Thursday, July 13, 2017

Release the Goats!

Some years ago I brought you the story of a team of goats that were being used to clear some brush from a hillside in Los Angeles – and how labor officials were protesting because the goats replaced a crew of twenty or thirty human employees with a single goatherd. At the time, I noted that the use of goats, as opposed to gasoline-powered agricultural equipment, was not only cheaper and more effective but also reduced air pollution and noise pollution, not to mention the production of naturally-occurring fertilizer. It came as no surprise to anyone, however, that none of the humans involved (except possibly the goatherd) were willing to put the environment ahead of their financial benefit…

Now the same story has come to Michigan, only this time there’s a university and an actual union grievance involved. According to a story in the Battle Creek Enquirer, the American Federation of State, County and Municipal Employees (AFSCME) is claiming that Western Michigan University failed to notify them that it was planning to bring in goats to deal with brush clearing, and that this represents a violation of the union’s agreement with the school. Why, exactly, anybody would want the assignment of clearing a poison ivy-infested woodlot in the middle of a Michigan summer is beyond me; it seems more likely that the union would be protesting against having to do this work, or at the very least, complaining about the working conditions. None of this appears to bother the goats, though…

Now, we should probably acknowledge that, this time at least, there probably is something to the “slippery slope” argument being raised by the union leadership. Even if none of their members want this particular job, the fact that the University has apparently brought in non-union labor to perform a task that would normally fall under the union’s jurisdiction isn’t really something they can afford to let pass unchallenged. As I’ve noted in a number of other posts, every time you fail to defend a contract or an intellectual property it becomes geometrically harder to do so the next time, until you are unable to defend it at all. And while the goats themselves aren’t really laborers in the usual sense, the same can’t be said about the company that is providing them…

What is less clear this time is how to resolve the issue. Currently, the goats are ahead of schedule and will probably finish eating all of the offending brush before the grievance can be resolved through channels, and it is difficult to see how putting the goatherds out of work would benefit the union personnel in the first place. Under the circumstances it might just be better to let them finish the job, especially given that WMU is a public university, and the higher cost of using humans on the brush removal detail would be paid for out of our state income taxes. On the other hand, it might be possible for the University to acquire its own herd of goats, at which the official goatherds (if not the goats themselves) would become members of AFSCME…

I think the main takeaway from this story is the way changing times can impact us in unexpected ways. Goats grazing on a hillside are hardly a new technological advance, but the use of environmentally-friendly methods and renewable resources in everyday tasks is. At least, it seems unlikely that the use of goats eliminating union jobs was an issue when WMU and AFSCME first signed their labor agreement. It’s enough to make you wonder what other bronze-age innovations may complicated labor relations, or business in general, as we go forward…

Saturday, July 1, 2017

Beastly Decisions

There was story on the General Counsel website this week about a Fourth Circuit Court of Appeals decision on a religious discrimination case that was so stupid that I felt it deserves repeating. The original case was about a mining company employee who was refusing to use the company’s new biometric scanner to clock into and out from the job, claiming that this would be the equivalent of accepting the “Mark of the Beast” from the Book of Revelation. By itself this would probably be a non-story – a person’s religious beliefs are what they are, and as long as they aren’t proselytizing on company time or otherwise disobeying their supervisor’s instructions no one else will (or should) care. The company should still offer some accommodation, especially if they can easily do so (they could) and even more especially if the employee has provided long and valuable service to the company (the employee in question has been on the job for 37 years). None of that is what puts this story into the “stupid” category, however…

What is really absurd about this story, and is also the reason that the employee appears to have won his case on appeal, is that the company had already made accommodation for other employees who were unable to use the biometric system. Granted, the other employees were unable to use the biometric scanner because of injuries to their hands, not because of their belief system, but given that the company already had a numeric keypad for the other employees to use, it’s difficult to understand why they couldn’t have added a third identification code to the keypad and allowed the religious miner to use the same accommodation. Or, more to the point, perhaps, why they felt it was worth spending the money on a Federal court case, not to mention risking negative publicity on the Internet and mockery from thousands of scruffy bloggers, just to avoid adding one more identification code…

Now, we should probably acknowledge that we don’t know why the biometric sensor system was considered a good idea in the first place. If it is somehow harder to falsify attendance using the biometric system than it would be using a traditional time-clock system then it is understandable that the company would want its employees to use the new system, and equally understandable that they would not want every employee who wants to be able to game the system asking for an accommodation for various made-up reasons. But unless these problems are very wide-spread within the company, and the economic impact of all of the timekeeping falsification is extremely high, it’s hard to imagine that the benefit of using the system will be that much more effective than just having supervisory personnel verify attendance…

The big problem with making exceptions to any business policy is that once you have done so it becomes geometrically harder to explain why each additional request for an exception should not also be granted, until the rule becomes unenforceable due to more people being exempt from it than are still governed by it. This is why schools have zero-tolerance policies on weapons and drugs, and why companies are obliged to enforce patents and copyrights even in cases when they know the violations will never have any real impact on their business. It’s also why, in most jurisdictions, judges and magistrates are given discretion regarding sentencing for various offenses. But as with any other slippery-slope argument, there’s a real chance that applying one set of rules without exception in every possible case will result in outcomes even more absurd – and even more potentially damaging to the company – than not having those rules in the first place…

Traditionally, the only practical way to deal with the exceptions problem is to have very clear, and very exclusive, reasons for any accommodation being granted. For most businesses, schools, and government agencies, the Americans with Disabilities Act (ADA) spells out exactly what is and is not acceptable – which can be extremely useful in settling this type of situation. Outside of ADA sanctions the supervisory manager on the spot is going to need to establish company-specific and situation-specific exceptions, but this can be accomplished fairly. In this particular case, most people would be okay with an exception being made for ordained ministers from a sect that believes that biometric scanner profiles are equivalent to the “Mark of the Beast,” provided that they have worked for the company for 37 or more years at the time the accommodation is made…


Wednesday, June 28, 2017

Where’s The Harm?

It has been pointed out to me that I’ve been hammering on the theme of people being credulous idiots lately, and at least a few people have asked me what the big deal is. It’s hardly as if willful ignorance is an invention of this new Century; people have been doing things that they know to be harmful to themselves or to the world at large for millennia, and the planet and the human race are both still here. But there were two stories that turned up on the news aggregation sites this week that I think demonstrate that our world really is getting more dangerous – and the penalties for refusing to face the truth are no longer limited to an increased chance of public embarrassment…

First, there was the story on Gizmodo (also mentioned on the Cracked website) about a line of stickers being sold through Gwyneth Paltrow’s website that are purported to somehow promote your health. The ad copy for these things originally claimed that they made use of a material used by NASA for space suits, but once the folks at NASA called shenanigans on that it was toned down to a more generic new-age pseudoscience word-salad. I’m calling this product an extraordinary example of harmful and malignant nonsense, not because there is any reason to believe that affixing stickers to your skin is actually harmful, but because this product sells for up to $120 USD for a package of 24. You could buy quite a lot of vitamins and nutrients for that kind of money, whereas these “health” stickers will do you approximately the same amount of good that you would get from just taking 120 dollar bills and setting them on fire…

The second story was a great deal less light-hearted: CBS News is reporting that the state of Maine has just confirmed its first case of measles in twenty years. There’s no word yet on how many people in the region may have been exposed to the disease, or how many of those people may have refused to vaccinate their children against this completely preventable and potentially fatal disease because a bunch of celebrities appear to have latched onto a single completely-discredited study. We are justified in asking whether any of this would be happening if people weren’t more afraid of a supposedly possible side-effect of the vaccine than they are illnesses that are known to have a non-zero chance of lethality, however…

Now, I will be the first to admit that I have no credentials in medicine or the life sciences, but as a management professional and a student of failure analysis I’ve learned more than I really wanted to about people doing things for the wrong reasons. The fact is that working out and eating well is difficult and time-consuming, whereas slapping a sicker onto your skin is easy. Learning about disease, immunization, public health concerns or statistical probability is hard; taking the word of some celebrity clown on television is easy. Working to make yourself better informed, better equipped, or more capable of dealing with problems is difficult; just believing what you want to believe for no apparent reason is much too easy…

It has been said by people much wiser than I am that belief in conspiracy theories is one of the ultimate ways of dealing with life as just one person among billions in the midst of a world that does not care about any of us. It you believe somebody is trying to trick you, then you believe that they care about you, you see. I would submit that embracing the belief that you know better than people who have spent years in medical school and decades in research is the ultimate way of declaring yourself a person of importance in a faceless society. But it’s also what gets you epidemics of obesity, opiate addiction, poverty, illiteracy, malnutrition, and diseases that were all but eradicated decades ago…

And if the same idiotic principles are applied to Global Climate Change, Civil Rights, International Relations, Wealth Inequity, Renewable Energy, Nuclear Proliferation, or artificial damage to other aspects of the Earth’s biosphere, then we really could be looking at the end of life as we know it on this planet…

Monday, June 26, 2017

Blade Wars

For some time now we’ve been seeing ads on television and various other media for new companies that are selling razors and shaving products over the Internet. I’ve been watching them with some interest, both because I use such products myself and also because this is a product category that has suffered from artificially inflated prices for as long as I’ve been old enough to shave. Whether this is an isolated case or if it turns out to have relevance to other product categories remains to be seen, but at the very least it would appear that the traditional strategic advantages are no longer quite as sustainable as you might think…

Fox Business is reporting that Gillette’s share of the men’s shaving market has been dropping for at least the last six years – from nearly 70% in 2010 to 54% in 2016, and possibly still dropping. To the best of my knowledge, there has never been any reason why other companies could not have challenged Gillette’s domination of the industry, any more than other companies could have challenged Frito-Lay for control of the potato chip and corn chip industry. But as in the case of salty snacks, it can be very difficult for a new competitor to break into an industry that already has an entrenched competitor with vendors, distributors, retailers, and the majority of the end users already its control. The purchase of Gillette by Proctor and Gamble in 2005 only made things that much harder for anyone else who might have thought to break into the market…

As a result, Gillette has been selling razor cartridges for as much as $6 each, and is in the middle of testing and introducing new extensions to the product line that might go even higher. It has become something of a running joke in recent years that the company keeps adding blades and jacking up the price. And while exactly how much of the price was made up of profit margin remains in dispute, it has not been much of a surprise to learn that the well-known Schick competing products run for as little as 50% of the Gillette equivalent’s price. Finding out that the cheapest Dollar Shave Club refill cartridge goes for as little as 20 cents was rather more surprising, to be sure, but what was really amazing was seeing the full-page ad in the newspapers responding to the new competition…

You can see one of the examples at Campaign Outsider if you’d like to. Gillette was already planning to answer the shave clubs delivery/convenience advantage by launching their own subscription service, but apparently the threat posed by the price advantage has caught their attention as well, and they are now publicly announcing upcoming price reductions across their product line. If the Fox Business story is correct, this should amount to an average reduction of about 12% on Gillette shaving products. Whether this will be enough to counter the 90% price advantage offered by the new online competition remains to be seen, of course…

Now, I’m not saying that the new price reductions won’t work, or that the success of the new shave clubs will bring additional competition into the market. I don’t begin to have enough data to make any such predictions, and I’m not sure anybody else does, either. For all that the situation is a classic example of a previously dominant company having to deal with an unexpected entrant crashing their market, the use of an Internet-based campaign and a direct-billed subscription model, not to mention home delivery, is almost literally unprecedented in this industry and product category. I can’t see any reason it shouldn’t work, and I’m not sure there’s anything Gillette or P&G can do about it – except compete with the newcomers on their own terms, that is…

Gillette is still entrenched in the market; their product is available in virtually every supermarket, drug store, convenience story, and general merchandise retailer in this country. They’ve got the technology and knowledge-base to create superior products, the distribution channels to get them into any customer’s hands, and the capital to run better ads and set whatever price points they can get away with. It seems possible for them to compete in this market and win, especially with the support of their corporate parent. What they can’t do is ignore the threat that these new competitors represent. The way they have been doing until now…

Wednesday, June 21, 2017

Sucker Showcase

Many years ago, the original cast of Saturday Night Live did a sketch about a game show called “Irwin Mainway’s Sucker Showcase” during which the host would tell various credulous idiots (the titular “suckers”) various obvious lies in order to get them to humiliate and/or injure themselves. It’s a variation on the old idea that people will do literally anything in order to get on television or win money; when you combine the two there’s almost nothing that is too obviously stupid to keep people from doing it. Dan Ackroyd was the MC (Irwin Mainway) and Steve Martin was the show’s “returning champion” – e.g., somebody so dim that he couldn’t figure out the show’s true nature even after enduring an episode of it. Steven Martin later included the sketch in his own T.V. special; you can find the clip here: https://youtu.be/4Hi8DIEhb_o

What seems most remarkable to me isn’t so much how prescient this sketch turns out to have been as how much more honest the format is, to the viewers if not to the contestants. Modern reality television has subjected contestants to activities at least this unpleasant, and potentially even more hazardous to life and limb, starting with shows like “Fear Factor” and “Survivor” and continuing to the current day. But where the fictional Irwin Mainway and whatever heartless production company was behind him were openly making fun of people, and inviting their audience to laugh at these suckers/contestants, the modern reality show hosts (and, one assumes, producers) go on endlessly about how exciting and competitive their contests are, and how well their contestants are dealing with the challenges involved…

Now, I would be the first to admit that this isn’t a new idea. A number of television series have based episodes around the concept over the years, and there are at least three full-length movies of which I’m aware that have been released on the same themes. I will also admit, however, that I have started worrying about the long-term effects of both encouraging people to be credulous idiots and encouraging other people to watch them and laugh. As the world becomes more complicated all around us it gets easier every year to make an innocent mistake that can screw up your entire life. Even ten years ago if you lost your cell phone, the worst that would happen is that you would report it as lost/stolen, have the carrier deactivate the account and give you a new one, and buy a new phone. If you’d bothered to sign up for the insurance, they’d just give you a new one. Today that same phone could allow someone to drain your bank account and max out all of your credit cards before you noticed it was gone…

I point this out for a number of reasons, not least of which is I’m worried about the corrosive effect this is having on our society; however, the effects on business, and particularly on business strategy, may be even worse. Business runs on information, even more so than money, and without complete and accurate information it isn’t possible to plan your activities or make competent decisions. If you base your calculations on bad data there is no way you can possibly get the right answers (the infamous programmer’s term GIGO – garbage in, garbage out – comes into play here), and with people deliberately introducing nonsensical information into reference sources just for the fun of watching more people behave like credulous idiots it’s getting harder every day just to tell what is real and what is supposed to be humor…

Earlier this week I noticed a clickbait item trumpeting that Don Knotts had just blurted out his “real” reasons for leaving the Andy Griffith Show. Which sounds like minor celebrity gossip, at best, until you realize that Mr. Knotts has been dead for eleven years as of today’s writing, and he revealed the complete rationale for leaving the show in the early 1970s. Heaven only knows what kinds of malware or online scams you might be subjecting yourself to if you clicked on that link, but the one thing I’m fairly sure of is that if you did click on it you would not have learned anything about the late Don Knotts that everybody else didn’t know forty years ago. If you make a practice of clicking on such links you probably won’t learn anything else, either, but you’ll definitely have qualified for an appearance on the next Irwin Mainway production when it comes out…

And that’s still not even the worst of it…

Thursday, June 15, 2017

The Hits Keep Coming

Suppose for a moment that a random customer of yours has just saved your company from a disaster that would have meant the loss of an asset worth at least $100 million, plus at least a few hundred wrongful death lawsuits, each of which can easily run into the millions of dollars all by itself. Let us further suppose that the employees to whom they initially reported the impending disaster did not believe their report, and only reluctantly verified the story while being particularly rude to those customers. And while we are at it, let’s suppose that the signs of impending doom that they discovered could have been noticed by any ordinary school child, and that enough witnesses exist that trying to cover up the details of the story would be asinine. Where would you expect to find those customers when the dust clears?

Well, unless you said “Sleeping on the floor in the Baggage Claim area because no one gave them a hotel voucher” you have, again, over-estimated the customer service and public relations skills of our old friends over at United Airlines. According to a story from the New York Post a United flight was departing from Newark for Italy when two of the passengers noticed fuel leaking from the airplane’s main tanks in the wing. Not just a dribble, either; they described it as looking like the stream from a fire hose. The flight attendants reacted to the report of this information by yelling at the passengers to get back in their seats, and only reluctantly looked out the window – whereupon they immediately called the cockpit and told the flight crew…

After aborting the takeoff and returning to the gate the flight crew were nice enough to the heroes of our story, personally thanking them for saving the plane and everyone aboard from the fiery (and idiotic) death the airline had unknowingly been courting. United’s ground personnel were less effusive, however, proceeding to attempt to cover up the incident, issuing a statement downplaying the leak, and trying to get everyone on the flight rebooked and overseas before they could start talking to the press. They managed to get meal vouchers to all of the passengers, but somehow failed to supply hotel vouchers to all of the customers they had just massively inconvenienced (and nearly killed), including the couple who had noticed the leak in the first place…

Now, I don’t mean to suggest that these two people, a couple on their honeymoon, were the only thing standing between United and total disaster. We can probably assume that the flight crew would have noticed the rapidly dropping fuel levels, either on a routine check or when the flight computer’s alarms went off, and returned to the airport. I’m also not suggesting that the airline go to any special lengths to thank them, although one would imagine that customer retention concerns alone would make that worth the effort. I’m just pointing out that I’ve gotten better care than that when a flight I was supposed to be on was canceled at the last moment, and all I have ever done for that particular airline was buy a ticket…

Okay, so this wasn’t really an atrocity. The worst thing that seems to have happened is that a group of passengers was moderately to severely inconvenienced (if the worst thing that ever happens to you while traveling is having to sleep in an airport, you’re an extremely fortunate traveler), and any of that could have happened on any ordinary day, even without mechanical failures and employees who appear to be thick as a brick. But it does make you wonder how many close calls a single company can survive, even leaving potential air disasters out of it for the moment. Sooner or later people are going to get fed up with the various United shenanigans and start voting with their feet. You might expect that the company would want to put off that day for as long as possible, or at least avoid any billion-dollar disasters in the meantime…

But unless this story turns out to be a hoax, you’d be wrong about that, too…

Wednesday, June 14, 2017

Museum of Failure

As I’ve mentioned a number of times on this blog, I originally went back to grad school to learn more about management failure, with an eye towards getting people to stop running perfectly good companies into the ground. This turns out to be harder than you would expect, because as one of my professors pointed out during my first year in Michigan, it’s difficult to study companies that don’t exist anymore. Even if you could find financial data, operational records or human resources information for defunct companies, and you generally can’t, the problems that killed the company could just as easily be intangibles like personality conflicts, poor stakeholder management, greedy owners, poor corporate governance, or sudden economic downturns. Usually the best you can do is study the failure of specific products or programs…

Regular readers of this blog (assuming I have readers) already know that I collect these stories; they’re a staple of my lectures at MSU as well as a major part of why the “Stupidity” tag appears on more of these posts than any other. Sometimes I do find myself having to remind people that most businesses (and business people) aren’t actually idiotic failures; it’s just that people who operate a business successfully very rarely need to hire management consultants, and they even more rarely do anything funny enough to be worth making snarky comments about in a business blog. And while anyone who aspires to run a successful company, or even work for one, absolutely should study the way successful firms have accomplished their missions, I was still practically giddy when I learned that an entrepreneur and clinical psychologist had launched a Museum of Failure in the city of Helsingborg, Sweden…

You can visit the Museum’s own site if you want more information, or pick up the Detroit News story online if you’d like to read about the operation. Some of the artifacts in their collection will probably already be familiar to the reader, such as the infamous Apple Newton PDA or the venerable Sony Betamax, while others may have slipped under your radar, like the Harley-Davidson fragrance products or the visually revolting green catsup. But while many of these items may move you to wonder what the inventors were thinking, the key point of this exhibition isn’t so much that they failed as specifically how. Because while many of these products are every bit as preposterous as they sound, some of them are quite sound in themselves…

Take, for example, the Betamax. Most people know it simply as an older format that lost out to the more common VHS tapes (before the entire product category were rendered obsolete by DVDs, Blu-rays, and eventually streaming video services). What most people today may not realize (or remember) is that the Betamax was actually a better product. By any objective standard, the Betamax had better picture quality, better sound quality, better workmanship, and was generally more reliable than even the most advanced VHS systems. What did it in wasn’t price or quality so much as a fundamental misunderstanding of the market – and the competition…

When Sony first introduced the Betamax it was a very innovative concept: bringing both the size and the cost of video tape down to the point where any private citizen could have one at home. Consequently, the company decided to keep close control of all aspects of the system, refusing to allow anyone else to use the technology. With no real competitors, they could set the price point wherever they wanted to, and take their time bringing out additional features. The extent to which their competitors reverse-engineers the Betamax design remains somewhat unclear, but in addition to the lower price it was the longer tape running time and pre-recorded tapes that made the VHS so much more successful. With a run time of less than an hour, later increase to just over two, it would be difficult to record movies from cable or broadcast television on a Beta tape, and initially it was almost impossible to find anything pre-recorded on one…

Now, I don’t mean to suggest that the failure of the Betamax, or any of the other products in the Museum, for that matter, would have been easy to predict in advance. If I could tell you with any certainty what products or features would sell in any specific market I could probably have retired on the fees from telling companies not to build the Apple III, the Google Glass, or the Pontiac Aztec. I am in full agreement with the founder of the Museum that all future innovators, and the operational leadership of companies attempting to sell new and innovative products, should study all of the products in this collection, and any others that they can get their collective hands on…

Because I can almost guarantee you that the next big exhibit in the Museum of Failure will have its initial product launch any time now…