Believe it or Don’t!

Sometimes you run across a news story so absurd that you hesitate to post about it, just because you worry that people will think you are making it up. This is why, for example, I never did anything with the tale of the giant (25-meter) rubber ducky that got loose on a Dutch canal and ended up blocking traffic when it got wedged into the span of a nearby motorway bridge. Despite being an excellent example of a publicity stunt gone horribly, horribly wrong (a lesson on the importance of good operational planning as well as the critical need to avoid annoying potential customers), I was too concerned that everyone would think the pictures were created in Photoshop and the story was made up. I also failed to report the truck accident that spilled 10,000 gallons of Miracle Whip onto Interstate 80 on the same day that another truck on the same road overturned and spilled 30,000 pounds of corned beef. But frankly, even you can believe that those things happened, I still wouldn’t blame you if you refused to accept that United Airlines lost Dave Carroll’s luggage this week…

For those who don’t remember him, Carroll is the musician who witnessed his $3,500 guitar being hurled (and broken) by United’s baggage handlers, only to have the airline refuse to pay for the repairs to the instrument or make any effort to compensate him for his time a trouble until he created a song about the episode and posted the video of it on You Tube. I wrote about the original situation last July after it happened in a post about customer service and stupidity. Today, however, the CBC online is reporting that Carroll was on his way to Denver last Sunday to give a keynote speech about customer service, and had to fly United as they were the only carrier that had a flight going where he needed to go, when he needed to go there. Carroll arrived without incident Sunday night; his luggage did not turn up until Wednesday evening…

Now, I don’t really want to rag on the airline; when you are moving several million pieces of luggage each day, you’re occasionally going to have one end up someplace it wasn’t supposed to go. It just seems incredible that it would take them four days to find a bag again, having lost it in the first place – let alone that they would engage in the farcical behavior described in the news story, where they gave contradictory instructions to the passenger whose property they had, once again, placed at risk. Even leaving aside the fact that you would expect them to keep an eye out for Dave Carroll and try to keep from providing him with any additional career-enhancing material, it’s amazing that the airline would have completely violated Department of Homeland Security regulations that require every bag to travel on the same aircraft as its owner – or been unable to just load and unload the bag if they didn’t…

The long-term effects of this story remain to be seen. Certainly, it’s not a good thing for United Airlines; unlike the original episode, which seems to have brought them only ridicule and discomfort, this one could actually end up bringing them Federal investigations, sanctions and fines. If those investigations actually turn up some half-baked attempt on someone’s part to “get back at” Dave Carroll, it could bring the airline criminal charges, huge liability lawsuits, and an absurd amount of lost business. I normally discourage people from believing everything they see on the Internet, but in this case I have to believe that it’s a story too absurd for anyone to have made up. Believe it, or don’t, as you see fit…

Pay Attention, Already!

I am sometimes amazed at the attitude taken by people who have no familiarity with business toward legal proceedings. It resembles nothing so much, in my opinion, as the way a barbarian hero from a swords-and-sorcery epic regards magic: as a malevolent, incomprehensible force that can’t be fought against, can’t be reasoned with, can only be avoided or perhaps occasionally bribed to leave you alone. For reasons that escape me, people who would never consider telling a plumber how to install pipes or a carpenter how to drive a nail will feel no compunctions whatsoever in calling for the most preposterous changes in our legal system – and people who will bravely face down accountants, evangelists, or even dentists will take to their heels at the suggestion of a possible lawsuit…

Even worse, I suppose, would be those people who for some reason believe that if you ignore spurious lawsuits they’ll just go away. There’s a reason why most large corporations keep a few lawyers around, and there’s a story out of Wisconsin this week that demonstrates the principle better than most. A story reported by Milwaukee Journal Sentinel online tells of a $1.26 billion award granted to two men who sued PepsiCo, claiming that the soft-drink giant stole their idea for a revolutionary new product: bottled water. According to the online article, the plaintiffs claim to have a signed agreement from thirty or so years ago regarding their ideas for selling a purified water product, which they claim PepsiCo violated by producing the “Aquafina” product for sale. Without examining the facts of the case more closely we can’t really say if this claim was supported or not, but the award was a default judgment, given because PepsiCo failed to show up in court…

Now, according to the company there were “internal process issues” involved; specifically, a secretary in the company’s legal department failed to log correspondence on the case or tell anyone that a key letter had been received. It’s difficult to imagine that this was the only correspondence PepsiCo received about the case, however, or that they routinely allow billion-dollar cases to be “misplaced” by a single clerical employee. What seems more likely is that the company mistook this action for a simple “nuisance” lawsuit (of which any large corporation receives hundreds every year) and failed to pay proper attention to the case, even after it had cleared preliminary hearings and had been assigned a court date. Unfortunately, one of the ways you can tell that a legal action is for real (and not just a nuisance) is when it isn’t immediately laughed out of court and is given a spot on the calendar…

PepsiCo is trying to get the award rescinded, claiming that they haven’t had due process and that the confidentiality agreements on which the plaintiffs have based their case have nothing to do with Aquafina in the first place, but this will not be easy for them, both because they failed to show up for the trial and also because of the claims of internal process issues, which sound remarkably like “the dog ate my homework.” Even if everything PepsiCo is presenting is absolutely true, their initial actions (or lack of actions) were at best bungling (which undermines their credibility) and at worst highly disrespectful of the court (which is not a good way to plead your case). A court case in which the plaintiffs claim to have signed documents which prove that you are in material breach of an agreement made years ago does not fall into the same category as lawsuits in which someone is claiming that your bottling plant is secretly being used to send military secrets to space aliens in Belgium, and should not be treated with the same disdain…

Of course, if PepsiCo were playing attention to their official legal correspondence, they would already know that…

Sibling Rivalry

We’ve been hearing a lot about outsourcing (contracting or subcontracting activities previously handled in-house to outside vendors) and off-shoring (moving operations previously handled domestically to locations outside of the home country) in recent years, most often with somebody complaining that faceless, heartless companies were using these methods to obtain lower costs at the expense of American workers. The implication is that these companies should put a higher priority on patriotism than profitability – or, if you are a less rhetoric-obsessed individual, that these companies should take a more holistic approach to their strategy and consider that if their own community has no jobs, there will be no disposable income and no one to purchase their products, thus defeating the point of going offshore in the first place. Of course, it remains to be seen how the people raising those arguments will fare when the “foreign” location turns out to be South Carolina…

The Associated Press, in a story cited by Google News online, notes that Boeing has elected to build its new factory in South Carolina, where it will locate the second assembly line for the new 787 airliner. The primary motive cited is the $170 million in incentives offered by South Carolina’s state government, but the article concedes that part of the rationale behind the selection is the recent labor problems in Boeing’s long-time home base of Washington State, including a machinist’s strike and the inability to reach acceptance of a no-strike contract with the union. Various analysts are now speculating that if the move works out well for Boeing (and it is expected to), the company could move all of the 787 production, and possibly other new product lines as well, to the South Carolina location to take advantage of lower costs, non-union labor, and a favorable relationship with local government. Which would not bode well for Washington State…

Now, no one is suggesting that the people in Washington State have anything against the people in South Carolina; it’s quite likely in fact that the people in Washington State are happy for their Southern counterparts and wish the people in South Carolina all the best. It’s even more likely, however, that the people in Washington State would be happier to have all of the 787 production stay in their neighborhood and have Boeing expand into South Carolina and build something new in their new factory. It’s a near certainty that when the machinist’s union went on strike last year, shutting down Boeing’s commercial operations for over eight weeks, that none of their leadership was counting on the company moving a large portion of their operations to another state, let alone the appearance of a massive national economic crisis that would make it difficult for their membership to find alternative work. Still, we have to question if the strike was really the best choice they could have made at the time – since, even without the current recession, moving operations to somewhere cheaper has been a subject of much discussion in recent years (as noted at the start of this post)…

I’m certainly not anti-union; I’m not even opposed to this specific union, although I suppose it must sound that way. I’m opposed to people who refuse to consider the larger strategic implications of what they are doing, however, and I can’t imagine how the possibility of losing all of those union jobs to another state could possibly have slipped past the union’s leadership in this case, considering that Boeing already makes a large percentage of the 787’s parts in facilities in South Carolina. Fondly imagining that the company is too patriotic to move operations overseas is one thing; blindly accepting that they would somehow balk at giving the work to your brother and sister workers in another state is something else again. And in current climate it’s hard to imagine a state government in the U.S.A. that wouldn’t gleefully try to poach jobs and revenue away from their neighbors if they got the chance…

Which means, I suppose, that if you’re considering labor actions or anything else that might cause someone to send jobs somewhere other than your home state, you should probably give some thought to who else might be willing to take them for less money. Chances are, the list isn’t limited to some companies overseas…

Getting Worse?

Every few years we get treated to another talking head somewhere telling us how much worse the world has gotten since the last time we looked, and how all of this is the fault of whatever social, political, economic, racial or national group the talking head making the pronouncement is against. Most people pay no attention to this sort of thing, given that self-appointed guardians of taste, purity, goodness and/or righteousness have been making these pronouncements for at least the last 12,000 years (and possibly longer), and despite the dire warnings being given the world is still here and no one is being eaten by giant goat-eating cockroaches (except in certain parts of New Jersey). But then there are cases like the one out of Long Island, New York, this week about a mother using Craigslist to get revenge on one of her 9-year-old daughter’s classmates…

As reported by the local CBS affiliate station, a 40-year-old woman placed a sex ad on Craigslist and then gave out the victim’s first name and telephone number to men who responded to the ad. Needless to say, the mother in the case is protesting her innocence, and we should all remember that you shouldn’t believe everything you see on the local news, let alone read on the Internet. But in this case it doesn’t really matter, because we all know that even if this case turns out to be a hoax, somebody, somewhere is going to see this story online and decide it’s a good idea. Unless Craigslist stops taking sex ads (which seems unlikely; they didn’t stop taking those ads after it turned out a serial killer was using them to find his victims), this exact scenario is going to happen somewhere in America in the next year or so, and there’s no telling how many more people will get hurt…

People who are prone to that sort of thing will pounce on this case as further proof of the corrosive effect of the Internet on our society, but I have to wonder. No one was actually hurt in this case, and unless the girl being targeted and her parents are complete idiots, there was never any real danger involved; this would appear to be nothing more than an extremely high-tech version of the old prank of writing someone’s name and telephone number on the wall of a public restroom. The difference is that instead of a small local audience, this prank could be seen by anyone in the world who wanted to, and instead of hearing about it around the community, we’re hearing about it online (or on television), which tends to increase the volume (and the outrage) in these cases. The real question isn’t even whether this sort of thing is making our world even worse to live in, so much as it is, what do we do about it?

Granted that years ago a prank of this type couldn’t possibly be disseminated to dangerous recipients around the globe, years ago we didn’t have the resources to identify, track, report and defeat such outrages, either. Measure and counter-measure have evolved together, as they always do, and if the reach and impact of idiots like the offender in our story have grown, so have our abilities to fight them. The real question is how do you propose to prevent this sort of thing? We’ve established that governments will never be able to regulate the content floating around out here in cyberspace, and that means that there’s really no way to guarantee that someone can’t post prank ads somewhere, anymore than you could patrol every public restroom in the world with a rag and a bottle of solvent. With proper education (and vigilance) we should be able to keep anyone from getting hurt, but that’s still one more thing to worry about in an increasingly hostile new world…

So is our world actually getting any worse? Personally, I doubt it; I’ve often said that the world is getting more complicated, not necessarily better or worse. Unless somebody can actually show me that the percentage of idiots in our midst is actually rising, I have to conclude that the more things change, the more they remain the same. Even if it means that we’re going to have to invent the electronic equivalent of self-cleaning latrines…

Flying Sideways

We’ve often spoken of lateral thinking in this space, although I don’t always call it that. Any discussion of competitive advantage in business – certainly any discussion of strategic management or organizational theory – will eventually include the concepts of creativity and innovation, and why having a sufficient amount of each is critical to the long-term survival of the company. What often surprises people – even people who should know better – is that the goal here isn’t having as much of each as you can possibly get in every department and work group of every commercial enterprise. All forms of innovative thinking introduce uncertainty into the calculations of running the firm, and uncertainty is inherently difficult to manage; this is why so much of the early work in Scientific Management was focused on making a company as mechanistic – as automatic – as possible. Consequently, the more common problem is getting management teams to show any creativity at all – despite the fact that sometimes the answer is as simple as just not booking certain seats on an airliner…

A story being reported by the Globe and Mail Online brings us the case of WestJet, a Canadian airline that was facing the interesting problem of wanting to transport passengers to destinations in Hawaii, but lacking the long-range aircraft necessary to do so. At the same time, the carrier was also seeking new ways to add value to its tickets, as most airlines are currently doing, because of the falling revenues in that industry. Ordering new, longer-ranged aircraft (like the 767 or 787 from Boeing, or the equivalent Airbus) would cost a small fortune and cause a delay of some years – by which time any current demand for travel from Canada to Hawaii would almost certainly have been absorbed by other carriers. But all of the company’s current aircraft were medium-range machines like the Boeing 737, which doesn’t really have the range for the Calgary to Hawaii run. Which meant either increasing the airplane’s designed range – or lightening its load…

Which led to the rather clever scheme WestJet is proposing, of leaving some of the middle seats empty, effectively creating a premium economy class, where passengers willing to pay a small premium (they’re thinking about making it $20 US) would be guaranteed of having an empty seat next to them. The lower weight requirements should lower the plane’s fuel consumption enough to cover the extra distance, but such a program would not require any modification to the existing fleet, let alone the acquisition of additional aircraft. Unlike the introduction of a Business Class section or even an Enhanced Coach Class section (more room between rows of seats, for example), such a program wouldn’t cost anything to set up; the same aircraft could even be used at full capacity on shorter runs when not needed for the flight across the Pacific…

Whether or not the relevant government authorities will approve this scheme remains to be seen, of course. And there’s no word yet on whether WestJet will keep the prices for this new class of seating down to a pittance level (to attract more customers) or if other carriers will try it simply as a means of increasing value to the customer (providing more space in return for a higher fare. But for our purposes, it can serve as an excellent example of lateral thinking – and a reminder that some crazy ideas are also brilliant ones…