Leaders with Hot Pants

I am struck this morning with the coincidence of three items in the Globe and Mail’s Report on Business. There is the report on Keurig’s response to the pending lawsuit alleging anti-competitive practices brought by Coffee Club. [Disclosure: In 2011, I did a culture change engagement for a fee at Green Mountain Coffee Roaster’s Toronto plant. GMCR is the parent company of Keurig.] There is the item on Canada’s Competition Bureau looking into alleged restrictive trade practices at Loblaw. And finally, there is the piece on Telus joining BCE in its challenge to Rogers’s exclusive provision of NHL hockey content to its own subscribers contrary to “the CRTC’s vertical integration rules, which require companies that both create and distribute media content to offer it to their rivals to distribute as well.”

In each of these cases, senior leaders from the respective organizations respond with a trite, deflective response that sidesteps the issue at hand. Moreover, the response attempts to justify the behaviour being called into question. For example, Stéphane Glorieux, president of Keurig Green Mountain Coffee Inc.’s Canadian and U.K. divisions,

likened Keurig’s stated incompatibility with rival coffee to apps made to run on Apple Inc.’s phones and tablets. “When you play with an app, you have to go through a platform called Apple. So it’s a little bit of the same principle. That’s how we view ourselves so that we can control our quality,” he said.

What nonsense! The issue here is that Keurig includes an interconnect mechanism that prevents non-Keurig K-cup coffee pods from being used in the new series of Keurig machines. So, it’s not quite the same as Apple managing the App Store for new applications to control quality. Rather, it’s like a car manufacturer insisting that only its brand of gasoline can be used to fuel its vehicles and including a technological lock to prevent you using any other product. Or, to bring things back to the kitchen, it’s akin to a toaster manufacturer insisting that you buy only its proprietary bread to use in its toasters, so that the manufacturer can control the quality of the toast. (Note to M. Glorieux: Have a look at Chamberlain v. Skylink in the U.S. Federal Court)

In Loblaw’s case, the Competition Bureau is seeking access to supplier contracts from a dozen major grocery suppliers “searching for information about potential “reprisals or repercussions” from Loblaw” including requirements that suppliers financially compensate Loblaw if a Loblaw competitor offers the supplier’s products on special and Loblaw chooses to price match, among other similar allegations. Loblaw’s response? “Loblaw spokesman Kevin Groh said … Loblaw doesn’t believe its “practices are inconsistent with a competitive market.””

Finally, over at Rogers, the now-owner of NHL Hockey broadcast rights streams hockey content to anyone’s Internet-connected devices, irrespective of supplier. However, it makes its proprietary GamePlus app available exclusively to Rogers’s customers, allegedly creating a vertical integration that requires die-hard hockey fans to subscribe to Roger’s service for a full online experience, including a much touted “ref cam.” As Telus joins BCE in launching the complaint to the CRTC, Rogers’s rather telling, if not childish, response is to refer to BCE as a “crybaby” and minimizing the impact on customers of this decision: “we don’t believe we transgressed any rules and we will continue to focus on delivering innovation for consumers and not fighting little petty fights such as this.””

The commonality of these three news items for me is how they demonstrate the response of imperious leaders who defiantly place themselves above what a reasonable and objective observer would deem as fair play, and minimize or ridicule those who would call them on what the common person would consider aggressive and anti-competitive behaviours. Unless these individuals have a greater degree of psychopathy than usually found in minimally dark triad leaders, they cannot, in their heart-of-hearts, truly believe the responses they spout publicly—responses that are clearly disconnected from market realities. To say that their proverbial pants are on fire might be going to far. But warm to the touch?...

Members of organizations look to their organizational leaders for tacit guidance on what is acceptable and expected behaviour, especially with respect to getting ahead in the organization. Irrespective of the espoused values that may be laminated or bronzed and hanging in the lobby, it is the in-use practices to which people pay attention. No one should be surprised when members of Keurig, Loblaw, and Rogers – who see their leaders skirt ethical behaviours and the truth in order to promote the ends of their companies – do the same. What those quoted in the Globe articles are providing is not leadership, or at least the type of leadership that is consistent with the complex demands of the 21st century.