The Transparency Challenge: Google’s Strength Becomes A Weakness
Google, The Chancellor and HMRC have been wrong-footed by the Corporation Tax issue. What is the real significance of the tax debate and who should be saying what in order to rebuild credibility…
- The Corporate Message:
The message Google wants to send is that they comply with complex tax rules. But if the rules do not generate a level of tax that seems commensurate with profits, then the authorities are at fault, not company executives. This is a good point. It has not been well made.
The company is failing to define the debate on the big stage and now the smaller stage at Westminster. Google needs to be more discerning about the messengers and their message. The Exec’s Matt Brittin and Tom Hutchinson failed to give the media a positive story. Instead, their appreance/ performances will have reinforced recurring negatives about the Google brand: it is remote, arrogant and out-of-touch. Which is compounded by the inconsistency of wanting the world to be more transparent, but struggling to communicate the value of transparency, or how it applies to them.
Why is this important? Their behaviours are draining goodwill from the brand. Google (or Alphabet’s) ability to expand beyond ‘search’ — into new consumer facing brands and businesses — will be undermined if they cannot connect with consumers. The key communications challenge is tough, but simple: demonstrate much greater empathy and make a virtue of transparency. Tax is (was) a good opportunity to do so. They have flunked it.
2. Government Message:
George Osborne wants to be the friend of Big Tech and win plaudits for standing up to Big Tech. Triangulation is a neat trick. It has not worked for him on this occasion. Team Osborne misjudged the public mood and media reaction.
Governments, like big brands, needs to manage the ‘empathy gap’. Key to which is connecting with the expectations and values of voters. Unlike Google Execs, the Chancellor seems to better understand this challenge and its significance. To do so however, required the polar opposite response, to his positive Tweet (on 23rd January.)
Expect Osborne to address this mishap at the Budget if not beforehand. He will want to display his famed populist touch and underline his favoured themes about us ‘all being in this together’ and ‘One Nation’ government. It is critical for Osborne to be seen to challenge big business if the Party wants to advance their audacious goal to realign British politics (and make a successful land grab for Labour’s working vote.) This agenda is complicated by the need for business support in both the forthcoming EU referendum and ongoing investment in the UK.
3. Multi-National Message.
The core issue for companies to manage is the ‘t’ word, not ‘tax’, but ‘transparency’.
Expectations of all stakeholders are increasing. They want to be able to examine how politicians and providers of key goods and services operate. Google has driven this debate. Their services are used to facilitate greater scrutiny and openness.
Institutions that resist the trend towards greater transparency will find that their reputations and customer relations will suffer. The reverse is also the case: companies that lead the transparency agenda — marrying principle and practice — will be rewarded by politcians and consumers. Transparency is one of the most compelling leadership platforms of the decade.
4. Managing Your Brand Appearance.
i.Know Your Spokespeople: If the Board is absent a natural communicator, look beyond the Board. Google’s Execs in Europe undoubtedly have strengths, however, they may not be the best ambassadors for the business.
ii.Know Your Audience: Be clear to whom you are speaking. Google struggled to articulate a compelling message for the room, or the broader audience. In that setting, it is critical to think about the impact of your performance not only on the MPs but editors and viewers.
iii.Know Your Message: Prep the details and prep the soundbite. Google’s Execs were found wanting. And in some instances, prep the appearance. Former Serco CEO, Paul Buckle, discovered how leaders personify brands to his cost, when he tried to explain a staffing debacle ahead of the London 2012 Olympics. His striking mullet-like hairstyle triggered greater (unwanted) attention and seemed to reinforce a feeling that he, like the company, may not be entirely suited for the job.