A New Crackdown on Tech

The United Kingdom’s political class may be hopelessly divided on separating from the European Union, but they are surprisingly in agreement on another controversial subject: regulating technology companies.

In the same week the UK government had its Brexit deadline extend through October, it proposed new regulations aimed at combating online abuse, extremism, and fake news. The proposals come with potentially harsh penalties for violations, including personal liability for senior executives and entire bans for some services. It comes in tandem with similar efforts from a host of other governments around the world and follows in the wake of a recent massacre that was livestreamed over the internet, an event that horrified the world.

No company likes to get stuck with new regulations, but the terror of recent events means these rules have a high probability of getting passed. That means executives need to get ready for the coming changes and show the government that they are committed partners in the process. “Show that your goals are aligned with the regulations and then communicate that to the customers and the government,” says Mary Macleod, a Korn Ferry senior client partner and head of the firm’s Government and Public Enterprise practice in London. “The best companies are already doing that,” she says. Facebook CEO Mark Zuckerberg recently made statements supporting more regulation.

The likely changes in the UK also means that companies that historically enjoyed a mostly laissez-faire environment will now have to deal with possibly heavy government oversight. Experts say that may require employees to have a different mentality and skill set as compared to the past. Failure to recognize this change could lead to big problems. “You cannot superimpose how you do business in the commercial sector onto how you do business with the government,” says Robert McHale, a senior client partner of Korn Ferry’s Professional Services and Technology practice. “You can’t, or it will lead to frustration.”

McHale notes that in the private sector, leaders may be able to cut a business deal over lunch, but strict rules are designed to prevent that when executives interact with the government. “They want to avoid any sign of impropriety and make sure the contracts are free from bribery or corruption,” he says. That means the way business gets won is different, and the rules must be followed.

Employees dealing with the government will likely need to be a lot more disciplined and process- and detail-oriented than those who are used to the freewheeling start-up culture, McHale says. “The rules are the rules, and you have to work within them,” he says.

A double helping of patience could also be a useful asset in employees. “You must have executives who will take the long view,” says McHale, noting that it may be possible to tweak the regulations over time. “That’s the only way you will get relief,” he says. Again, that means working within the established business-government systems and may require skilled government relations staff rather than innovators. “Creativity and entrepreneurialism and outside-the-box thinking, when taken to the extreme, will lead you to the penalty box,” he says.

If a firm doesn’t run afoul of the rules, then it should still brace for a harsh reaction. Government regulators have already responded robustly to perceived infractions of other laws, with fines totaling in the billions for some technology firms. “The penalties that are being dished out for people ignoring the government have been ruthless,” says Hans-Georg von Lewinski, a senior client partner for Korn Ferry in London.