for economic development, societal get-well plans are altogether more difficult to deliver.  Travelling towards tolerance from hard-fought decades of determined resistance will always be a haphazard journey.

The impacts of these distances, the gaps between economic and societal development, between governments and governed, between haves and have-nots, between the connected and the ‘doubly-disconnected’, has been mapped with sobering seriousness by the research team of Kate Pickett and Richard Wilkinson in their timely publication of ‘The Spirit Level’.

The data is undeniable, ‘More-equal societies almost always do better’, and the impacts of real (and perceived) inequalities can be measured across umpteen facets of society – in drug usage, violence, education, mental health, obesity, child wellbeing, anxiety, teen-age pregnancies, trust, social mobility and life expectancy.  Despite vast investment in health services, when the distance between equality and inequality lengthens, the benefits of economic growth no longer deliver correspondingly positive societal developments.  Some would say that this is the true cost of so-called ‘free’ markets.

Throwing money at dealing with the impacts may help cope with the accidents and emergencies of societal casualties but does not address underlying causes.  Whether it’s the yawning gap between what is said and what is heard, the fear of differences between ‘us’ and ‘them’, the very local versus the wider viewpoints, or the perceptions and realities of unfairness, the stretch, that acceptance that we call ‘tolerance’, starts to break more of the strands that bind us all together.

As in England, where this week the Commission for Rural Communities is launching its ‘Mind the Gap’, campaign for a more equitable approach to Digital Britain, the issues are not about absolutes but more about ranges – the relativities, the distances, the extremes.  It is not surprising that diversity, the fuel of innovation and fresh thinking, is, frankly, foreign to those parts of NI society who believe that they’ve already been left behind.

If, on this journey towards tolerance, your audience starts out from ‘never, never’ land, the effort needed to pull together really does demand exceptional leadership, and time, and patience, and remarkably good hearing, and inclusiveness.

The standard pioneers’ lament, the frequent complaint that others “just don’t get it” (see earlier editorial) is merely a measure of our inability ‘to explain the new concepts with sufficient clarity and persuasive force’.

The Digital Britain report published yesterday may have shaken a few trees but seems not, on first reading of the UK’s media response, to have cleared much deadwood from the minds of those analysts paid to inform the wider public.

Maybe the most valuable outcome of this long journey to a wide-ranging 238-page report (and the promise of 26 further consultations) is to measure from media reactions the distance that must still be travelled.

The Financial Times led the charge by dismissing the universal service obligation as ‘a waste of money’ and, with accustomed London-centricity, considered that ‘the indignity of a slow Internet connection does not prevent crofters from accessing public broadcasting and services’ and complained that there was no need to subsidise ‘the browsing of people who happen to live in network blackspots, verdant islands or isolated idylls’.

This dismissive presumption that all the Internet delivers to distant peasants is ‘Facebook, Club Penguin, World of Warcraft and peer-to-peer file sharing’ was not far from the theme of The Independent’s Jeremy Warner who apparently thinks that Digital Britain is already so successful that any intervention (‘interference’) is unnecessary.  ‘Why’, he asks, ’should us “townies” be forced to subsidise the digital future of those who choose the supposedly higher quality of life of the remote countryside? Did he get as far as looking at the maps on pages 55 & 56?  Or maybe his comments on the damage to fields from 4x4’s was intended to be ironic?

Few champions of free markets are yet ready to criticise privatised failures to invest in economy-enabling digital infrastructures, and rural inhabitants don’t need slow broadband speeds to remind them of this when their computers are already disrupted by electricity power outages.

The Digital Britain report is undoubtedly a huge achievement.  It  is a massive piece of work summarising the collaborative inputs of a vast range of informed stakeholders.  It has raised these topics further up the policy ladder than ever before.  It has opened up new possibilities for a more sensible debate.  It will be a long haul before these issues will be more fully understood – particularly by those responsible for the re-invigoration of local economies.  And, as Lord Carter steps back, the road ahead will need new and visionary leaders – both public and private.

The value of the Digital Britain report will eventually be judged on the priority it gives to enabling new and very different opportunities rather than protecting old and now less-than-fit-for-purpose constructs 

It deserves to treated with greater seriousness than London-based media-focused commentators seem able to muster.

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See the full Digital Britain report

In that editorial all of the featured examples were ‘new-build’ developments – often regenerations of decayed and derelict areas close to existing major cities.  The editorial, essentially a report from an international conference in Stockholm, contained but only one hint of the financial turmoil to come.  The final sentence spoke of ‘anchoring before the tide turns’.  Within six months the surge of collaborative enthusiasm, ‘the rising tide lifting all boats’, would be replaced by ‘falling tides that reveal who has been swimming naked’. 

So now, a recessionary year later, the first question is whether the anchors have held.   There is no doubt that some development schemes have drifted back, some have needed to pay out longer chains but few if any have been swept away or, unlike banks, needed dramatic rescue operations or state funerals.   Most of their suffering has been felt in deeper, wider waters - in the eco-systems of construction trades and home-focused retail outlets.

Only as the tide turns will it be possible to judge how well the grand designs of yesteryear are able to adapt to new circumstances and revised expectations.  The adjustments will reach across a much wider canvas  than current property values and more modest future expectations.  The groundwork – the ‘common ground’ of support – and the ‘re-defining moments’ that the original editorial noted as essential stepping stones, will probably need to be revisited.   If support has ebbed away, if those Nay-Sayers whose support was at best barely lukewarm are now even less enthusiastic, then developers and investors will need to re-define or re-articulate their plans to match the new economic and societal realities.

The developments best placed to steer a confident course are, unsurprisingly, those that were originally designed to have a complex mix of multiple components.  Islands of soul-less out-of-town retail developments populated by national chains that suck money away from local economies may not perhaps be mourned.  On the other hand, ‘mixed use’ places, with better reasons for real people to live, work, visit and create communities, will be identified as a more important part of local economic recovery plans. 

For these regeneration developments the more mixed, the more complex their components, the greater their flexibility in adjusting to changed requirements.  It would, for example, be naïve to disregard the work-space demand from the much battered Financial Services sector – now more than ever in need of more-affordable and purpose-designed accommodation with world-class infrastructure.   Similarly the Media, Tourism, and Education sectors are poised to undergo massive transformations with greater than ever dependencies on smart technologies but also requiring locally available well-educated and skilled people.

All of the 21^st Century City developments identified in the 2008 editorial will now be gearing up for rapid recovery – and those schemes more centrally directed will be seen by their governments as part of their economic get-well plans.  The out-going tide will have exposed any weaknesses and revealed (to stakeholders and investors) the strength of the underlying infrastructure – the parts of the plan that are not normally obvious to casual observers.  

Infrastructure, for any forward looking place destined to grow communities, is much more than roads, transport links, drainage, health services, parks and power feeds.   Data Centres, Network Hubs, local ‘Open Access’ fibre connections – the stuff of today’s ‘Digital Britain’ report and enablers of innovative services – are all more-easily achieved and more likely to be seen as essential differentiators in ‘new build’ developments.   This does not, of course, diminish the value of older city centre locations but it raises the bar and introduces new and radical approaches to infrastructure provisions no longer dependent on last-generation models. 

Today’s Digital Britain report will be judged on the priority it gives to enabling new and very different opportunities rather than protecting old and now less-than-fit-for-purpose constructs.

And similarly, in local economic planning, even the Nay-Sayers of the new will need that stimulus to rethink their determination to conserve, but re-purpose, the old.   The rising tide will, once again, lift all boats.

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The original editorial on which this article is based is '21st Century Cities - a new cottage industry.'

See also:  Islands of Fibre  and 'Fibre more than Faster - Part 2'

The strap-line for the European Connected Health Campus

The answers are not immediately obvious, firstly because the field of Connected Health is dynamic - evolving with much (highly desirable) space for innovation - and is therefore in large part unpredicatable.

Expert knowledge of past and present conditions are of little guide to the future - not least because much of the investment is designed to 'change the way we do things around here'.

There is some awareness of the need for change (most obviously the unsustainability of current healthcare delivery practice) but the urgency and depth of this is not yet widely understood by all actors.

Those of us who are prepared to admit that much innovative progress is accidental or fortuitous must also be prepared to promote serendipity and to sell within our organisations the value of contributing to the common cause.

Secondly, it must be understood that 'Leadership' in the context of the ECH Campus mission is not owned by some CEO-type person, or even a few self-elected directors.  The ECH Campus is a Community Interest Company and it is from the wide perspectives of its community of Members that the Campus management seeks to nurture and distil useful actions and directions.

This process was most recently evident during the 'Leadership Summit' - the first major event after the ECH Campus launch in March 2009 - and its thoroughly collaborative production of 'A Manifesto for Connected Health'.

This also explains our strategy of pushing for an increasingly large and diverse membership base - it is only amongst interactions and energies informed by a wide range of viewpoints that the precious nuggets of breakthrough innovations will be found.

The 'Leadership' of which we speak is, therefore, not the assertion of some superior wisdom but the more subtle process of encouraging collaboration, mediating dialogue between a wide range of actors, garnering and sharing experiences and developing the underlying infratructure to support this common cause of massive and urgent changes in healthcare delivery.

This in turn is why the 'Manifesto' does not have a direct focus on technological Research and Development but has instead laid the foundations for further work on Governance, Engagement, Procurement and large-scale Implementation of Connected Health in order to better inform and energise a wider range of actors.

It is too early yet to be certain of success - but in these intricate and multi-faceted challenges we know that healthcare actors who are not part of the solution will be part of the problem.  So the Campus, whether physical or virtual, must strive to both champion the bigger picture and openly embrace the widest possible engagement.

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For more information on the European Connected Health Campus, visit www.echcampus.com

The rapid routine voice-over intoned at TV phone-in voting moments, that final flourish after a litany of cost caveats crammed into the lower third of the screen, delivers a message that millions of mobile phone users seem happy to ignore.

There may have been a time when big companies resisted the imposition of consumer warnings (smoking kills) but it seems that the mobile phone industry is showing signs of appreciating the virtues of trying to be a little more honest – recognising that these handy liability let-outs will not, on balance, diminish the addictive magic of mobile convenience.

Recent adverts now explain that their demonstrations of the latest mobile gizmo (purportedly showing its brilliant performance and ease of use) have essentially been faked - ‘sequence steps shortened and connection speeds may vary’ – but they stop perceptively short of saying out loud “don’t imagine it really works like this”.

What mobile operators are realising is that their money collecting machinery is in danger of working so well that it is likely  to attract further regulatory intervention – so it makes sense to protest their concern for consumers.

European regulators have already addressed ‘excessive’ mobile roaming charges for voice calls and now, with the discovery by consumers of accidental mega-bills (for megabytes of mobile broadband abroad), these same regulators are revisiting the scene to include action on data calls.  Later this year it is likely that customers can expect to be warned when they are about to inadvertently incur a galloping overdraft on their data download accounts.

National regulators have not always been happy with interventions from Brussels or the implicit criticism of being slow to respond to consumer interests.  During the mobile roaming saga the UK’s early position on European intervention was very much on the side of championing the industry’s interest.

It’s in this regulatory competitive context that Ofcom’s recent deliberation on Mobile Termination Rates (MTR) – the fees charged by operators for delivering traffic generated by other operators -  and a video on the risks of unexpected bills, are  welcome signs.

The various MTR reductions will certainly help to level the competitive playing field within the industry but it is rather less clear whether any of the cost savings will feed through to retail prices.   But maybe that’s not the point;  better perhaps to be seen to adopt a less-than-light regulatory touch than to attract the criticism now being heaped on all regulatory bodies for being unconcerned with market realities and insufficiently interventionist.

At the heart of these consumer cost concerns is a collision, but not yet a convergence, of two very different ways of doing business.

Consumers' Internet expectations have largely been fixed by the fixed-line brigade with the benefit of sunk costs for access infrastructure and revenue growth (often vertically integrated with services) judged against marginal, incremental, costs.

To justify vast infrastructure investment for new and unproven markets, mobile operators needed, from inception, to work out how any of this makes commercial sense.  So, whilst we all enjoy simple flat rate charges for Internet access on fixed broadband lines, on our mobiles we must pay for the content consumed.

The distinction between an Access utility and the Services that are transported across it has never been so stark.  As IPTV traffic grows it doesn’t just become starker; it brings on the pains for ISP’s who have to handle the traffic and it makes for more angry consumers who find that investment in their local access utility is woefully inadequate.  Last generation copper lines are increasingly unfit for purpose and no-one can reasonably expect mobile technologies to fill this void.

The mobile industry may have the better business model but they lack the technology to deliver the goods.  The fixed-line world needs to invest in local access infrastructure (e.g. FTTH) but lacks the business model to pay for it – or at least hasn’t yet recognised that it’s time to learn a thing or three from those mobile upstarts.

So regulators and operators, fixed or mobile, at home or abroad, should be thinking more about convergence and less about political point-scoring.  It would be nice to have a content-cost-free world but only one thing seems certain.  Calls from mobiles will (not may) cost considerably more until such time as all consumers learn to value their content consumption. 

Inaugural lecture of new customer management institute identifies recession opportunities.

Helping customers to cope with economic adversity can create lasting bonds according to Prof. Colin Coulson-Thomas: “Smart companies monitor how their customers are affected by recession and look at what they can do to help customers respond to challenges and seize any opportunities.”

Delivering the inaugural lecture of the Institute of Customer Management in Accra, Ghana on the topic: ‘How Customer Service Professionals can turn Economic Recession to Advantage’, the Adaptation chairman argued: “Recessions create opportunities to help customers, gain competitive advantage and build market share. Suppliers can forge long-term relationships. A friend in need is a friend indeed.”

While in Ghana Coulson-Thomas participated in the initial session of the Institute’s customer management programme, and gave three talks to the Institute’s students on building more profitable and mutually beneficial relationships with customers. He was also a studio guest on TV3’s Sunrise programme, and gave recorded interviews for the channel’s change manager programme, and Tuesday Business News.

Adaptation is collaborating with the Institute of Customer Management in an initiative to help African entrepreneurs and customer management teams review and improve how they manage customer relationships. Several modules of new certificate and diploma courses are based upon an investigation led by the Professor which resulted in the report: ‘Developing Strategic Customers and Key Accounts’.

While western media dwell on Africa’s problems Coulson-Thomas believes the continent’s opportunities are often overlooked “900 million consumers have requirements and aspirations which can be addressed by ambitious and imaginative suppliers. Customer management professionals and entrepreneurs need to engage with customers in new ways that deliver service, value and mutually beneficial outcomes.”

According to Coulson-Thomas, “Customers create value. Suppliers generate scrap and waste unless customers purchase what they produce. Suppliers must work with customers rather than sell to them, and help them to understand their needs and assess available options. Smart suppliers make it easy for customers to buy from them and secure after sales support. They learn with customers and develop bespoke solutions.”

Coulson-Thomas’ ‘Winning Companies; Winning People’ investigation identifies critical success factors for activities that are critical for corporate success such as building customer relationships. He finds:  “The approaches of customer management teams that build long term and profitable relationships with customers are very different from those of teams that struggle and fail. To raise their game, ambitious practitioners need to understand what the high performers do differently.”

The collaboration with the Institute of Customer Management aims to address a variety of development needs. New certificate and diploma courses have commenced that are aimed at entrepreneurs, people who are in or seeking managerial roles; and those who have ambitions to become customer management professionals.

The Institute of Customer Management is based in Accra, Ghana. Its mission is to inspire excellence in customer management. The Institute is collaborating with UK based Adaptation Ltd which helps people and organisations adapt to changing aspirations, requirements and conditions. Details of the company’s support activities can be found on http://www.adaptation.ltd.uk

The new customer management initiative will draw upon a series of briefings that examine different aspects of customer management and recent projects to support people who have responsibility for building mutually beneficial and lasting relationships with customers. The 28 briefings in ‘Close to the Customer’ series and related bespoke benchmarking reports that compare an organisation with its average and most successful peers can be ordered from http://www.policypublications.com

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Over 2,000 companies have participated in Prof. Coulson-Thomas’ research programme which examines what the most successful people, teams and companies do differently in areas such as winning new business and key account management. Reports setting out identified critical success factors and his book ‘Winning Companies; Winning People’ which summarises his findings about the approaches of high performers can also be obtained from: http://www.policypublications.com

Colin Coulson-Thomas, Chairman of Adaptation is an experienced consultant, author of ‘Winning Companies; Winning People’, and consultant editor of the ‘Close to the Customer’ series of briefings on customer management. He has reviewed processes and practices of over 100 companies, helped over 100 boards to improve board and/or corporate performance, and spoken at over 200 national, international and corporate conferences in 35 countries. He can be contacted via http://www.coulson-thomas.com

News channels are saturated with stories of how the bonus culture within the banking sector has led to the problems of ‘Toxic Assets’, the consequential calls for better banking regulation and vitriolic demonisation of deposed directors. 

It’s not surprising that big banks are in the firing line but the media have yet to spot that across many other sectors the endemic bonus culture and weak ‘lightly touched’ regulation has produced problems that are, in aggregate, both significantly scaled and equally difficult to resolve. 

‘Toxic Sales’, the burden of unprofitable deals made in times of gung-ho growth fuelled by bonus-driven sales-folk and approved by their share-price-driven managers, will, if their businesses survive, take a lot of unstitching and reconstruction.

We have not seen this level of accumulated drift in commercial practice since the excesses of the dot-com bubble; the demise of WorldCom and KPNQwest, Global Crossing’s ‘hollow swaps’ designed to boost top-line reporting, and many other Enron-like financial fictions.

The problem of ‘Toxic Sales’ is woven wider through our economic fabric than these celebrity cock-ups and, in truth, it is not entirely possible to separate the issues from those of the financial services sector.  The dodgy deals satisfied City pressures for growth and were facilitated by the availability of debt financing.

The root cause, how businesses of all shapes and sizes got into this mess, is undeniably linked to the bonus culture that was legitimised by widespread but uncritical acceptance of efficient market theories – now more clearly understood as deficient market theory; deficient in the sense that quantity trumped quality.  For small and micro businesses, where all employees are closer to commercial realities, it may be less of an issue but for enterprises employing more than 200 people, the avoidance and remediation of 'Toxic Sales' demands more management time.  

If your company is strong enough to withstand the shock, the simplest (but perhaps least ethical) way of dealing with ‘Toxic Sales’ is to walk away, to resign the business and leave the customer to pick up the pieces and (if they can afford the legal fees) review the original contract in the hope of finding grounds for compensation.   This terminal solution only makes sense if the vendor is prepared to forgo hopes of doing any further business in that market until such time as managements move on and memories fade – which, on current form, may be less than a decade.

If, on the other hand, you have a mix of healthy business and a rotting pile of ‘Toxic Sales’, walking away is not an option.  Some deals may be renegotiated but this approach is massively dependent on the appearance of new relationship managers with a totally open approach and a clear, believable, commitment to future delivery.  The line ‘Surely you should have known that this deal was too good’ is unlikely to impress business customers who are well aware of their own costs previously incurred in the procurement process – the customer’s cost hurdle that eager sales-folk rarely take into account.

The alternative ‘grin and bear it’ approach is fraught with dangers if, in seeking economies, the delivery standards are compromised.   The real cost of wearing your way through the ‘get-well plan’ is found in management upheaval, retraining and recruitment, lost capacity for new and better business and the need for cultural change and process overhauls to ensure that the quality of trading never again relapses.  Bonuses may not be entirely banished but at least they could be linked to doing better, proven higher-quality, business.

This is, of course, a major challenge for senior managers whose personal fortunes may still be linked to share-price movements and fickle speculative City sentiment.  The banks have learned, albeit slowly and reluctantly, to open their books and reveal the scale of ‘Toxic Assets’.  Is it too much to ask that they should understand the notion that business is a two-way street?

Regulators, at least in the financial services sector, are beginning to rethink their understanding of performance quality and the interests of all stakeholders including customers.   Other sector regulators are now more likely to appreciate that they too are required to question the direction of the herd.

The good news is that the recessionary rains are watering recently barren imaginations.  Concepts not previously permitted are showing vigorous growth – for example in the teasing apart of complex integrated businesses to reveal that basic utilities must be managed and regulated in very different ways.  It is perhaps too early yet to declare that Clearing Banks are the fifth utility but the notion that Broadband Access is the fourth is rapidly gaining ground.

Meanwhile it is time for companies across all sectors – especially those companies who are traded on stock exchanges -  to own up to their ‘Toxic Sales’, to declare how these dodgy deals will impact on performance and to reform bonus cultures to match the need for quality business.

Last year’s editorial ‘Fibre delivers much more than faster connections’ has been a popular download but, on reflection, in the light of recent research and the interim Digital Britain report, it did not deliver clear enough messages. 

When those of us who enthuse about innovation complain that people, particularly those in positions of authority and influence, “just don’t get it” we are in effect admitting that we have failed to explain the new concepts with sufficient clarity and persuasive force.   

Often we have to step back from urgent pleading, to let the passage of time reveal the sense of the case for investment in the future and to simply accept the loss of opportunity during this wider learning process.  Innovators, like comedians, have to learn the value of good timing. 

Anyone who has ever tried launching new ideas inside a large organisation will understand that threats, impending risks, usually get more air-time than opportunities and promises.   It’s much the same with public policy.  It is so often the case that until ‘the the disaster waiting to happen’ has actually happened that the penny finally drops and the media-led blame brigade get off on another rush of hind-sight-polished, nose-in-the-air, 'I told you so' crowing – and engineers, like Harrison’s guitar lament, gently weep.

The basic point of the earlier editorial was to plead for a broader understanding of how replacing copper with fibre and managing these new access networks differently  could make a real difference to the service experience.   Hence the central theme that it would be good to look beyond the headline download speeds of the last generation asymmetric design that presumed that it was better to receive than to give.

In truth there never was such perverse design principle – merely a massive design compromise forced by the inadequacies of an ancient and increasingly irrelevant technology and a desire to extract as much profit before admitting to the need for any apple-cart-upsetting new investment.

Banks got into a similar mess by continuing to stretch their money extraction from diminishing real assets – over-valuing the intrinsic value of the property base in much the same way as Telco’s would not want to admit that the copper in the ground is increasingly unfit for purpose.   To update ancient Greek advice; beware banks (or Telco’s) promising innovation.

What was missing was the point that the purpose, for which these networks need now to be fit, has changed.  It’s a very simple point but not one that is easily explained to, or comprehended by, those who develop public policy.

Look for example at the excellent, some would say brilliant, articulation of UK economic policy in June 2007.  As an adjunct to the Comprehensive Spending Review, underscoring what was expected to be a seismic shift in the way the country was governed and the relationships between central and local government, we have the classic Treasury-led paper ‘Sub-national economic growth and regeneration’ followed a year later by its follow-up ‘Prosperous Places’. Perfectly aligned with the new aims and aspirations of DCLG, the ownership of key policy objectives and the way cross-departmental issues would be managed, the paper was a green light for greater local engagement in economic, societal and environmental development.

In these papers the word 'infrastructure' appears many times but the words 'broadband' or 'telecoms' do not appear - not even once.  The word 'network(s)' appears many times, but only in the context of social, transport, rail, skills and knowledge linkages between people, cities and government departments.  In the more-recent of the two papers (March 2008) the word infrastructure is used 11 times but again the words 'broadband' or 'telecoms' fail to appear.

So here, right at the heart of policy making, we have an uninformed ingrained assumption that telecoms has little or nothing to do with economic, societal or environmental infrastructural development.   No wonder that Lord Carter has such an uphill slog to get air-time for 'Digital Britian' whereas, in the USA, President Obama can so easily (and without contention) urge essential infrastructure investment in 'the digital lines that feed our commerce and bind us together'.

It is, of course, easy to understand the two reasons why this general disregard for the infrastructure quality of local access networks is not yet seen in the UK as a problem. 

Firstly the last generation solution is not yet sufficiently broken to upset large numbers of voters – although the recent revelations in Ofcom’s speed-test reports and the BQS study by Oxford Said Business School have somewhat undermined  the prevalent cosy comfort.  

Secondly, those minority voices who may see and understand the dangers ahead have not yet found the strength and ability to articulate the risks (and opportunities) with sufficient nail-on-the-head clarity. 

It is futile, in this debate, to point out that other countries might be better at managing the issues of access infrastructure investment.  Whilst there are some great, blindingly obvious, transferable clues (like not relying on incumbents to innovate) there are always many contextual differences that allow the ‘Nay-Sayers’, ‘Not-just-yet-Sayers’ or even the ‘We-sort-of-like-the-idea-But-Sayers’ to loftily suggest that our home circumstances wouldn’t (or even shouldn’t) allow the import of dangerously continental fresh thinking. 

As long as folks go on thinking that the only reason for exchanging copper wires with fibre is to achieve some enhancement in transmission speeds – faster downloads from the Internet – then the debate will drift along with classic British overtones of ‘who needs it anyway?’

The case for wholesale replacement of existing access networks rests on delivering benefits that are way beyond just doing, a bit faster, what we can already do.   But here it gets tricky and uncomfortable.

To deliver the benefits that are relevant to individuals, to local communities and local economies, these new access networks require two attributes that are not yet fully recognised in current infrastructure provision and everyday experience. 

Firstly these access utilities have to be locally managed – that is to say they have to meet the needs of the local customers, local communities and physical environments and not simply conform to some lowest-common-denominator of a national plan. This worries people – as if it is impossible to countenance a notion of infrastructure interoperability in combination with the delivery of localised and competitive service diversity.

And that underscores the second attribute – that common Access network utilities should not be confused with the diversity of competitive Services than can be run across them. To some extent, with the functional separation and local loop unbundling imposed on BT, the distinction between Access and Services has been recognised but the full implications are still far from clear in the minds of policy developers.

It is not obvious to casual non-technically-inclined observers that each single fibre can enable users to use multiple service providers to deliver concurrent multiple services – user-selected blends of business and domestic services and local community services with very easy switching between providers and with none of the restrictive marketing practices associated with the last generation’s almost mandatory vertically-integrated sales models.

It is this multiplicity of concurrent usages that makes fibre investment attractive as a utility – a notion that doesn’t register with traditional providers hooked on (a) justifying infrastructure investment from those service revenues that they alone can control and (b) technologies that defend the status quo. 

The size of the market is another important factor.  The take-up of on-line digital services is directly linked to their usefulness, their ease of use, their local relevance.  The fibre to your home could, if managed by a utility alive to local needs, encourage a flowering of innovative services.  There is no shortage of evidence that this happens when that local utility network is managed entirely independently of the major service providers and with local community buy-in – but not yet, alas, in the UK.  Where this has happened the local networks have seen massive growth in local traffic – more local users using more local services. 

As individuals, what we currently experience as on-line services are things that are largely distant rather than local.  We do not have local community TV coverage of the kids football because we have no infrastructure that makes that an easy and affordable possibility.  We do not use our networks to help with neighbourhood baby-sitting or keeping an eye on property on behalf of friends on holiday.  We don’t have video-enabled health check-ups with our local GP’s nurse. 

We do not yet have that whole new service industry that supports local businesses or the delivery of local public services.   We do not have handy access to remote health monitors that would make it easier to look after our aged relatives.   We do not have the up-streaming transmission capacity to send video material as easily as we might receive it.   We do not have video-in TV like phone-in radio.  Neighbourhood Watch is rarely more that a few, hopefully deterrent, signs – a long way short of an actively caring community.  We agonise over the demise of regional news services.  We talk of flexible working but employers know that it’s still safer to serve up the systems in offices than to trust to the vagaries of home network connections – so commuter traffic continues to add to road congestion and air pollution. 

We have barely scratched the surface of how we could use the new access technologies because they are not provided in a form that that is usable and ‘enterprisable’.  We are stuck with an old digital pioneer model of limited functionality that misses the point of mass-market digital take-up – and all because we cannot properly articulate how this could impact on individuals, society and the economy without the expense and logistical challenges of frog-marching investors and policy developers to remote parts of Sweden. 

Maybe it doesn’t matter.   Maybe we can live with unemployment and the emigration of bright people who feel the urge to innovate.  Maybe we can find comfort in being a celebrated  international  case study of lost opportunities.  Maybe we are comfortable when moaning about a lack of community spirit, failures to grasp new investment opportunities, archaic health services or short-falls in quality education, and maybe we can do very well without a whole host of new cultural and creative artistic endeavour.

Or maybe, just maybe, enough people will get sufficiently educated, sufficiently informed, sufficiently angry about being short-changed, to vote for any new local government that shows some sense of enterprise, imagination and care for the economic and societal health of their community.

Meanwhile, chaps, keep up with the guitar practice.

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Parts of this editorial are linked to the CMA's response to the interim Digital Britain report.

See also:

 CMA Manifesto

The Hang-On, Hang-Up Dilemma

This is a shortened version of the 2009 Conference Address adapted for the Parliamentary Information Technology Committee (PITCOM) meeting at the House of Lords on the same day.

CMA Chairman, Carolyn Kimber, said:

My Lords, ladies and Gentlemen: When I gave the Chairman’s address to the CMA’s annual  conference earlier today I had little idea I’d be asked to repeat it so soon. 

We live in interesting times:

• Last week the Council of Ministers met in Prague to discuss the future structure of telecoms  in the EU.  It’s not clear they made much progress.
• Last week, BT’s share price fell to an historic low.
• The growth of broadband take-up has slumped to a relative trickle.
• Some mobile operators are still cautious about any attempt to refarm 2G spectrum.
• The broadcasting sector is in disarray.

Who would be a regulator in such times?  Indeed, who would be a politician in these times ?  Who can steer the UK’s businesses – so dependent on digital network investment  – in these ‘interesting times’ ? 

But, at challenging moments like this, we rise to the occasion.  We find the right people and the right solutions for intractable problems. To quote Ed Richards :  “Governments in this area works in cycles. This is the point in the cycle where you need some urgency - some vision - and some decision-making from government.” 

The interim report on Digital Britain is an example of this process:

• We have a Minister who is a real expert at his business.
• We have a series of visionary proposals.
• We have some new thinking – coming from his office.
• And we have powerful examples from many other European countries to demonstrate the commercial and societal imperatives of investing in what President Obama called: “the digital lines that feed our commerce and bind us together”    

OK.  We know that Lord Carter’s interim report hasn’t been universally welcomed but an interim report is   ……  an interim report. The report has raised as many questions as it’s provided answers.  We are, at best, uncertain about the target of “up to” 2Megs.  We would like to see a commitment to national roaming for basic mobile voice and data calls.  But, at least, we think it reflects what is,or was 4 weeks ago, politically possible. Getting all government departments to buy in to the Digital Britain report was a major achievement in its own right.  It’s a step in the right direction. We also applaud  the revision of government policy on spectrum auctions. 

CMA will contribute to the final version of Digital Britain. We hope many of you will also play your part in deriving and in driving the new policies that UK businesses and citizens need for the next decade.   

The CMA began that process today when we  launched our first-ever Manifesto. It’s packed full of proposals for changes that will benefit British enterprise and, through that, the national economy. The CMA is a national charity, so this manifesto isn’t politically partisan.  We bring to the attention of legislators, of all varieties, what needs to be done to enable British businesses to be at the forefront of international competition.  

Our manifesto is built around five fundamentals. First - the need to address a significant failure in our national ICT policy. Everybody here knows that the structure of government is unavoidably complex. But the structure fails to acknowledge that ICT, like finance, is all important and all pervasive  - again – “the digital lines that feed our commerce and bind us together” . 

This lack of any central remit for ICT policy has an impact that might be compared to

• the lack of centralised financial authority in the Treasury,
• or centralised Energy policy,
• or a focus for environmental issues.
• or any other essential infrastructure. 

ICT policy-making is spread between many departments. It lacks continuity and stability in ministerial appointments. Lord Carter of Barnes has now been appointed as our first-ever Communications Minister.Excellent -  but he reports to two masters.  Responsibility for broadcasting and content is centred on DCMS in Trafagar Square. The technical and economic aspects of telecoms are at the other end of Whitehall in BERR. The physical distance  – maybe a brisk 10 minute walk – stretches across a gulf of non-convergent confusion. 

Activities that really should have been carried out in government have been outsourced to the regulator.  The regulator is becoming visibly under-resourced and over-stretched.   Governments deal in policy and regulators in policing that policy.  If the resources of Ofcom are diverted into policy-making (and, we now hear, into regulating the postal services) there is a vacuum at the top. Further distortion is introduced when we remember that, as an independent regulator, Ofcom isn’t responsible to government at all, but to Parliament. Industry is visibly converging at high speed.

The economy demands a high-speed converged approach to policy-making at the top reaches of government,  It demands a properly resourced, fully independent regulator. It demands a clear division of responsibilities between these two.   Other countries like Japan already have a converged Ministry.  Is it any coincidence that this focus has driven Japan towards a fully-fibred access network ? 

Second in our Manifesto’s fundamentals is the urgent need for a new Comms Act.Two-thirds of the revenues received by the telecoms industry comes from public and private enterprise.  Despite unceasing pressure from CMA over the last 5 years the political and regulatory focus is still on protection of the “citizen-consumer” rather than recognising, or even understanding, the needs of the business user.  Ofcom is belatedly recognising the problem and is trying, albeit far too slowly, to do something about it.  But the culprit, -  the Communications Act 2003 – doesn’t give Ofcom much leeway.

The Act fails to recognise the significant differences between Granny Jones and UKplc.The needs of big businesses were excluded from the present Act because politicians believed that big business was well able to look after itself and that the primary duty of the legislation was to protect the citizen-consumer.  Events over the past five years show that there are many very real differences between the needs of domestic and business consumers; and the concerted lobbying power of the suppliers far outweighs anything that their business customers can bring to bear.  We need fair recognition of the interdepencies between citizens and the needs of commerce – again – “the digital lines that feed our commerce and bind us together”.  

The 2003 Act has failed UKplc.  If a new Act is not being being prepared then it is urgently overdue.  The next version should place a legal duty on Ofcom to address the needs of enterprise users in its consultations and decisions. 

The third of our Manifesto fundamentals is the need of UKplc for next generation broadband access networks to reach every part of the country. Five years ago, Lord Currie, in his speech to the CMA’s 2004 conference, didn’t pull any punches on this issue.  I quote: “as a Nation we have set ourselves a target for the roll-out of ‘broadband’ without having the physical infrastructure for a true broadband access network in place. We can stretch the POTS to being a mid-band network. And DSL is that ‘stretch’ on copper wire. But true broadband it ain’t. ….  it is not the major, life-changing experience that broadband should be.” End of quote. 

Lord Currie resisted any wishful thinking for state intervention.  He called for progress towards 10Megs through competition. Successive reports from the Broadband Stakeholders Group, from Francesco Caio, and now, at long last, from Digital Britain, have all echoed Lord Currie’s 2004 thinking.  Dithering is not an option - we must do something about it.

Do we see any encouraging signs?  Ofcom has announced that BT will be allowed to make a reasonable return on investment in VDSL.  Ofcom has also said that it is tearing up – sorry – adjusting – its previous dogmatic dedication to free-market auctions for spectrum.  Efficient market theory seems to be increasingly recognised as a deficient market theory. 

But universal broadband access isn’t enough, by itself, to guarantee our future.  Unless effective policies are in place to prevent anti-competitive restrictions on the use of the new networks, we could face a return to a monopoly, in both infrastructure and services. 

Our fourth fundamental is in the Manifesto because we’re thoroughly fed up with the inadequate coverage provided by the existing GSM networks.  3G coverage is even worse.We recognise that recovery and reallocation of the 2G spectrum to 3G services is going ahead, but we are not convinced that national coverage will be improved. 

Last week Ofcom announced that the 3G operators have all met their coverage requirements imposed as part of the auction process.  Job done?    I don’t think so. The implication is a bit like saying we have 100% broadband -  so not a not-spot in sight? We are demanding roaming of basic services between national operators. 

We challenge Ofcom’s allegation that this will reduce competition.  If Digital Britain recommendations are to mean anything in practice, this is the minimum condition that must be imposed on the MNOs who, on the face of it,  enjoy a sort of collective Significant Market Power in the UK market   

For our fifth and final fundamental, we seek reassurance from government that it will, over the next five years, actively encourage  the European Commission in its pursuit of a clear roadmap, complete with milestones and targets, towards a single market in ICT goods and services across all 27 Member States. 

So, to summarise, our manifesto says:

• Address the need for converged, ICT policy making at the top of government;
• Bring forward new or revised legislation and place a responsibility on the regulator to address the full needs of UK plc;
• Adopt, without delay, a national policy aimed at the provision of a universal broadband access infrastructure to which all service providers have open access unconstrained by technical architectures;
• Ensure real, effective and sustainable competition in the supply of telecommunications goods and services;
• Promote a mobile communications network that provides better than 95% geographical coverage and allows roaming of basic services between national operators.
• Pursue a Single Market in telecommunication goods and services across and within all 27 Member States of the European Union, based on a harmonised and rationalised system of sector-specific regulation and competition law.

 My lords Ladies and Gentlemen, there’s more in our manifesto than I’ve been able to cover tonight.  The common ground is that we all need to see  greater infrastructure investment in the digital lines that feed our commerce and bind us together” 

It’s a very simple but powerful line - but remember that when President Obama used those words in his inuagural address he linked it with several areas of basic infrastructure investment.  We ask of government only that they do not, inadvertently let go of something that they might not yet have fully grasped. 

Please take away this basic idea.  Broadband access is a basic utility and quite distinct from the array of competitive services that can be delivered through those digital lines that feed our commerce and bind us together. 

Thanks again for the opportunity to speak here tonight.

 [transcript ends]

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