Questionable corporate ethics have long been a cause of many an organisational crises. The traditional types of wrong doing or sharp practice are quite familiar to us. But there is now a new area crises are arising from as a result of increasing advances in technology.
For years I have been meaning to read a book called Flash Boys by Michael Lewis. Lewis is one of the few authors who can make a rattling good yarn out of the workings of the global financial markets. Having a background in financial communications I love to read his stuff. “Flash Boys” published in 2014 tells the story of the rise of High Frequency Traders. In simple terms HFTs are people and banks using superfast technology to trade shares and other financial assets. The technology, algorithms in particular, that these organisations have developed enable them to dip in and out of the financial markets so quickly that essentially they can beat others seeking to trade. In the book Lewis tells of how other experienced traders would see on their screens a given price to buy and sell say shares in Apple but when they pressed the button for that price it would disappear. This is because they had been beaten to it by faster technology alerted by their interest and therefore forcing them to pay more. If old hands were being beaten in this way what about the ordinary man or woman on the street trying to maximise their savings and what ethical issues does this raise? It’s proving to be a real challenge for financial regulators.
Fast forward a few years and we see how similar clever technology has created yet another crisis for Uber. A recent article in the New York Times detailed how Uber had constructed computer algorithms to beat law enforcement agencies in towns and cities where it had failed to get a licence to operate. Basically, this technology, called Greyball by the Uber software developers, enabled to cab company to detect when a law enforcement official such as from the local police or government was seeking to book one of its cabs chiefly to prove Uber was operating without having a licence. Using a number of ‘rules’ such as was the credit card used to open the Uber account issued by a law enforcement body; did the customer open and close the app frequently near government offices; the type of mobile being used (some public officials were using easily identifiable cheap models for the purpose of entrapping Uber) and so on Uber was able to in effect stop any of its cabs being ordered where technically they should not have been operating. Greyballed officials would see in effect phantom cabs that never came or no cabs at all.
We are seeing a pattern here. Remember Volkswagen’s use of “cheat devices”? The VW crisis had at its roots requirements that new vehicles have to meet ever stricter standards on emissions for pollutants. VW knew that emissions testing was done in laboratories not on the open roads. So using that knowledge they were able to create software that detected a laboratory test was in process from a range of pieces of information from the steering, accelerator and brakes. The software would then revise the engine settings to minimise levels of nitrogen oxide being released during the test. As we now know, on the open road, nitrogen oxide emissions from these VW cars could be 35 times higher than under these “fixed” laboratory tests. Up to 11 million vehicles made from 2009 onwards may be affected. Again clever technology creating a real crisis.
As we know the best managed crisis is the one that never occurs. As PR professionals it might be worth spending some time with the super-bright men and women in software development. Clever technology can have some very nasty consequences for corporate reputation.