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Case histories of failure by strategic omission

Canadian Broadcasting Corporation
Beginning in the 1970s, the Canadian Broadcasting Corporation began to seriously lose traction in the Canadian broadcasting structure. New private stations were licensed, cable was increasing the impact of American programming, and the spectrum was becoming fragmented by multiple channels.  The BBC had responded vigorously to a somewhat similar challenge in Great Britain, by successfully campaigning for a second channel.  Only belatedly, however, did the CBC propose a second channel, a proposal which failed. Subsequently, although specialty channel CBC Newsworld was licensed, drawing on a cable charge, the CBC’s public appropriation declined in inflation-adjusted dollars and, with growing fragmentation, the CBC’s share of television viewers plummeted. The CBC’s efforts to be given some of the new specialty channel licences also failed.

There were three strategic omissions behind this decline. The first was the failure to fight earlier for a second television channel, following the BBC’s example.

The second omission was the CBC's failure to take on the Canadian Radio-Television Commisssion, which was licensing the new private stations. These new stations depended on American programming and routinely broke their licensing promises. In terms of the Broadcasting Act, their licensing was both disastrous and foolish. Had the CBC challenged the CRTC’s modus operandi – not to mention its hypocrisy, evasions and ineptitude (see Closed Circuits) – the logic of financing new Canadian television publicly would have been more apparent.

The most critical failure, however, was in leaving the erroneous impression, unchallenged, that commercial financing of television didn’t cost anything whereas public financing did. In this context, any expansion of the CBC would cost the taxpayers dear, whereas the funding of new private stations by the sale of commercials seemed to just happen and was taken to be free. What followed – the CBC’s not having funding for expansion while private stations proliferated – was inevitable.

In reality, the funding of television by commercials not only ultimately comes out of our pockets, but also has extraordinarily high overheads (commercial production costs, agency commissions, air-time sales commissions and so on). Funding by public appropriation, on the other hand, has none of these overheads and hence is much more efficient. The commercials themselves are also objectionable for a whole host of reasons, many quite profound: Brand-name advertising is a pervasive, intrusive, one-way propaganda system in the classic sense.

In not making the broad-gauged argument for public, non-commercial financing of television and the converse, that commercial financing is both extraordinarily expensive and undesirable, the CBC was doomed to fall behind and to decline.

Federal New Democratic Party
It would be hard to find a case of strategic ineptness more telling than the
CBC. There is, though, such a case: the federal New Democratic Party.

Regardless of leader – whether charismatic or pedestrian – and regardless of whether it has a hefty campaign budget or not, the federal NDP continues to
be a third party Canada and a fourth party (in number of seats) in the House of Commons. Come election time, the call goes out to party members and supporters, organizers spread out into the field, enthusiasm mounts, donations roll in, polling is done, a communications strategy is devised with great care, campaign advertising is produced with the utmost of professionalism, the leader masters one-liners and media ops, and candidates of no small intelligence and considerable energy give it their best.....and the result is always much the same, within a range. The party never does better than 20 per cent. In the last five elections, 17.5 per cent was as high as it managed. This happens even though polls might show the issues most on the public’s mind, like health care, might also be issues where the NDP is strong. Hope being eternal, the NDP looks on each election outcome as an aberration or a combination of unfortunate circumstances. Rationalizations abound. If only they can avoid being sandbagged by circumstances the next time, goes the thinking, or if they just try harder, or if the party’s advertising is just a little more skilful, there will be a breakthrough. There never is.

The assumption is that, in the circumstances, the leader and his or her
campaign team did everything they possibly could. In reality, however,
they failed to do the one thing that would make a major difference: identify the strategic obstacles blocking the party’s ascendancy and deal with them.
As in the CBC’s case, the obstacles are obvious if one steps back a bit from
tactical gameplaying and thinks matters through. People may talk about
health care and the environment, but when they vote, they have the economy in the back of their minds, and the NDP has little or no presence on economic issues, least of all in framing the economic future in democratic socialist terms.

Still more crucial: In a mass media society, the forces that do create the “frame” – the context in which politics take place – are the mass media
themselves. In Canada, the mass media are largely in right-wing hands.
This mass-media power, and not the Liberals or the Conservatives, is the
NDP’s real opposition. Not challenging this power, but instead trying to
work within the frame it creates, means that, when the election writ is
dropped, the NDP is beaten before it begins. For most Canadians, the NDP
falls outside the frame, whatever Canadians’ views on particular issues, and they vote accordingly.

The NDP stubbornly avoids addressing the strategic obstacles that stand in its way while simultaneously bemoaning its unfulfilled expectations, election after election.

The British Columbia labour movement
In 2001-2004, the British Columbia Liberal government planned and undertook major privatizations. This included hospital contracting out, an increased role for private clinics, exploratory so-called “public-private partnerships” (P3s), and the sale of major crown-owned companies or the spinning off of parts of them.

Not all such initiatives succeeded, but labour-movement opposition was a minor factor in those cases. Plans to privatize the Insurance Corporation of British Columbia were dropped largely because the right-wing businessman hired to run ICBC realized that the business case for maintaining the publicly-owned monopoly was a compelling one, and dug in his heels. Privatization of the Coquihalla Highway floundered for the most part because of opposition by local Liberal Party backers.

Two major sales, however, did go through: BC Rail to CN and BC Hydro’s back office to Accenture. (BC Hydro is also being prevented from undertaking new power projects, future development being reserved for private companies.) In both cases the unions affected and the BC Federation of Labour mounted large campaigns to block the privatizations and in both cases they failed. The BC Rail campaign is a good illustration. The campaign focused on generating an outcry up and down the BC Rail line. Public rallies were organized. Literature was produced. “STOP THE SALE OF BC RAIL” pins and signs were distributed. News releases were sent out. Letters to the editor were written. Practical economic arguments for not selling out were cited. All this drumbeating went for nought, however, against a government determined on ideological grounds to sell the railway.

This could have been predicted. What was required, in addition to these traditional, routine tactics, was to change, or at least put into question, the larger “frame,” or perspective, within which an ideological government perpetrates and gets away with such destructive actions. In short, what was required was a strategic approach.

One needed first of all to change the way British Columbians think about their regional economy and business enterprise generally, so that doing things together as British Columbians - as people living together in a region - is at the forefront of how they see the economic future. Publicly-owned BC Hydro and BC Rail would fit naturally into this picture, not just as corporate accomplishments, but as leading future models. (Keep in mind, too, that BC Rail was sold in two parts, with its profitable and future-oriented Marine Division going first.) In effect, the privatization in whole or in part of the crown companies would have to be seen as not only counter-productive, but also outside the way British Columbians envision their future economy.

Secondly, one needed to throw into doubt the right wing’s monopoly of credibility on business-enterprise matters. The Liberals predictably framed the privatizations as moving BC ahead into the modern, international business world, and the media, while noting the practical arguments against a sell-off, went along. This framing was validated by the larger, assumed perspective of how the modern business world turns and the parallel perspective that only the Liberals and their friends know about business and can speak with authority on it. Unless there was a pre-emptive strategy to take on the Liberals’ and the right wing’s ill-deserved business credibility, by establishing a countervailing "frame," specific practical arguments were likely to fail.

This is what happened. The BC labour movement ignored the strategic challenge.

Copyright © Herschel Hardin 2005
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