The hedge-fund manager has offered a fable for why the West should confront Putin... Since the Magnitsky Act passed, the Russian government has charged Browder with myriad crimes, and has periodically tried to lodge warrants for his arrest via Interpol. “Their main objective is to get me back to Russia,” Browder has said. “And they only have to get lucky once. I have to be lucky every time.”.. In 2012, in Surrey, England, Alexander Perepilichny, one of Browder’s chief sources of information on the movement of the stolen funds, collapsed while jogging near his home and died. The case is still under investigation. Browder, who has taken to relating to as large an audience as possible the danger he faces, has called this “a perfect example of why you don’t want to be an anonymous guy who drops dead.”.. Browder, who is fifty-four, with a dusting of silver hair and rimless eyeglasses, has a forceful yet understated authority and a talent for telling a coolly suspenseful tale... As an anti-corruption activist, Browder has spoken out against the exploitation of offshore tax havens—for example, the ones detailed in the documents that were leaked from the Panamanian law firm Mossack Fonseca, in 2016. Many companies listed in the so-called Panama Papers were entirely legal. Still, Browder tends not to mention that Mossack Fonseca set up at least three firms for him and Hermitage... His singling out of Browder in Helsinki, McFaul told me, “only gives Bill a bigger global platform—it was a huge public-relations coup, which of course Bill will use.”.. His grandfather Earl Browder became active in socialist politics during the First World War and lived in the Soviet Union for five years before becoming the secretary-general of the Communist Party of America. Earl’s son Felix was a noted mathematician. William Browder took an interest in business while in boarding school in the seventies. “I would put on a suit and tie and become a capitalist. Nothing would piss my family off more than that,” he writes in “Red Notice.”.. This was the peak of the chaotic post-Soviet “Wild East,” a time of lawlessness and speculation. Over the next two years, Hermitage’s portfolio grew to more than a billion dollars, but it was nearly wiped out in August, 1998, when Russia defaulted on its sovereign debt, causing widespread panic. Browder was one of the few Western financiers who chose to remain in the country. Between 1998 and 2005, the price of oil quadrupled and the Russian stock index went up by nearly three thousand per cent... Browder gained attention for publicly criticizing the management of companies in which his fund had invested as a minority shareholder, in an effort to goad them into being more efficient and transparent. He held combative press conferences outlining Russian corporate malpractice and passed along to journalists dossiers that described the way venal oligarchs engaged in asset stripping, wasteful spending, and share dilutions.
.. “I don’t think Bill started out with a passion for corporate governance. He found it to be an instrument that helped him and his investors make a lot of money. Ultimately, it became a sincere crusade.”
.. Steven Dashevsky, then the head of research at a Russian investment bank, Browder’s anti-corruption stance was a kind of “free marketing” for Hermitage.
.. Regulators had instituted a dual price structure for the company’s shares: one class of shares, priced relatively cheaply, could be held only by Russian citizens and firms; the second class, priced much higher, could be purchased by anyone. Hermitage got the cheaper price by buying Gazprom stock through companies it registered in Russia. It was a work-around used by a number of Moscow-based investment funds that, as Dashevsky put it to me, “fell into a gray zone: it was clearly against the spirit of the law, but never prosecuted or pursued.”
.. Browder also minimized how much Hermitage paid in Russian taxes. The government, in an effort to stimulate regional investment, had established a special zone in Kalmykia, a republic north of the Caucasus, that offered a lower tax rate. The rate went down even more if disabled workers made up a majority of a company’s employees. To take advantage of this, Hermitage hired disabled people for its companies in Kalmykia. A banker who managed a number of Russian funds said, “We’re not generally disciples of Mother Teresa, but Bill was singularly bottom-line focussed.” Other investors, the banker said, considered tax-avoidance measures like Hermitage’s hiring of disabled people “too risky, and borderline illegal, with the possibility of too much danger if revealed.”
.. Browder received a British passport in 1998 and, rather than become a dual citizen, renounced his U.S. citizenship. He has explained that he had been motivated by the discrimination that his grandparents faced in America during the McCarthy era as a result of their political activism for the Communist Party: his grandfather was forced to testify in front of the House Un-American Activities Committee, and his grandmother was threatened with deportation to Russia. “This type of thing could never happen in Britain, and that was the basis of my decision to become British,” he recently told an audience in Colorado. But those I talked to who knew Browder in the nineties assumed that the reasons were financial
.. “If there has been a consistent passion in Bill’s life over the last twenty or thirty years, it is not wanting to pay taxes.”
.. Vladimir Putin assumed the Presidency in 2000, and at first Browder was an ardent supporter
.. In 2003, when the billionaire head of the Yukos oil company, Mikhail Khodorkovsky, was arrested and charged for fraud and tax evasion, many saw it as evidence that Putin was becoming uncompromisingly authoritarian. But Browder welcomed the prosecution of Khodorkovsky, with whom he had clashed in the past. In 2004, he told the Times, “We want an authoritarian—one who is exercising authority over mafia and oligarchs.” He added that Putin “has turned out to be my biggest ally in Russia.”
.. He was told that his Russian visa had been annulled on national-security grounds.
.. “Logic dictates that it’s not in the national interest to ban the biggest investor in Russia and one of the biggest supporters of the government’s policy.”
.. In July, 2006, Putin was asked at a press conference about Browder. Putin said that he didn’t know the particulars of the case, but added, “I can imagine this person has broken the laws of our country, and if others do the same we’ll refuse them entry, too.” Browder instructed his Hermitage colleagues to sell off the firm’s Russian assets and moved key staff to London.
.. Actually, Magnitsky, then thirty-five, was a tax adviser who worked for the firm that had advised Hermitage for a decade.
.. police had used the impounded seals and stamps to reregister Hermitage’s companies in the name of low-level criminals, and those companies then applied for tax refunds totalling two hundred and thirty million dollars, the amount that Hermitage had paid in capital-gains tax. Two state tax offices in Moscow appeared to have approved the refunds the next day.
.. Magnitsky testified to Russian state investigators in June, 2008, after which his lawyer advised him to leave the country. He refused, and gave further testimony that October. Several weeks later, he was arrested on charges of abetting tax evasion through Hermitage, and held in pretrial detention.
.. In 2010, Browder went to Washington with a list of Russian officials he said were to blame. The Obama Administration placed sanctions on some of them, a routine procedure that barred them from entering the United States. McFaul, then in charge of Russia policy at the National Security Council, recalls, “Bill, to his credit, said, ‘That’s not enough. You didn’t make it public. You didn’t seize any assets.’ ” In “Red Notice,” Browder calls the Russia policy of the Obama Administration at the time “appeasement.”
.. “But what was unique here was Bill Browder,” he said—in particular, Browder’s ability to tell the story of Magnitsky’s suffering. “We were as outraged as he was,”
.. Browder gave testimony, said, “I think it boils down to one phrase I heard him use numerous times: ‘They killed my guy.’ He feels a responsibility and obligation to make sure Sergei didn’t die in vain, and it’s hard to argue with that.”
.. Even so, the Magnitsky Act might have languished had it not been for the fact that, in 2012, Russia was about to become a member of the World Trade Organization. In order to grant Russia what the group calls “permanent normal trade relations” status, Congress would have to repeal the Jackson-Vanik amendment, a 1975 measure aimed at the Soviet Union that penalized trade with countries that had restrictive emigration policies. Legislators did not want to rescind the law without sending the Kremlin a message about American toughness on human rights.
.. “the real question was whether Congress and the White House could find any substitute for Jackson-Vanik other than Magnitsky. The answer turned out to be no, they couldn’t.”
.. “It means his krysha doesn’t work,” Celeste Wallander explained. Krysha is Russian for “roof,” and in criminal jargon means the protection that a powerful figure can offer others. “It screws up his social contract with those inside the system,” she said.
.. But Canada, the Baltic states, and the U.K. have passed their own Magnitsky-style bills, and, last year, Congress passed the Global Magnitsky Act, which targets human-rights abusers worldwide. McFaul told me it had long struck him that “the spectre of the Magnitsky law and the noise around it are much more important than the law itself.”
.. The main evidence that the law is having an effect is how obsessed Putin is with it. I don’t get why he’s so obsessed, but the fact remains that he is, and that suggests it’s had a tremendous impact.
.. I met Veselnitskaya last fall in Moscow, at a café in the center of town; she is an imposing, glamorous woman with an exhaustive memory for dates and facts. She doesn’t speak English, is not licensed to practice law in New York, and, at the time the charges were filed, had never been to the United States.
.. She and the Baker Hostetler lawyers wanted Browder deposed as part of pretrial discovery. This would require a court subpoena; Browder had not voluntarily agreed to testify and, having given up his U.S. citizenship, was not immediately liable to the jurisdiction of a U.S. court.
.. According to multiple sources familiar with the Katsyv family’s legal strategy, the legal work on the Prevezon case and Veselnitskaya’s related lobbying carried costs of up to forty million dollars—a vast sum, considering that the U.S. government was trying to seize, at most, fourteen million dollars’ worth of property.
.. Veselnitskaya downplayed any ties she had to Yuri Chaika, Russia’s general prosecutor, but a researcher on the Prevezon case told me that she often took his calls.
Back then, when we were in the engine room, we all knew that one of the by-products of misguided Agile software development was an increase in technical debt. That to deliver working software at speed, we traded off reuse and generated some level of fragmentation. This sort of waste was acceptable as we worked to prioritise responsiveness over efficiency.
We knew that we had to stop and clean up on an ongoing basis. The technical term for this technique is called refactoring
.. As we matured, we started differentiating between efficiency and effectiveness. We realised that our focus on velocity was killing agility, that technical discipline is necessary to enable and maintain responsiveness.
..There are attempts to aggregate initiatives into roadmaps, evolve the strategy based on insights, and enable better innovation accounting, but if you go through the literature available, the focus is on the process, not the customer.
Andrew Ng warns us that as we move from the Internet Era to the Artificial Intelligence Era, we will likely need to shift our approach radically. In the internet Era, we focused on AB testing, on short cycle times, and on pushing decision making to engineers and product managers. Sounds familiar? It should, these are all linchpins of Agile.
.. When it comes to codifying and envisioning what enterprise/business agility looks like, the Agile movement is falling short of expectations. In parallel, the digital agencies and consulting firms that are stepping into this white space, lack the independence to pull it off successfully no matter how many articles are published in the Harvard Business Review.
.. The companies that were once known for exceptional product design innovation, fail to recognise until it is too late that they are losing their most loyal customers because they neglect to design the experience ecosystem thoughtfully. I decided to use a hardware example to represent best the fragmented experiences customers endure when interacting with the Enterprise. Yes, I’m looking at you Apple, the dongle company.
.. The enterprise found itself owning a multitude of disconnected platforms, solutions, and products. Quality, security, and privacy suffered as the years of decentralised velocity at the edges generated a bloated, complicated, disconnected, and unmanageable digital ecosystem.
.. there was a well-intentioned and healthy tension between effectiveness and responsiveness. A tension we should not shy away from because, as Jim Highsmith framed it many years ago, adaptive leaders understand they must ride the paradox between these two forces.
.. This time, code refactoring wouldn’t save us, what we needed, spoiler alert, was customer-centred, organisational refactoring at scale. And refactoring did occur, in the form of backlash against fragmentation, waste and the following flavour of “agility”, “Why do I need to write a story and wait for a programmer to add some content on the website?”. Why indeed!
THE CUSTOMER EXPERIENCE ERA
.. The darlings of the Gartner Quadrants and Forrester Waves announced that we were now in the Age of Customer Experience
.. they witness velocity killing both agility and their work-life balance.
.. The CIO and the Agile and Lean communities shifted their attention from products to platforms. They refactored architectures to become evolutionary. The epicentre of this mammoth effort was still centred around APIs, technology and operations in service of the business strategy. The focus wasn’t on the customer’s experience.
THE CUSTOMER-CENTRED INTELLIGENCE ERA?
.. The commoditisation of technology and the digitisation of the world helped us to get closer to the customer; in some cases, with analytics and programmatic, we managed to get too close without ever considering their experience and trust. We managed to get close to the customer without being customer-oriented.
Frankly, it was not that astonishing when the news broke of the 87 million Facebook users affected by Cambridge analytica’s election meddling. Or was it election advertising? For some of us, it was an expected and inevitable outcome.
.. Perhaps, the current crisis in customer trust will finally propel us into a true experience age — Intelligent, personal, relentlessly relevant, connected, dynamic, and consensual experiences. What Prophet describes as living and breathing brand systems with the ability to learn and evolve at scale. The goal has always been to continuously respond to customer needs, right?
.. In Agile management, there is no such thing as an “internal customer.” The only purpose of work is the ultimate customer or end-user. Under the Law of the Customer, the original producers not only meet the needs the internal customers: they are given a clear line of sight as to what value is being provided for the ultimate customer. Satisfying so-called internal customers is merely feeding the bureaucratic beast. It is a pretend-version of Agile.
Act 15. How Do We Get There?
- Ask the right (human-centred) questions.
- Design Led. Agile Enabled.
- Transformational, Visionary Leadership.When companies get where they’re sort of living by so-called making the numbers, they do a lot of things that are really counter to the long-term interest of the business.
.. Business Agility is the ability to achieve sustained business growth by responding to customer needs. If you are not focused on gaining a deep understanding of your customer and on delivering exceptional experiences, you can’t be responsive, neither can you assure their privacy, security and safety. If you have all that but lack operating model agility you are not a responsive business.
.. Technology must no longer serve the business; the business must no longer serve the business. If we are shifting the focus of the Enterprise from looking inwards to the needs of their customers and hopefully also to the benefit of their ecosystem and society — if we accept that this is the formula for long-lasting Business growth and sustainability — then it’s time to look beyond Agile.
Sean Hannity describes Alexandria Ocasio-Cortez’s platform as scary
Whatever Mark Zuckerberg says about human community or his legacy, his company is acting in its own interests—and against the public good.
Facebook’s crushing blow to independent media arrived last fall in Slovakia, Cambodia, Guatemala, and three other nations.The social giant removed stories by these publishers from users’ news feeds, hiding them in a new, hard-to-find stream. These independent publishers reported that they lost as much as 80 percent of their audience during this experiment.Facebook doesn’t care. At least, it usually seems that way… the company is now going ahead with similar changes to its news feed globally. These changes will likely de-prioritize stories from professional publishers, and instead favor dispatches published by a user’s friends and family. .. Many American news organizations will see the sharp traffic declines their brethren in other nations experienced last year—unless they pay Facebook to include their stories in readers’ feeds.
.. People say they’re interested in a broad range of news from different political preferences, but Facebook knows they really want angry, outraged articles that confirm political prejudices... Publishers in Slovakia and in the United States may warn of damage to democracy if Facebook readers receive less news, but Facebook knows people will be perfectly happy—perfectly engaged—with more posts from friends and families instead... I pledge to go to the gym more in 2018, but every morning when I wake up, my partner presents me with a plate of donuts and urges me to stay in bed and eat them. My revealed preferences show that I’m more interested in eating donuts than in exercising. But it’s pretty perverse that my partner is working to give me what I really crave, ignoring what I’ve clearly stated I aspire to... When people choose to subscribe to reliable news sources, they’re asking to go to the gym. With these newsfeed changes, Facebook threw out your gym shoes and subscribed you to a donut delivery service. Why do 2 billion people put up with a service that patronizingly reminds them that it’s designed for their well being, while it studiously ignores our stated preferences?.. I think the only way Facebook will listen to people’s expressed preferences is if people start building better alternatives... Right now, Facebook chooses what stories should top your news feed, optimizing for “engagement” and “time well spent.”..Instead of telling Facebook what it should do, people should build tools that let them view the world the way they choose. If regulators force Facebook and other platforms to police news quality, they’ll give more control to a platform that’s already demonstrated its disinterest editorial judgment. A better path would be to force all platforms to adopt two simple rules:
- Users own their own data, including the content they create and the web of relationships they’ve built online. And they can take this data with them from one platform to another, or delete it from an existing platform.
- Users can view platforms like Facebook through an aggregator, a tool that lets you read social media through your own filters, like Gobo... it either needs to learn to listen to its users stated desires, or it needs to make room for platforms that do.