Rule By Telephone Sanitizers

A busy Tuesday precluded me from posting anything about this Harvard Business Review essay (hat tip to Robyn Weisman) asking a deep, sad, and entirely relevant question: when do regulators become more important than customers?

While working with a huge Russian hydrocarbon company in Texas last year, our innovation conversation quickly zeroed in on customers. Who was the energy giant’s most important customer? Which customer had the biggest impact on new value creation? What customer would matter most in five years?

The wide-ranging English/Russian debate raged for 20 minutes. Then one of the engineering executives, a fracking enthusiast and unconventional extraction technologies champion, spoke up. The answer, he declared, was now obvious. The company’s most important customer — by far — was Russia’s government. Strategic success required pleasing Vladimir Putin’s Kremlin.

The room went quiet. That single comment rebooted the entire discussion. No one disagreed. The innovation roadmap was hauled out and reviewed less in the spotlight of global opportunities than the cold reflection of domestic politics. State satisfaction mattered more than market disruption.

"Your most important customers", Michael Schrage goes on, "may not be the people who buy your products but the ones who regulate your company and industry." And the world is filled with people all but sure they need to inflict their vision on your company, both from without — and from within e.g. Emma Watson, whose heart's desire is to add another layer of telephone sanitizers. That such people desperately need to be fired should be trivially obvious. The Constitution as written was engineered to prevent the proliferation of dickless meddlers, but the modern regulatory state is a kind of agar, and we all are in the Petri dish.