ICANN should be a boring organization but it hired people who want to make a difference.
I visited ICANN’s offices in California in 2008. That was well before ICANN’s finances ballooned. There were fewer than 100 employees back then.
I’d characterize ICANN in 2008 as boring. It was a small organization that was just making sure the domain name system worked.
Then something happened. The company started hiring the wrong type of people. It started hiring people that don’t want to do boring work. People who want to make a name for themselves. It hired people who want to be at the helm of a growing organization that takes on an important role in the world.
Perhaps it started with Rod Beckstrom, a CEO obsessed with his personal brand. Then Fadi Chahade, another person who wouldn’t take a role that wasn’t exciting and important.
Hiring people that want to make a difference is usually a good thing, but not for an organization that should be boring.
The size of ICANN has tripled between my visit to ICANN and now. It grew its international presence. It lobbied more. It got involved in an ever-growing list of activities. It recruited lots of people that are used to $300k+ a year comp plans and assistants.
It was no longer a boring organization. And that has become a problem.
Looked at in the best possible light, you can argue that the group’s growing list of activities over the past decade has been at the behest of the community. ICANN has trouble saying no and has taken on an ever-increasing workload.
And perhaps its international expansion was necessary to keep the web from splintering. It needed to make the world believe that ICANN was not a puppet of the United States so that other countries wouldn’t wrestle control away from ICANN.
At first, new top level domain names masked the organization’s growth. The “cost-neutral” program brought in a lot of cash that allowed it to hire more people.
Then the bubble burst as new TLDs came out with a whimper. The companies that paid millions to ICANN for new domains began to struggle and their annual payments to ICANN were based on minimums rather than high transaction rates.
While these new TLD companies cut costs in response, ICANN continued to grow. You can only do that for so long.
So now we’re at a point where the money is running out–at least on paper when you ignore the huge cashpile of new TLD auction proceeds that is reserved for allocation by the community.
I don’t envy the situation new CEO Göran Marby found himself in when he took over in 2016. He came into an organization that was spending beyond its means, all the while missing the urgency of one of the biggest issues to face ICANN’s contracted parties in the past decade: the EU’s General Data Protection Regulation (GDPR).
Even though the problems originated before his arrival, it was disheartening to read his take on how costs can be cut. He said 80-85 percent of the FY19 budget is already “committed to certain projects that are in our Bylaws, our contracts, our operations, and other fixed costs.”
I might accept this sort of a response from a boring organization. An organization that got blindsided by a forecast that didn’t work out.
But I won’t accept this response from an interesting and important organization that has grown uncontrollably for the past decade. If you’re going to act like an important business and compete with exciting companies for talent, then you need to be willing to cut costs like any business does when things head south.
For example, ICANN has one of the most generous retirement plans I’ve ever seen. It contributes 5% of each employee’s salary to their 401(k) even if the employee doesn’t contribute a cent. They even match up to 10%. (When reviewing ICANN’s tax returns, I was surprised to see that not all highly-paid employees took the organization up on this match. It’s free money!)
This perk is apparently based on “competitive and regional practices”.
Perhaps I’ve been in the entrepreneurial world for too long, but can someone point me to other companies with retirement benefits like this? I think it’s time to go get a job there.
Marby needs to be prepared to make hard decisions. He gets paid close to $850,000 (if he hits his bonus) to make these decisions.
Consider suspending bonus programs or tie a significant portion of it to finding ways to be more efficient. Review facilities costs. Cut staff.
No one is indispensable. When it comes time to cut people, a lot of arguments are made that employee X or employee Y is too important to let go. They’re working on a project that’s too important or their domain knowledge is too important.
If an employee’s domain knowledge (here, figuratively and literally) is too important and will leave with them if they leave ICANN, then I’d argue that this employee hasn’t done a good job. A good employee will make sure to document his or her knowledge and bring others around them up to speed.
Oftentimes these employees that are “too important to be let go” end up leaving, and the organization moves along without missing them a few months later.
These aren’t fun things to do. And it’s not the fault of the individual employees that will be hurt by this. But it’s important if ICANN is to retain its role in the domain name system going forward.
And while the community should certainly be consulted, it’s up to the highly-paid management to make the tough calls.
Tripeee says
Think there is a great point in here that you made, that could use its own article. How could ICANN have been blindsided by GDPR ???
Who was asleep at the wheel at ICANN and what were they working on instead? Cross-field validation for registrars ? Red Cross , Red Crescent for new TLD operators ?
Samantha Frida says
Thank you Andrew for writing this. I think it is refreshing to to see a blog write up that calls out what many of us all know and think but do not express enough for obvious reasons. The motive for stating this is not to hurt anyone but to express frustration that the industry can do so much more if there were leaders who would lead with integrity within the industry.
I do not know if the wrong people were hired so much as an organization’s mission and approach should be clear and led by integrity. That in itself should attract people who are aligned with the organization’s objectives where the salary packages should not be the driving factor as much as the mission. You can have good people working at a place but are challenged with organizational policies/legalities to do good positive work. Some leave because this approach isnt for them and others stay because no where else pays them as much so they compromise and stay. Therefore, the organization should be strict about adhering to core principles that create integrity, trust and respect as a foundation to conduct any part of their business. I think transparency is a good one as well, to have.
Motivation to work and work for the company or organization you are with, is different for everyone. Some do it to support a lifestyle they have built over a period of time and the amount earned has to support it (regardless if they agree with corporate ethics or not) and others may choose a lifestyle that does not need the big bucks to upkeep because the ability to exercise freedom of choice is more important than the big bucks. These folks want to make an impact in a positive way because they see the opportunities. More often than not, the former exist more than the latter.
In my opinion, the industry is in need of changes across the board (beyond ICANN), where people are driven to make an impact positively driven by unselfish motives and it should start at the leadership levels to set the example.
As a side note, I know there are others who offer 15% contribution to employee retirement plans.
James says
“ICANN has trouble saying no and has taken on an ever-increasing workload.”
This is the key point of your article, and can’t be emphasized enough.
The fundamental vulnerability in the ICANN model is that “the community” can collectively decide to expand the scope of the organization, get the Board to agree, and then the CEO and Staff have no choice but to carry out those directives. There isn’t one person (or team) empowered to say “No”, or otherwise veto decisions like this.
Exhibit A: Work associated with the IANA transition came in at more than 4x over budget, mostly due to independent legal advisors and intercessional face-to-face meetings (with sponsored travel, of course). Clearly the IANA transition and associated Accountability reforms was a historic bit of work. But $7m should’ve been more than sufficient to do this properly, and $25m feels like a boondoggle. (For disclosure, I was involved in both the ICG and CCWG-ACCT)
Jean Guillon says
This is an interesting post, thank you. Many talk about expenses and salaries at ICANN but from where I stand, I see the ICANN becoming a big administration with more difficulties to deliver results. Some questions/problems have been pending for years and while many groups work on delivering solutions, none “that work” are found and many projects…have no deadline, meaning that it can last for an unlimited more number of years. I am not only referring to the ICANN new gTLD program but for questions as simple as spam and phishing: creating “rules” that registrars and registries should follow has demonstrated that…spam and phishing is increasing. What’ the point?