Sunday, September 15, 2013

The Oracle Ethical Debacle at the America’s Cup

Team Oracle may or may not win the America’s Cup. While the cup itself is a billionaire’s bauble, Oracle’s approach represents a perfect corruption of the competitive ideal. Larry Ellison, the world’s fifth richest man, has pursued this bauble for a generation. His boat finally won it in 2010 in a race with no design rules. The superior technology won. He then rewrote the rules to minimize the number of competitors; cheated on his own rules, then complained about the rules. This approach represents the pure distillation of arrogance, wealth and competitive disdain for rules where winning is all that matters.

I know nothing about sailing except for hanging over the side trying to avoid puking for two hours the last time I tried. Every several years I do follow the America’s cup. The America’s Cup used to be a bumptious competition among millionaires sailing to win the “world’s oldest trophy” (sic). An oddity of the cup, the winner could write the rules for the next competition including specifying the dimensions of the boats and choosing the place.

Despite its rhetoric, the competition has never been genteel or nice. Millionaires let alone billionaires are seldom genteel or nice. The cutthroat wealthy litigated, fought, pushed boundaries, got penalties and fought for advantage from hiding keel innovations to new hull materials. The competition, however, remained on a relatively level and specified field with boat specifications.

While Ellison and his arrogance and money pushed it into the twenty first century with technology innovations, the cup degenerated into an ugly morass of international litigation among giant corporations. In 2010 a special sail off with no rules, lead to Oracle finally winning on the basis of running differing technologies against each other. The superiortechnology with no rules lead to the victory.

Oracle got to rewrite the rules of competition and choose the venue. It did so with a vengeance including outlawing appeals of governing board decisions and prohibiting anyone who litigated in court from competing. This was designed to avoid the morass that singed its winning competition.

He mandated a new class of cutting edge boat called anew class of super boats called AC72 catamarans—boats welded carbon fiber and airplane technology to sailing. This set minimum design specifications upon size and style and places some thing like a level playing field. It also pushed the design and technology to its furthestboundaries.   

The competition should then reduce to sophisticated and fine-grained tweaks. It would have some thing to do skill, training, integrated teamwork and reading the wind and course rather than technological superiority.

The boats are stunningly beautiful and fly across the waves at 40 plus knots. The boats are essentially flying wings with 13 story advanced fiber-carbon technology airplane wings as the main sail. They are majestic and stunning to watch and incredibly fragile and hard to sail. At least they created a “category” within which groups can tweak and build boats unlike Oracle’s sham victory in 2010.

Having defiled the concept of competition last time, Oracle proceeded to ruin any credibility it had as a team and culture as thoroughly as Lance Armstrong did for biking. Let’s follow this.

1.    They turned a millionaires sport into a multi-billionaire’s sport or corporate—much like what formula one racing has become. This year only five groups could even think about building boats to compete. The boats cost 100 million plus dollars. Along with Prada and the Artemis syndicate; the best competitor turned out to be Emirates New Zealand.
2.   Last year Oracle was caught cheating by spying on Emirates in New Zealand. Nothing unusual here, just regular cut throat cheating in a billionaire’s game. But having rewritten the rules, Oracle would not even abide by them. 
3.   After cheating once, Oracle cheated again when they overloaded the weighting in the World Cup races where 45-foot catamarans raced. These boats were regulated by exact specifications raced to test skill and train, not just reward technology. They were also serving as prototypes for the America’s Cup boats.
4.   The team and leaders denied all knowledge of the overweighting and cheating. To be clear, no one believes them. This is a team noted for its maniacal control and culture. Everything is controlled from top down and nothing goes unnoticed. 
5.   After cheating twice and then getting caught, Oracle paid a pittance of a fine of 670,000 dollars. But they also were penalized two races in the America’s Cup competition and started -2 races. They complained when they could not appeal; after they had rewritten the rules to no one could appeal decisions.
6.   This culture of cheating leads to an odd forms of pouting and utterly lack of loyalty. In the very first race, having proven their disdain for rules, the Oracle boat bleeped violation charges against Emirates four times in the first several minutes of the first race!  This tells you about the attitude of the crew and leadership obsessed with rules they have already broken.
7.   After falling behind in races, the boat jettisoned its navigator and ran out to hire a world famous navigator, probably the best money can buy demonstrating, not only do rules not matter when winning is all that counts but neither do people.

The Oracle team epitomizes a culture that values winning over everything. It even ignored the reality in 2010 that winning itself is defined by rules. They have assumed technology could defy or at least transcend rules. They illustrate how wealth facing sport unbound by competitive rules that level the playing field, turn competition into farce.

Oracle prefers a world without rules. Denied that, it prefers a world where they write the rules. Even given that they prefer to cheat on the rules they have written. Whatever aspirations Oracle have to some pseudo-samurai worldview that Ellison preaches, team Oracle has missed the fundamental point—a samurai lives by a code. Winning matters, but winning with honor matters more.

Oracle in the America’s cup demonstrates what happens when winning is all that matters.

Oracle may win; but it deserves to lose.

1 comment:

  1. Last week Ellison flew 70 New Zealanders out of Auckland to modify his boat... No wonder why it is so fast now! In NZ, no one seems to question the huge ethical issues of having kiwis working for both sides: Team NZ and Oracle. The whole thing would be a despicable farce between billionaires if the NZ government had not put tax payers' money into team NZ, in the hope to get the cup and (the wealthy) to boost a NZ economy in need. A complete rip off for the taxpayers. Of course, Ellison's wallet is probably thicker than the Bank of NZ. Sad day for humanity when loaded bullies rule.