Tuesday, June 30, 2009

Too Bad

There’s been a news item swirling around the Internet for the past week about a new venture that combines extreme sports with big game hunting for the chance to do something more disturbing than most people will ever imagine: pirate-hunting cruises off the horn of Africa. The story goes that a group of Russian entrepreneurs got their hands on an unwanted cruise ship, outfitted it with lots of extra lights to make it easier to locate at night, and hired a bunch of ex-special forces troops to be the security detachment. They will then take passengers on a cruise up and down the Somali coast at about 5 knots, trolling for pirates. To make this more interesting, passengers will have the option of renting a variety of firearms by the day, with ammo provided at cut-rate prices. They promise that the ship will be attacked by pirates, or your money back. Alas, if only it were true…

Even a quick glance over the web site put up by this alleged business should tell the reader that there’s something fishy going on. There’s no contact information, no way to communicate with the “company” whose site you’ve located, and no way to order anything from them. In fact, there’s no information about the company, the people behind it, or even the boat you’re going to be riding on. There are also a few other minor points – the assault rifle ammunition is priced at less than 20% of what actual ammo for those weapons would cost, and the .50 caliber ammo is priced at less than 10% of what that costs; the legality of such a venture is highly questionable; how on Earth would they get financing for this, let alone insurance? – but none of these are quite as immediate as the question of who in their right mind would take these chances with either pirates attacking an un-armored, unprotected target like a cruise ship, or a bunch of un-trained civilians with automatic weapons and grenade launchers running around on their boat?

Some of you may remember a similar Internet business hoax from a few years ago, called Penguin Warehouse, which also purported to be an actual online business selling live penguins direct from Antarctica (and other points south where they have penguins) but was actually just an exercise in website design. Here again, the hoax became obvious when you realized that there was no way to contact the company or give them money, which would rather defeat the purpose of having an e-commerce site, if you think about it. The fact that the United States and most other countries have strict laws about importing exotic animals and owning one, none of which were even referenced by this site, would just have been confirmation. Which didn’t keep thousands of people from being disappointed when they realized this site was a hoax…

Personally, I’ve always been amazed that someone doesn’t try using sites like these as part of an Internet scam, like the famous (I hope!) Nigerian bank scams. All you’d need would be an off-shore account and a PayPal set-up, and you could easily take “deposits” for pirate-hunting cruises, live penguins, or any number of other things that people would be so delighted by that it wouldn’t occur to them to doubt the legitimacy of the company until it was too late. Of course, there are a lot of Internet scams that function exactly that way already, and it’s probably only because the Nigerians don’t really understand the American mentality that we haven’t seen more of this sort of cyber-crime. Which means that as soon as this story percolates to some of the seamier parts of the Internet, we probably WILL start getting spam about pirate-hunting cruise offers…

Maybe I’ll invest in some of that new anti-spam software – or even the companies that make it. From where I’m sitting, it looks like the demand is about to pick up…

Monday, June 29, 2009

Good To See

I’ve mentioned from time to time that bad management practice offends me on a professional level – and I’ll admit that bad business practices in general make me wince. Goodness knows, I’m no all-knowing oracle in matters of business, and even if I do make it to the top of my new profession, I will never pretend to have all of the answers once my dissertation defense is over with. But there are some things so obvious, so completely elemental, that any average six-year-old child would be able to explain to you why these practices are wrong – and I have on occasion recommended to people that they go find an ordinary six-year-old and ask him or her that exact question. People who have been reading these rants for a while now will recall that I also like to take note of people who are doing something the right way, and another one of those times happened last week…

A group of us were having lunch at one of the small restaurants adjacent to campus on Grand River Avenue, when a very large group of customers started piling in through the door and queuing up in the ordering line. It’s one of those places where you order your lunch at the counter, pay for it at the register, and then they bring it out to your table when it’s ready. Because this place features real food – prepared to order, with the hot food being cooked in a wood-fired pizza oven – there can be a bit of a delay before you get your order, but we still go there because the food is so much better than anything you can get by hollering into a clown’s head. And after all, a short wait time isn’t everything. Unless, of course, 30 or 40 conference participants have just come piling through your door and the line to order is now extending all the way across the (rather long) room…

It’s the off-season in East Lansing – the majority of the students are gone for the summer, and the town is about half of the size it is during the school year – which makes it unusual for parties of 30+ to show up in a restaurant. These folks were all wearing the same style of temporary name badge either on lanyards or pinned to their clothing, however; clearly participants in some conference or meeting somewhere nearby that had not included lunch in their budget (or agenda). With the line now well over 30 people deep, and the staff needing a minute or two to process each person through the line (and a few more to make each meal), things were looking grim. Apparently the manager on duty thought so, too, because a few minutes later I noticed one of the restaurant staff walking up the line with a Buffalo-chicken pizza, right out of their oven, offering small samples to anyone in line who wanted one.

I turned to one of the other people in our party. “Good idea,” I remarked. “That should keep people from getting quite as irritated by the wait.”

He nodded. “It should also make them hungrier,” he agreed. “When they get to the front of the line they’ll be in the mood for a nice, savory pizza instead of a little salad or a bite of pasta.”

I’ll admit I hadn’t thought of that angle, but not surprisingly, the Professor was right. The people in line were settling down, looking and sounding happier, and when they got to the front of the line several of them did purchase large meals (like the personal pizzas) – although it must be conceded that we don’t know what these customers were going to purchase in the first place. Still, if that one pizza’s worth of customer relations gesture kept even a few people from the conference group from giving up and going elsewhere to forage for lunch (which it obviously did; I don’t think I saw a single one of those folks leave) then it was an excellent example of both business development and public relations at virtually no cost at all…

It’s nice to see people who are actually getting it right, and not just because it improves the odds that they will get YOUR order right, as well. Maybe we’ll go back there again this week…

Sunday, June 28, 2009

The Ethics of Team Building

Since the subject has come up a few times, I thought it might be interesting to take another look at the ethics of Team Building exercises as commonly practiced in the United States. Like most concepts developed in the Human Resources side of the field, most of these have come to be viewed with a rather jaundiced eye by veteran employees. There's a real temptation to see such exercises as more Stupid Management Tricks - things that only come up because some senior manager read a book about building better teams and decided to try one of the ideas from the examples section in the back. Or worse yet, things that are only being implemented because some idiot at Headquarters decided to take the money that would otherwise have been spent on bonuses for this year and hire some idiot consultant, who made these idiotic suggestions. Which management now has to use to make it look like they got something useful for their money...

Certainly, anything that requires the employees to give up any of their own resources (time, money, etc.) in order to make your business more profitable is not likely to be well-received, nor should it be. More to the point, it's not an ethical choice. Even if you think a company softball league (or bowling team, or whatever) is going to be a fun activity that also brings people together and improves their teamwork, if you are requiring your people to take time away from their lives and families (or, worse yet, requiring them to pay for facilities rental and equipment) you are effectively making them pay for your improved performance. Making these activities voluntary and providing company sponsorship to cover league fees and basic equipment changes everything, making this exercise into a perk instead of an onerous requirement - and helping to identify the team players in your organization from the lone wolves...

I'm also opposed to requiring public performance from people who don't enjoy performing in public. Studies have repeatedly shown that people are on average more afraid of public speaking than they are of dying - requiring people to do something they'd rather die than experience is not a good management decision, and here again, requiring them to practice OR perform on their own time is not an ethical choice. Here again, making these activities voluntary, or combining them with a company activity held "on-the-clock" can change the entire situation. But in both cases, people will argue that even having such activities is unfair to those who can't play sports, are too shy to perform in public, don't have the time or the stamina or the nerve, or whatever. How do we accomplish these same goals in a way that is completely inclusive?

Sometimes the best ways are the simplest, of course. I've seen team-building exercises that were as simple as a contest to see which work group could have the fewest on-the-job accidents, or turn in the most assignments on deadline. If that's still too much to the company's benefit, you could resort to buying lunch for the crew, or the "no-ranks" conversations I've mentioned previously, or just having regular meetings where the employees are encouraged to present their concerns and get real (unrehearsed) answers in real time from the management team. But the bottom line question is always going to be the same one: is it ethically correct to require the employees to expend time and effort in order to make the company more successful? Does it matter if they are getting paid to perform the exercises? What if they are given higher raises in return for higher performance made possible by the exercises? And what if they are all stockholders (as part of an employee stock-purchase plan) and therefore benefit directly as well as indirectly from the higher performance?

It’s worth thinking about…

Saturday, June 27, 2009

The Grad School Diaries: Frost’s Hypothesis

“The woods are lovely, dark and deep,
But I have promises to keep.
And miles to go, before I sleep;
And miles to go, before I sleep…”
-Robert Frost, American Poet

All right, it’s hardly an original thought; it probably never was. Ever since I first encountered the poem I’ve suspected that somebody knocked off those lines the day after Frost wrote them, and probably at least once each day since somebody else has stolen them for some purpose or other. The thing is, that does not make the original words resonate any less clearly, or lessen what they mean to those who remember them somewhere on a long road to who knows where. The lines give meaning to every seeker who encounters them and understands their subtle implications, and are not diminished thereby. Which probably says more about poetry and legendary poets than it does about me…

Physically, of course, I’ve been more fatigued than this, but when you add together the toughest mental challenge of my life with a moderate rhinovirus and enough stress that I’m barely sleeping and edgy all the time, I don’t know that I’ve ever felt as tired as I do right now. But I can’t slow down now; the end of this week brings with it our methods midterm, and if I had another 18 weeks instead of just 18 hours, I still don’t think I’d be ready for this exam. It’s an intricate subject to begin with, and my middle-aged man’s memory is no help. There have actually been a few times over the past couple of months when I have actively questioned if this “drink from the fire hose” approach is really the best way to teach this subject – but I know the question is irrelevant. That’s not the point…

As previously noted, this process is intended to be transformative as well as challenging. Those of us who pass through it successfully are going to become keepers of the collective wisdom for the profession of management; everyone who can give his or her title as “professor of management” is going to be considered an authority on the subject, to some extent, by some people, no matter how full of crap they actually are. Part of this process is about character; about having the integrity to do the right thing even in the toughest times, and not whine about it. If you can’t trust us to take on a difficult class, learn all of the things required for a passing grade, and be ready on exam day without resort to any of the various Stupid Undergraduate Tricks, how on Earth will you ever be able to trust us to lay down The Truth about any subject to a class full of innocent students?

The point here is that while Research Methods is a critically important subject, and our Instructor really is trying to compress several years’ worth of class work into a single 16-week semester, this isn’t just a test of research methods; it’s also a test of us. We’ve been handed a bag of snakes; the real test is what we do with the bag…

The other thing to keep in mind is that everyone who has ever had the letters Ph.D., M.D., D.D.S., D.V.M., or J.D. added to the end of their name has faced a similar or identical test. Sooner or later, everyone who attempts to reach this level of knowledge is going to find him or herself on this cold and lonely road, and whether or not they will ever achieve the doctorate they seek depends, at least in part, on the ability to press on when every impulse in your body is yelling at you to stop and rest. I’m not sure what Robert Frost would have made of this voyage, if he was here to see it, but his hypothesis, clearly enough, was that anybody can do things the easy way; character comes at a higher price. If you want the respect of those future students, the admiration of all of the other middle-aged people who wouldn’t dare attempt this passage at our time of life, the authority of being a keeper of the tribal wisdom, and those three magic letters after your name, you’ve got to keep going…

I have promises to keep. And a lot to get through before I sleep. If I ever do…

Friday, June 26, 2009

Changing Times Part I

Over 30 years ago, Steve Martin was the host on Saturday Night Live and he did a short monologue called “What I Believe” which I still quote as often as possible. One of the best lines in the routine, certainly one of my favorites, is “And, people say I'm crazy for believing this, but I believe that robots are stealing my luggage.” It got a big laugh. Back in the 1970s robots were still mainly science fiction; there were a handful of assembly plants using industrial robots, a few very primitive robotic spacecraft had been launched, a small number of drone vehicles were being developed, but for the most part automation was still limited to building computer systems into existing machinery (like a programmable thermostat) or developing specialized equipment to fulfill a specific function (like a washing machine). The general purpose robots that could wash your clothes or dishes, go adjust the thermostat when it’s too warm in the room, or run into the Baggage Claim area and make off with your suitcase, while much beloved of Science Fiction writers, hadn’t (and still have not) appeared…

Continuing the theme of specialized, rather than general, cybernetic workers, we now have specialized software that can riffle through the Internet, either to find content of a specific type or just locate places where many people are posting comments, and then deposit ads promoting your business. These are often referred to as “robots” (although there are a number of less complimentary slang terms for them, such as “spam-bots”) by the community, which evokes the image of a human-shaped machine sitting at a computer and dutifully entering address after address, looking for comments sections and discussion boards on which to post its ads. It’s a silly thought, but these programs actually bear the same resemblance to that imaginary web-surfing robot that automated control systems bear to the humanoid robots of golden-age science fiction: cheaper, more efficient, and they don’t require huge quantum leaps in technology. But most Internet users pay about as much attention to them as we do to the thermostat…

And so did I – until one of them turned up in my comments section. After my post on Wednesday about the flooded cars in Ionia, I got a comment from these folks saying that they were featuring my post on their site, and I should feel welcome to send them any of my future postings. I checked, and the first two paragraphs of my post are indeed on this site (it’s on the Direct Car Insurance page), along with a link to the blog for Wednesday. In fairness, I can’t actually say if the folks running this web site found my blog using a robot, or if the comment was posted by an automated system; it could just be a “form letter” email that they use because of the volume of sites they visit. The point I’m going for here is that even 20 years ago, the idea of a “robot” increasing your readership would have been pure science fiction, had personal web pages or blogs existed at the time…

It’s always a mistake to try to predict the technology curve; it’s what gets you “Star Trek” episodes set in the 24th Century with computers slower and weaker than the one presently clipped to my belt. And I’m not saying that 20 years from now you’re going to be solicited by robots that will carry on personal conversations with you, sell you products, deliver them to your house, assemble anything that needs assembling, return every six months to perform routine maintenance, and exchange Christmas cards with your family. I’m just saying that you really shouldn’t be surprised if all of that does happen…

Thursday, June 25, 2009

A New Rule?

I don’t study Marketing as a discipline, although I’ve learned a few things about it between the MBA program and working with some of the Marketing students here at MSU. Thus I’m not really sure if it’s fair to have a specific Rule of Business just for marketing campaigns; the Second Law (e.g. “Don’t annoy the customer!”) already applies to advertising activities that are so annoying that no one in their right mind would ever do business with your company, for example. What most people outside of the business community may not realize is that Marketing is a scientific discipline that involves extensive mathematical modeling designed to determine what specific elements of our society will do in response to specific documents, audio/visual programs and other information; advertising is just one of the instruments used to achieve the results the marketing people want. However, that still doesn’t explain why anyone thought the “Freaky King” ads for Burger King were a good idea…

According to an online story in The Atlantic Magazine, the ads (print and electronic media) which feature an actor in a plastic costume portraying the eponymous Burger King character have not allowed the company to keep pace with the industry leader (McDonald’s), and have actually coincided with a measurable loss in market share. This does not suggest that McDonald’s is actually taking market share away from Burger King – there are many smaller players in the market who may have taken some or all of the lost share – but McDonald’s sales have been growing at twice the rate Burger King has managed during the same period. Which suggests that while the competition’s advertising has been neither as distinctive nor as innovative as the Burger King offerings, they appear to be more successful in terms of both market share and sales growth…

Now, it’s certainly possible that without these ads the company would be faring even worse in the market; we should acknowledge that the Freaky King ads are defiantly memorable, and that having people talking about your advertising in national publications (even if they are saying bad things about it) is always better than people not being able to remember your advertising. We should probably also concede that most people do not make purchasing decisions about fast food on the basis of advertising anyway; we’re more likely to go to the restaurant that’s on our way than to the one with the best television commercials. Brand loyalty is difficult enough to generate in products with highly differentiated features (Apple vs. PC or GM vs. Toyota, for example), whereas one cheaply-made hamburger functions pretty much like any other cheaply-made hamburger to the average consumer. Which is what gives rise to promotional tie-ins, games, contests, give-away items, and advertising mascots…

It’s also possible that the whole campaign is intentionally being made to be bad, creepy or disturbing, in what is essentially a self-referential joke – saying, in effect, that all fast-food advertising is stupid and creepy. McDonald’s uses a clown mascot, Jack-in-the-Box uses an actor with a plastic headpiece over his head, Taco Bell has used a number of disturbing images over the years (a man in drag, pretending to be pregnant in order to smuggle nachos into a sporting event under his dress, being the most recent example), so why not combine all of these elements into a single, creepy, revolting image? Sort of the advertising equivalent of a gross-out comedy movie, right? The only problem is that for every successful gross-out movie, there are a dozen more that are panned by the critics, blasted by various civic leaders, and quickly removed from public view. Which makes this a questionable model for an advertising strategy…

In the long run, while it would be amusing to issue pronouncements such as “Don’t select advertising figures that creep people out” or “Strategies that work in one medium (e.g. movies) may not work in another (e.g. advertisements)” I think I’ll just repeat one of my long-held points of faith: do not assume that just because you don’t understand something it must be simple. Oh, and don’t get your information on specialty subjects from people who leave comments at the end of online articles – or bloggers…

Wednesday, June 24, 2009

And the Creek Don’t Rise

There was an interesting question that came up over the weekend regarding who should take responsibility for an expensive (but not particularly dangerous) natural disaster. I’m not sure if it’s really a question of ethics, apart from the obvious issue of taking responsibility for one’s actions, but in this case it’s not clear if any one person (or agency) was responsible, or if this really is one of those occasional “acts of god” so beloved of the insurance writers. Here are the facts as reported by the local media:

On Saturday the 20th, heavy rains in western and central Michigan caused the Grand River to rise, and eventually overflow its banks near the city of Ionia. As a result, a field by the side of the river, which was being used as a temporary parking lot at a music festival hosted by a local radio station, was flooded, and something on the order of 1,000 cars were partly or fully immersed in the water. The best guess is that it will be until Wednesday (e.g. today) before the ground dries out enough to remove the cars, at which point the question of which ones are reparable and which ones have been totaled by the water damage will come into play. Keep in mind that immersion in water will generally cause more damage to a car’s interior and power train systems than the book value of the vehicle, which means that anything that was submerged to the cabin level is probably a write-off…

The obvious question is whether the flooding could have been prevented. There is a dam that crosses the river just above the festival site, but it’s what’s called a “run of river” dam, meaning that it has no flood-control properties and no flood basin or flood channels to contain or re-direct the waters. In fact, the dam’s owners are only licensed to use it as a hydroelectric station; the Federal Energy Regulatory Commission (FERC) would not have permitted them to try to use the dam to intervene, even if it had the capacity to do any good, which it didn’t. Flooding along the Grand River is actually an annual event when the local snowpack melts; the reason there aren’t any permanent structures on that site is that those fields are covered with water and mud every year when the river hits flood stage. It’s just that those floods normally happen in the spring…

As such, the question of who is to blame becomes a little murky. The power company that owns the dam couldn’t have intervened if they’d wanted to, but what about the festival organizers? Should they have been aware of the flood risk? Should the radio station which sponsored the event take responsibility? What about the government agencies that issued permits to hold a festival on that site and use that field as a temporary parking lot (state, county or city)? Or should the people who parked their cars next to a river on a summer day when there were violent storm cells in the area and the National Weather Service had already issued a flash flood warning for the area call their own insurance companies and hope for the best?

Almost as difficult a question is how much each person should be paid to replace their car, assuming that someone is going to. Just giving each owner the Blue Book value of their car won’t enable them to replace it; most cars don’t retain a book value of more than a fraction of the purchase price, and in many cases the book value will be less than what the owner still owes on the purchase. But purchasing new cars for everyone involved isn’t practical either; the Federal Trade Commission reports that the average new car in America costs $28,400 – that would be $28.4 million to replace all 1,000 cars, and while that would be good for the local economy (assuming the replacements were all manufactured and sold locally) I’m not sure who around here has $28.4 million just lying around…

So who’s to blame for this fiasco? The festival promoters, the festival sponsors, the local government that issued the permits, the local government that DIDN’T put a flood-control basin on the Grand River, the state/Federal government that didn’t shut down the festival because of dangerous weather conditions, or the people who didn’t think twice about parking next to a river during a flash flood warning? Even more to the point, who should pay to clean up the results? Keep in mind that if any of the government agencies or private (tax-paying) companies involved end up footing the bill, the person who is going to ultimately pay for this fiasco is the taxpayer – e.g., you…

It’s worth thinking about…

Tuesday, June 23, 2009

Genius in the Air

There are times when you just have to stand in awe of the sheer genius being displayed before you; when you realize that you are in the presence of greatness. I’ve seen Nolan Ryan’s fastball, Michael Jordan’s floating layup and Wilt Chamberlain driving to the hoop with my own eyes; I’ve heard Bruce Hornsby, Joe Walsh, Steve Howe, Yo-yo Ma, Itzhak Perlman and Billy Joel play in person; I’ve even spoken with at least one of the gods of my own discipline (it depends on how you define “gods” and how you define my discipline). But nothing could have prepared me for the latest development in the airline industry: United Airlines is now charging passengers a fee to pay a fee…

In a story which broke over the weekend, the Associated Press online is reported that United Airlines is now charging passengers a $5 service fee if they want to pay the (already preposterous) $15 checked bag fee at the time they arrive to check in for the flight. The airline explains that if you pay the checked bag fee in advance (either when you buy your ticket or at any point prior to showing up at the airport) there’s no extra charge; they’re calling this an “online discount.” To someone who was not sure if they’d be checking bags at the time they bought the ticket, however, the upshot is a $5 fee which they are charging you to pay them a fee for something that was included in the price of your ticket just two years ago…

Of course, the same article points out that United is still way behind some of the other airlines. Ryan Air, for example, is charging its passengers 5 Euros (about $7 US) to check in online, and twice that to do so in person at the airport. AirTran charges extra (up to $20 extra) for “good” seat reservations, like exit row and bulkhead seats, and one of the Spanish airlines is charging a fee for ANY reserved seat – and if you are willing to go to 30 Euros extra ($42 US) they’ll sell you an aisle seat and guarantee that the middle seat next to you stays empty. And there is already talk of fees for carry-on luggage, since more and more travelers are avoiding the checked bag fee by just packing larger and larger bags into the overhead compartments…

So far the market resistance to these increases has been hard to distinguish from the mass of other negative economic news that has been affecting the American economy, but it is worth noting that travel of all kinds is dramatically lower than it had been, and as air travel becomes more expensive and less enjoyable people are apparently looking for other ways to get where they are going, or just not travelling unless they absolutely have to. As a side effect, alternate transportation projects (high-speed passenger rail, for example) are finally starting to draw investor attention, and if an viable alternative to air travel does emerge over the next few years, the cycle of decline now hitting the airline industry could easily snowball. In which case, we have to question if fees on top of fees is really the optimal strategy…

Is it possible for the airlines to pull out of the tailspin they’ve gone into and start making a profit once again? It seems to me that providing a reliable service at a reasonable price while creating a minimal amount of discomfort and aggravation for your customers might work; it certainly has for Southwest Airlines and the handful of other companies that have tried it. But I wouldn’t really know. I’m not a genius, you see…

Monday, June 22, 2009

You Can’t Be Serious

A few days ago I mentioned my experiences with MLM recruiting during the last few economic crises, but in rechecking that post I see I’ve left out the best story of all; the company whose very concept was so stupid that it bears repeating. I’m going to ask you all to believe that this story is true, but I won’t be offended if you find this too much to accept. I almost couldn’t believe it was happening at the time, and I was there…

In the last years of the previous century, I was looking for work (yes, again!) in Los Angeles, and another sales/management ad caught my eye. I knew that most of these were low-percentage possibilities, but I didn’t feel I had much to lose by checking them out. So I called in for an appointment, sent them my resume, and eventually found myself driving to Westchester, near LAX, to meet with people about a fascinating opportunity in the travel industry – or so they assured me it was…

On arrival, I knew almost at once that the whole thing was a bust – there were two other people in the waiting room, and we were going to be going through the “first round” interview as a group. This isn’t always an indicator that your potential “employer” is going to try to fleece you like a flock of sheep, but it’s not a good sign. My already dubious view of the proceedings took a definite nosedive when we were ushered into the “interview room” and found enough seats for forty or fifty people, in rows facing forward. But I didn’t have anything else to do that afternoon, so I waited to hear the pitch. In a sense, I’m glad I did; this isn’t the first time I’ve gotten a few good laughs out of this story…

It turns out that this company’s “business opportunity” was that they would teach you how to be a travel agent. They didn’t offer classes in any of the relevant topics, however; you could get those from the local community college for under $100 at the time anyway. No, what they were offering was a series of audio tapes that would teach you how to be a travel agent. Once you completed the course of tapes, you would be given the right to fax orders into their headquarters, where their agents would handle the rest of the process. For the tapes (and the right to give them lucrative travel bookings) they required a mere $800. If you wanted the deluxe course, they would sell you the same information on VHS tape, along with demonstrations of how to dress, talk, act and sell products like a genuine travel agent, all for only $2,300 – and back then, that was a lot of money…

But the truly over-the-top part was the ID card. As part of either taped lesson package, you would also receive a plastic identification card with your name and the words “Travel Agent” embossed on it. The “interviewer” claimed that you could use this card to obtain the “special secret industry discounts” that allowed actual travel agents to travel the world First Class for effectively no money. He suggested that even if we never made a sale (and received our insultingly tiny cut of the proceeds) for their company, the card was still going to be worth more to us, in the long run, than the tape set (which was more money than my rent) or even the VHS tapes (nearly 4 times my rent)…

I’m not really sure how naïve you’d have to be to believe there was any such thing as “special secret industry discounts” in the first place, or how much more simple-minded you’d have to be to believe that all you would need to access such things was an embossed card that said “Travel Agent” in friendly gold letters. But apparently there were people that naïve in Los Angeles at the time, because I read a story in the paper about the folks behind this particular scam being prosecuted for fraud less than a year later, and they had apparently managed to bilk enough people to actually generate some public outcry. I’m also not sure where these people were on that day in grammar school when they taught us that something that sounds too good to be true usually ISN’T true…

The really sad thing about this whole scenario is that wasn’t actually the worst scam “business opportunity” I’ve ever stumbled across. But that’s a story for another day…

Sunday, June 21, 2009

The Ethics of Perspective

Let’s try this one as a hypothetical: suppose you had taken your kids to McDonald’s for Happy Meals, and when they got to the bottom of the bag, the cheap plastic trinket being offered as a premium with your purchase was a cartoonish representation of a self-proclaimed genocidal maniac who barely avoided courts-martial for mass murder, mutiny and gross dereliction of duty because he and his personal command were finally caught and slaughtered by the same people they had been victimizing. Would you be outraged, demand your money back, take the story to the media, make contact with national advocacy groups, stage active protests?

Now suppose that you saw an article online about some people who received a cheap plastic trinket in the shape of a character from a children’s move and were so incensed by its very existence that they raised a huge media circus and began making plans for national protests, on the basis of the toy’s racial and historical insensitivity. Would you find our where and when these rallies were being held, so you could go and show your support? Or would you think to yourself, “What difference does it make? It’s just a Happy Meal prize, for crying out loud! Why does everyone have to take offense at every possible thing?”

If you’ve been reading these posts for more than a few days, it probably won’t surprise you to learn that these events are one and the same, stemming from the same news story. According to the account published by the Missoulian online site, one of the Happy Meal prizes being given out as part of the “Night at the Museum II” tie-in promotion is a depiction of Lt. Colonel George Armstrong Custer, riding a motorcycle. This has outraged a number of people in the Native American community, and the executive director for the Society for the Advancement of Native Interests has compared giving out these toys in areas of the country that have significant Native American populations to merchandising an Adolf Hitler action figure in Israel. It probably doesn’t help matters that there’s a famous type of motorcycle called an “Indian,” and the bike the Custer figurine is riding bears some resemblance to one…

Now, a lot of people are pointing out that the figurine isn’t intended to represent the actual George Custer; it’s the character from the movie, effectively an effigy of Custer which is magically animated at night in the movie. The effigy doesn’t appear to know any more about the real Custer than the folks at McDonald’s do, and therefore it behaves as a courageous (if somewhat dim-witted) hero rather than a genocidal racist. It has also been pointed out that given the many social problems the Native American Nations face in real life (not least of which is ONGOING genocidal racism), expending time and energy on an event this insignificant seems a bit misdirected. But as far as I can tell, none of the people raising these objections had any of their lineal ancestors murdered by Custer or his men…

I’m going to leave the issue of whether the inclusion of the Custer effigy as a positive character in the movie is an outrage or not to people who know more about movies, racism and Native American Affairs than I do; I’m also not going to debate the obvious suggestion that McDonald’s and the licensing company making the figurines should probably have just selected another character and avoided this whole controversy. My question here is, does McDonald’s have an ethical responsibility to make sure that nothing offered as a Happy Meal prize could possibly offend any of their customers or have a bad influence on the minor children of those customers? Should the company demand creative control over the (3-D) images used in these product tie-ins and discard anything that might offend someone? Or do they have a responsibility to present images (and characters) from the movie just as the film makers intended them to be?

In effect, should McDonald’s be censoring some minor element of the film for fear of angering a specific element of their customer base? Or should they be upholding the First-Amendment rights of the filmmakers (and their contract) and just offering to provide an alternate Happy Meal prize to anyone who is offended by the Custer figurine? Would that answer be the same if there was a Genghis Khan action figure? What about Hitler, Stalin, Ivan the Terrible, Slobodan Milosevic or George W. Bush?

It’s worth thinking about…

Saturday, June 20, 2009

The Grad School Diaries: The USO Protocol

It’s probably a good thing that we already had our improvised, home-made, self-directed study group set up and meeting regularly before we found out about the department’s annual Holiday Party, and the traditional entertainment that is slated to go on there. Because, you see, the primary entertainment is us. If you thought we looked like a flock of sheep before…

Well, actually, we probably look more like deer at the moment – staring into the headlights of an oncoming truck, of course. None of us are exactly shy – we’re training for a career that involves standing at the front of a classroom or lecture hall every day for the rest of our lives with dozens (or possibly hundreds) of eyes fixed on us. But let’s face it: if we had wanted to be entertainers we’d have studied drama, music or dance, not management…

No one has been willing to explain WHY this is a requirement, either; they all just seem to regard it as one of those quaint school traditions, like the all-male productions of Gilbert and Sullivan light opera the Ivy-League schools were so notorious for a generation ago. I’ve never grasped what, exactly, was the point of requiring undergraduate men (who aren’t drama majors either) to dress up in drag and sing falsetto, but at least in our case you could imagine that the whole thing is supposed to be a team-building exercise. Although, if you want the truth, I can’t help thinking that it’s a better example of how team-building exercises can annoy the crap out of your employees than anything else…

So why am I being such a grouch about this? Well, partly it’s because I’m already weeks behind where I should be in my studies, and even the best of our cohort are feeling the pressure as our first semester closes in on Midterm. This exercise is going to suck down time I don’t have for an exercise that has already been rendered redundant by the very meetings in which we are going to plan out our program. And I kind of resent the implication that we’d be simple-minded enough to fail to understand the need to work together as a cohort for our mutual benefit…

Part of it is just that as a team-building exercise, it’s pretty weak; I could name you a dozen other possibilities that would have the same (or better!) effect for much less investment of time and effort, not to mention potential public embarrassment. But all of them would require the expenditure of time, effort, or at least money on the part of the powers that be; this at least has the advantage of being something you can just order the incoming doctoral students to do and forget about until the party. Which makes it weak from a leadership standard as well…

But mostly, I think, it’s because making people do something and refusing to offer a single word of explanation offends me on a professional level. Making a bunch of insanely busy people give up time from their studies, take time away from their families, lose sleep, and devote their energies to serving as your own personal USO troop is poor management practice, plain and simple. Even with the best intentions in the world (and we can only hope that this has been ordered with the best intentions in the world) it’s a poor choice; if this wasn’t intended as a team-building exercise, then it’s something far worse…

Power imbalances exist anywhere hierarchical organizations do; even the best managers in the world enjoy a certain amount of special advantage because of their position, and the really good ones try to keep in mind that no matter how hard you try to just be "one of the guys" you can't have an equal relationship with people you can fire at will. Most states have laws to prevent the more disgusting abuses of power, and most employees can at least exercise their traditional right to "vote with their feet" and go get another job. Once of the last places left where those rules do not apply, strangely enough, is inside the very institutions where people study power imbalances and social justice issues: schools just like this one. None of us can refuse this assignment without facing a very real chance of being pitched out of the doctoral program, and none of can walk away without facing a near certainty of never getting another job in academia...

Unless that's the whole point, of course. As I've said before, this program is as much an apprenticeship as anything else, and there are some things you can only teach people by example. If we're going to have to deal with this same mentality in our future lives as professors - and we will; I've heard our own faculty speaking of "hazing" practices that extend all the way up to full professors and department heads - then our teachers would be remiss indeed if they didn't incorporate such an element into our training. It's a subtle point - and I doubt if all of the people who are looking gleefully forward to our performance at the holiday party grasp it - but this, too, is something we will have to master if we want to make it in our new profession...

It's another reminder that being a Ph.D. is not like being an MBA - or the manager of a business. In a business school program you'd never do such a thing, and in an actual business there would be a very real chance of lawsuits, discrimination complaints, and loss/non-retention of critical personnel. For us, this is just another part of the process. In my future career as a management professor, two of the things I want to do are show people a better way to lead a team and build better cohesion - and make sure they never run this sort of risk just because they think it sounds like fun. And I will...

But first we've got to come up with something to do at the Holiday Party this year...

Friday, June 19, 2009

And Yet Again…

I wasn’t planning on a follow-up to the post that ran on Tuesday of this week, but I stumbled across this story and just had to share it with you. It’s the same event, on the same airline, with the same cause, and the same comedy of errors resolution, although they don’t appear to have happened on the same day, at least. But somebody at Continental Airlines needs to have a serious talk with their Operations people…

In a virtual repeat of the Boston case, an 8-year-old girl flying from Houston to Charlotte (NC) was accidentally sent to Fayetteville (AR) instead. According to the story on the Associated Press online, the exact same scenario played out, with two regional jets boarding from the same gate at the same time, and the gate crew mixing up which aircraft was which when the unaccompanied minor was boarded. One might reasonably expect that after the Boston case Continental would have sent around a memo, or an email, or something, reminding its personnel that people are a little nervous about regional jets in the first place, and parents hate having to send minor children on airplanes unaccompanied, and don’t assume that this can’t happen to you, that’s what the poor bastards in Boston said…

Apparently, either they didn’t or the ground personnel in Houston are even more inept than their Boston counterparts – which is hard to accept, given that the company is headquartered in Houston. But regardless of how it happened, it’s a second occurrence and a third really bad public relations situation for Continental this year. It also provides us with a good example of how customer perspective actually works in practice…

Consider, for example, that Continental provides passenger service to a very large number of people each year. Suppose that out of the last million times unaccompanied minors traveled on Continental, these two are the only such cases; that the odds of any one minor getting put on the wrong airplane and sent to the wrong city are literally 500,000 to 1. To the families who were failed by the airline in this spectacular, news-gathering fashion, Continental’s record is still 0 for 1 – and likely to remain that way, since I don’t imagine either family is going to give then any additional chances. Some errors are just too much to accept, even one time, if you expect to retain your customers...

Now, by themselves these two families are not likely to have any serious impact on the company if they elect to use a different airline in the future. If they sue Continental, and if they recover anything of significance – which will be difficult, since there’s no real “damage” that has been inflicted on the parties involved – that will be another matter. Too many large punitive judgments and a struggling company in a beleaguered industry may not survive. But the real danger here is that if enough people get the idea that Continental Airlines is so completely oblivious that you can’t trust their commuter flights to get you where you want to go, or to avoid icing up and crashing short of the airport because their regional carrier crews are inexperienced and distracted, there will no longer be enough people willing to fly Continental at any price…

And that will be the end of them…

Thursday, June 18, 2009

How Much Extra for Thinking?

Since we seem to be on a roll with customer service mishap stories lately, I thought I’d go looking for one that demonstrates the central problem with the customer service function, and it didn’t take long to come up with one. According to this story in the Grand Rapids Press, a local Michigan amusement park is catching heat because they required a quadriplegic Marine veteran and his caregiver to pay full price for admission last week. The man’s family is raising cane, saying that as patriotic Americans we should offer free admission to this man in gratitude for the fact that he was wounded defending the country – and because he wasn’t going to be going on any of the rides in his condition, and such. While I understand their feelings, I think they’re missing the point…

A customer service representative (CSR) is usually the lowest level of employee in any organization, often given no particular training and required to have no particular skills. They are generally hired at minimum wage, especially in such basic public-contact jobs as selling tickets/taking tickets at the entrance to an amusement park, and frequently treated ever more abusively by their own managers than they are by the public. The turnover is horrendous, because any rational person will try to migrate into a better class of job as soon as possible. And yet, these bottom-level personnel may be the only members of your company with whom your customers have any direct interaction. A rude, inexperienced, or just incompetent CSR can completely destroy the company’s relationship with a customer – all because the company was unwilling to spring for higher wages (get a better level of employee) and more training…

In the case in question, the CSRs manning the gate had been given the company’s admissions policies, and told they were not to make any exceptions to those policies. This is generally the only way to ensure that the rules are applied even-handedly, to all potential visitors. Failure to do so might result in special discounts (or free admissions) being issued to one race of people but not another; to attractive members of the opposite sex but not to ugly ones (or those of the wrong gender), to people from one class, one religion, or one neighborhood but not the other, or to friends of whoever is manning the entry gate, but not strangers. Adherence to those policies is also the only way to avoid having dozens (or hundreds) of visitors each day insisting on free admission because they (or their companions) have cancer, heart disease, gout, glaucoma, diabetes, psoriasis, acne, MS, PMS, high blood pressure, irritable bowel syndrome, wool sorter’s disease, ticks, swine flu, ringworm, hemorrhagic fever, hypochondria, or a slight headache…

Obviously, exceptions to this policy are sometimes going to be necessary, if only to avoid the sort of media-driven outrage you’re seeing in this article (and about half of the comments about it). Personally, I’ve always felt that regular Veterans discounts are good for business anyway, but if that’s too difficult, you could always issue standing orders than anyone who has lost the use of three or more limbs while in service to our country shall be given a break on park admissions. But you can not, in reason, expect some poor jerk making minimum wage at the gate to sort out that policy on the spur of the moment. If you want people on those bottom-level jobs who are capable of making independent decisions, based on their assessment of the situation in logical terms, then you’re going to have to recruit them, train them, and give them the authority to do so…

Which is going to cost extra. Don’t kid yourself; people capable of functioning at that level are unlikely to take minimum-wage jobs, even during an economic crisis like this one, and if they do, they won’t stay on the job any longer than it takes to find a better one. The fact that public relations disasters like this one won’t happen as often will help make up the cost difference; you could also raise ticket prices or work harder at promoting the park (increase volume/sales), although you should probably do that anyway. But you can’t just expect an untrained, inexperienced CSR to put their job on the line and make a command decision that follows their personal ideal of decency but violates your written rules…

Wednesday, June 17, 2009

You Can’t Get a Chrysler in Detroit

It seems ironic, I know, but the above header is correct; the last Chrysler dealership left in the City of Detroit was closed last week as one of the 789 locations eliminated by the company during the ongoing “restructuring.” The Wall Street Journal article goes on to note that the city also has no national bookstore chains, no national grocery chains, and only 4 Starbucks left in a city of 900,000 nominal residents. We’ve all been hearing about the consequences of the ongoing economic crisis in the United States, and the possible implications for all of us if something isn’t done about it, but I thought this story really explains the situation in familiar terms…

Consider for a moment if you woke up one day and all of the major businesses in your home town had closed. You can make shift picking up some of your needs from local merchants, and you probably will, but if you want an new Chrysler or Dodge, you’re going to have to get in your present car and drive for an hour or so; likewise, if you want to shop in anything more extensive than your corner market, or obtain any number of other needs, they’re all out in the suburbs. It’s almost like the scenario Neil Gaiman proposed in the “Sim City” game series; of getting up one morning and realizing that the city has quietly gotten up and moved away from you during the night…

I’m not going to shed a lot of tears for the Chrysler Company; like the other American automakers they appear to have dug their own pit and jumped into it without assistance. And I’m not going to suggest that somebody should have “done something” about all of the other companies that have managed to run their operations so firmly into the ground that they’ve been forced to pull out of America’s 11th largest city and leave all of that revenue behind for local firms to snap up. What I’m suggesting is that if we don’t at least try to learn from the experience the poor people in Detroit are having right now, it could be our turn next…

So before it becomes impossible to get lobster in Maine, or pizza in New York; before they stop packing beef in Omaha or making movies in Hollywood; before the aerospace industry leaves St. Louis and Seattle, and the financial services people bail out of whatever spider-hole they’ve fled to during the bailout crisis, I’m suggesting that we all stop pretending that we’re the most powerful industrial and service economy in the world, that we can do as we please and nothing can ever go wrong, and start acting like the end of the world is upon us and the barbarians are at the gate…

Because if you can’t get a single Chrysler product in the Motor City, I’ve got to suggest that this is, in fact, the case…

Tuesday, June 16, 2009

Not Again…

This week brought us another one of those cases when there isn’t really much I can add to the story already being presented by the news services. But I’m going to tell you about it anyway; because it ties nicely into several other rants I’ve posted recently. According to a story by the Associated Press online, an unaccompanied minor flying Continental Airlines between Boston and Cleveland was accidentally sent to Newark, New Jersey instead. Apparently, there were two regional jets boarding at the same time from the same gate in Boston, and the airline personnel became confused about which airplane the 10-year-old girl was supposed to be on, and put her on the wrong one. The first indicator that there was anything wrong was when her flight landed in Cleveland, and the girl’s grandparents (who were there to meet her) realized she wasn’t on the flight; they immediately called the girl’s father, who then started demanding to know that the airline had done with his daughter…

As it turns out, the girl was just fine; she’d been sitting around Newark Airport while the airline called her grandparents (since that’s who was listed on her ticket as being supposed to pick her up) and told them to come and get the girl, apparently failing to notice that the telephone number and address for the grandparents were in Ohio. Unfortunately, no one thought to call her father (or the operations people in Boston, apparently), so when the father called the Boston airport it took the airline nearly 45 minutes to figure out what had happened. The fact that Continental had charged the family a $75 “unaccompanied minor” fee did not help matters (or the father’s temper); having charged extra to keep an eye on the girl, one might reasonably have expected the airline to actually do so…

Now, obviously this case isn’t an atrocity. Nothing untoward actually happened to the girl in our story, and while the actual resolution of the case hasn’t made the newswire yet, you have to figure that the airline will probably refund the “unaccompanied minor” fee and cover the cost of her ticket from Newark to Cleveland without any further prompting. There are two much larger issues raised by this case, however. First, there’s the rather large number of people who had to have failed to do their jobs, sequentially, for this to happen in the first place. The ramp agent in Boston did not get the girl on the right airplane; the crew on the correct airplane did not check to see why they were short a special passenger; the crew on the Newark plane didn’t ask why they had an unexpected special passenger; the crew on the ground in Newark didn’t think to call the girl’s parents and explain what had happened, and so on. And keep in mind that at least two of those failures are actually violations of Federal law…

Even worse, in my opinion, is doing this four months after another of your commuter flights has crashed, killing 50 people, because the flight crew failed to pay attention to their responsibilities. In the long run, it doesn’t matter if the crash wasn’t Continental’s fault, or if the girl in today’s story made it home safe and sound. All of those potential airline customers are reading these two stories, and considering if perhaps they should book their next flight with someone who spends just a little more effort on the details…

It’s an excellent example of how important your lowest-level customer service personnel can be – any Continental employee, even their lowest-paid airport worker, could have defused two-thirds of this situation with a single telephone call. It’s a terrific example of how you’ve got to get the little things right if you expect to get the larger things right – no one in their right mind is going to send an unaccompanied minor on Continental until this story dies down. And it’s an iron-clad example of how the U.S. Airline industry is destroying itself before our very eyes – all of the extra fees and crackpot “safety” measures in the world will not keep your company in business if the general public thinks you’re a bunch of clowns who can’t even make sure a child gets put on the correct airplane. Especially when they’re right…

Monday, June 15, 2009

It’s Who Calling, Now?

Over the years, I think I’ve been recruited by every multi-level marketing (MLM) organization there is; some of them multiple times. Amway has a special place in my memories, since one of my father’s secretaries was a huge Amway kingpin, and she must have asked me about joining the organization a dozen times all by herself, but I’ve also heard from people selling insurance, vacuum cleaners, water purifiers, various brands of health and beauty products, vitamins, brushes, cleaning products, financial services and office supplies. I’ve declined (or ignored) all of them, although there have been a few I ran into during what I thought were real job interviews with real companies, where I’ve gotten somewhat short with people. I know they don’t mean to be insulting, but it’s the principle of the thing…

If you’ve been fortunate enough to avoid this class of business, an MLM is generally a sales organization in which each level of “employees” is required to recruit the next level; they then receive a percentage of everything brought in by the people they’ve recruited, as well as all of the business brought in by new people their people recruit, the people those people recruit, and so on. Clearly, then, if you have enough generations or “levels” of people working for you, it is possible to realize a very large amount of income every month without actually having to sell any of the products involved. Which is good, because with very occasional exceptions, most of the actual products are horrible…

You may be asking if these operations are legal, and if so, why anyone would want to work for such a cockamamie outfit. The straight answer is, MLM organizations are legal in most of the U.S. provided they tell you up front how their operation works – and all of the claims they make about how you can realize a huge income without doing any actual work are true enough. The point that usually gets left out of these recruiting pitches is that for most people the whole thing is a waste of time (and usually money). Ask yourself how many people you know who would be willing to go to work for you, selling these products – because the odds are good that your friends and family alone will not represent enough of a customer base to recover your buy-in fee, let alone make enough money to live on. To actually make those fabled money-for-nothing earnings, you’re going to need a lot of people to sell your wares on their own dime (without a base salary or any expense money) – and you’ll probably need a lot of suckers to pay the buy-in fee even though they will never make it back…

So why am I ranting about this industry now? Because the current economic downturn is drawing a huge number of people into this sector, according to a story this week by the Associated Press online. Just as happened during the 1991 and 2001 recessions, people are taking on these dubious enterprises as second jobs, hoping to use them as a hedge against loss of income or possibly their jobs. Which wouldn’t be such a big deal, I guess, if not for the aforementioned recruitment under false pretenses. At one point in the late 1990s I recall asking my contact, via telephone, if the job I was coming in to interview for was an MLM job; she categorically denied that it was. When I showed up, however, it turned out that not only was the company an MLM, it was the same one I had declined to fork over several thousand dollars to just three days earlier…

I lost my temper, walked out of the “interview” and sent them a bill for my wasted time (and mileage) – which of course they ignored. I’m not going to tell you that all such companies are pyramid scams (although many of them are) and I’m not going to tell you you’ll lose money and waste your time if you become involved with one (although most people do). I’m just suggesting that you read the fine print before you sign anything…

And for goodness sake, DON’T expect to make a vast fortune by doing nothing! For that, you’re going to have to go into politics, like everyone else…

Sunday, June 14, 2009

The Ethics of Pilferage

Usually when I want to start an ethics post I have to come up with a scenario on my own. But given the subject of this one, I kind of wanted to rip off somebody else’s article on the ethics involved in stealing from hotels you stay in, and I was most gratified to see that CNN Online had already written on this subject. Of course, I’m not going to plagiarize anything they actually wrote; that would be obviously wrong as well as illegal. And I’m not going to pretend that any of their thoughts or conclusions were my own; I actually had been planning a post on this topic, but even if I hadn’t been, I’m not going to start stealing other people’s work. One could argue, in fact, that by correctly attributing this article AND linking to the CNN site, I’m actually helping them to promote their own business, and this article in particular. Which is kind of the point, here…

Most of the stuff that you see in your hotel room – and nearly all of the things that you could easily conceal in your luggage – has been chosen with an eye to either being cheap to replace or serving as advertising for the hotel, or both. All of the toilet articles (soap, shampoo, lotion, etc.), to take the obvious example, have been acquired in bulk and then provided to you in packaging with the hotel’s name and logo all over it. If any of it makes you or anyone else even slightly more likely to stay in that hotel again, this stuff will have paid for several metric tons of itself, not to mention the fact that it was a legitimate operating expense (and therefore deductible) in the first place. This extends to ashtrays (if your room still has any), pens, note pads, glassware, or anything else with a logo on it; none of it costs much and all of it has advertising value…

Furniture, of course, it not intended to be taken as part of the advertising program, and most of it will be difficult enough to walk off with that most guests won’t bother – although I’ve witnessed cases of people trying to check out with flat-screen television sets and occasional room furnishings. Hotel security will take a dim view of that, and management may decide to bill the guests for the pilfered items, assuming they can prove who took them. Linens are the best-known gray area; some facilities have no problem with guests helping themselves to an occasional towel, and some will go so far as to provide monogrammed bathrobes for really good customers – in which case you can be sure the company has made enough off of those customers to afford this minor perk. But hotels further down the food chain will try to prevent people from stealing their towels, and may actually bill you if you try…

Which brings me to our ethics question for this week. If some of the objects in your hotel room have logos and will actually benefit your hosts if you take them and let other people see them, do you have any responsibility to do that? Do you owe it to the hotel (and its owners) to help promote their business? On the other side of the issue, if you’ve just shelled out the equivalent of a month’s rent to stay somewhere, does your hotel have any responsibility to help you afford your stay by lowering your expenditures for soap or linens? Especially since they will be able to write those items off on their taxes anyway? If you pay your taxes, and some of those taxes are used to subsidize hotel-room items (in the form of tax deductions), does that entitle you to a piece of the action? And, most importantly, should the hotel provide a list of things that are okay to take from your room (or label things “complimentary” and “please don’t steal this”), just to eliminate the gray area? If they don’t, is it really your fault if you can’t tell the difference?

It’s worth thinking about…

Saturday, June 13, 2009

The Grad School Diaries: The Saigon Principle

It’s kind of a tough time for the MSU/Broad School of Business Ph.D. Program’s first year students. Of the 5 of us who started in the Management Department this year, four of us are completely bewildered by our research methods class, and even our resident statistician says he’s a bit confused by some of it. When the math guy in the group says he’s confused, you know it’s bad. Nor are the other 10 students in our class (representing the other departments of the business school) feeling any more confident about the process. The guys from Supply Chain Management are more math-oriented than we are (it’s a more intensely math-based discipline) but that isn’t helping them much, since most of this class isn’t actually about solving problems; the Accounting and Finance students have already reached the same conclusion. If you had an eidetic memory (and a real gift for synthesis) you’d still have to pay close attention to have any chance of keeping up in this class. And we’ve already been told that this is the class we MUST complete if we ever want to become second-year doctoral students…

With the midterm in three weeks, the other four management students and I have already formed a study group to try and keep up with the class – or at least keep from falling too far behind to pass. No one told us to; we just got a study room in the Business Library and declared the revolution without further prompting. It’s an excellent example of the cohort working together for our mutual survival, which is exactly what we’re supposed to be doing. It would be nice to think of us as a pack of wolves (working together to bring down the great, leviathan prey: knowledge!) or a herd of bison (mighty creatures of the plains, forming a ring to fend off the predators away from us all!), but in practice I imagine we probably look more like a flock of sheep…

And, in many ways, I am the most bewildered of the flock. Oh, I suppose that our Chinese and Korean students are working harder than I am, what with having to take all of these lessons in a foreign language (and one as illogical and confusing as English, at that!) when even the native speakers in the class are having trouble understanding our instructor when he’s going at “sprint” speed. But all of them are fundamentally more knowledgeable about these topics than I am, and none of them are trying to cope with the deterioration of memory and cognitive function my advanced age and ongoing medical issues have produced. By rights, everyone else should have thrown me off the back of the sled by now. And yet, as far as I can tell, I’m the group’s best public speaker, it’s most experienced manager and administrator, and it’s only natural leader. To find their way through the gauntlet this program has set for them, my cohort needs me as much as I need them…

It wasn’t until I was asked to proctor a midterm exam for one of our professors and saw the way the undergraduates were looking up to me that the whole thing finally hit home. I’ve walked a lot of strange roads since I was a wide-eyed college junior; I’ve done and seen and been a lot of things – but I never did learn how to give up. Whatever else they might be, I see that same determination – that same moral courage – in the eyes around the conference table in our ad-hock study group. We may not all make it; some of us may wash out or be sent home, but we will not go quietly…

Some years ago, Billy Joel wrote a song about the experience of the American soldiers who fought in the lost war in Vietnam, entitled “Good-night, Saigon;” it’s the composition you may have heard that includes the chorus of “And we would all go down, together; we said we’d all go down, together…” My fellow first-year students and I come from different worlds, and one day soon, win or lose, we will be scattered to the four corners of the world and meet again only occasionally, if ever. But until then, we have chosen to stand together, shoulder to shoulder, and fight. It’s the Saigon Principle, and if our challenge is less brutal (and our chance of actually dying in the process is far lower), our defiance and determination are no less intense…

Now if we can just pass this midterm…

Friday, June 12, 2009

Why Hiring Practices Are Important

I’ve already written about the long-standing feud between line managers and Human Resources (HR) personnel; how the line people feel that HR takes forever to move on even the most critical hiring needs and regards petty regulations are more important than the organization’s primary mission, while the HR people regard line managers as impatient, loose-cannon types who wait until the last possible moment and then want their needs taken care of overnight. I’ve also mentioned what can happen when you attempt to fill a high-profile position without taking the time for a proper background check. But since those posts hit, I’ve had people ask if I’m making more out of this issue than it really deserves. Sure, hiring an on-air personality for a national cable network, or promoting a supposedly-true book, you’d have to be very careful, but if all you’re hiring is low-level personnel, say for a junk food stand, what difference could it make?

Unfortunately, that’s another one of those rhetorical questions that you really shouldn’t ask in practice. There’s a by UPI Story online this week about the manager of a Chuck E. Cheese’s in Indianapolis who is alleged to have turned away three different families of African-Americans because he does not like African-Americans and is apparently too stupid to realize that their money is just as good as anyone else’s. As a result, the company has now been hit with two different racial discrimination lawsuits. It is unknown, at this time, how many more people this individual has offended, or for that matter, how many people will decide to bring lawsuits of this type. To be fair, since none of these legal actions have come to trial yet, we can’t say for sure if any of the people suing even have a case, much less whether the manager in question actually did anything wrong. But it points out the harm a single bad hiring decision can do…

Consider that Chuck E. Cheese’s is a national chain, with well over 500 locations and annual sales in excessive of $248 million as of this writing. Not a particularly big operation compared to, say, McDonald’s, with over 31,000 locations world-wide and sales estimated in the $23 billion range, but still a large company, employing thousands (probably tens of thousands) of personnel. Consider that, even if all of the lawsuits are proven in court to be absolutely true (which, I repeat, has not yet happened) they are still only evidence of one (1) racist employee. Now consider the thousands of dollars these legal proceedings are going to cost the company in legal fees, the hundreds of thousands these cases will cost to settle (or pay off, if the court cases go south), and the millions of dollars in lost revenue that this case is already costing the company, win or lose. Do you think it might have been cheaper to have just screened its personnel a little closer during the hiring process?

Of course, the whole thing could still blow over. The lawsuits could turn out to be frivolous; the manager could turn out to be a paragon of tolerance and racial harmony; the plaintiffs could turn out to be the sort of troublemakers we heard about last year, tearing up the kid’s pizza restaurant because they can and then getting offended and suing because someone told them it wasn’t cool to let THEIR children run amok. What I am really suggesting here is that hiring is one of your key functions as a manager, and it will always be worth taking a few extra minutes of your time to get a better idea of what sort of people you are hiring before you make the final decision. Because you don’t want anything like this happening to your company…

Thursday, June 11, 2009

Gas Guzzler Bailout Program

Ever since the government stepped in to bail out the financial and auto industries, people have been complaining that there hasn’t been anything in these programs for the people who paid their taxes, lived responsibly, and didn’t run any multi-billion dollar companies or industries into the ground. I’ve been countering by pointing out that having both of these sectors go extinct will be much worse for the American taxpayer than just shelling out the extra money for the bailouts – and that the approach used by both the Hoover and Bush Administrations when facing the threat of a nationwide Depression (running around the Oval Office in circles making little shrieking noises) doesn't appear to have panned out, so we need to try something else. But then I got the news about a bailout program that everyone in the country should be able to get behind…

According to a story being reported by The Associated Press, Congress is working on a bill to provide consumers with up to $4,500 if they trade in a gas-guzzler for a new, more fuel-efficient vehicle. The House version has already passed, and the Obama Administration is putting pressure on the Senate to pass it as well. If signed into law, this program would serve the immediate purpose of encouraging people to purchase new cars (thus pouring money into our bankrupt and teetering auto makers), and would also assure that all of the employers that dip into that revenue stream (suppliers of the auto makers, dealerships, companies that transport cars and raw materials, financing companies, state motor vehicle departments and licensing boards, etc.) get a share of the resulting rising tide…

Even better, though, is that this measure will support production of cars with better gas mileage, which will have definite benefits for the environment, the long-term health of the auto manufacturers, and the long-term health of all of the citizens of our country who live anywhere near a road. It’s possible that the drop in demand for gasoline will also bring the price down, which would benefit everyone who can’t trade in their car, as well. It’s certainly a better idea than just giving an equivalent amount of money to the auto makers themselves, or just dumping the cash into the general economy as a tax cut. But it’s still only a short-term program; if we’re going to actually get the economy back on a sound footing there will need to be some more elaborate innovations…

I’m already on record supporting the idea of our government creating jobs, and then giving people jobs instead of handouts. The Works Progress Administration (WPA) did just that during the Great Depression, and while it was only marginally effective in changing the economic picture, it did a lot for the people who were part of it. Maybe this time we could try paying people to work on our crumbling infrastructure, take on service jobs we actually need (daycare workers, health workers, educators), and put even more money back into our economy. Alternately, perhaps we could pass a similar law that gives people assistance in insulating their houses, buying new energy-efficient appliances, retrofitting with new windows and fireproof roof tiles, and so on…

Because this time we can’t afford to just hide our heads in the sand and hope for the economic boom of a new World War to come along and save us…

Wednesday, June 10, 2009

Not For Everyone

I’m not sure what the worst job I’ve ever had actually was; I’ve worked some pretty bad gigs in my time, and many of them were bad in different ways. I’m not sure it’s fare to compare a job in which your boss is a total douche bag who makes your life miserable to a job where everybody is really nice, but the physical labor is unpleasant enough to make you wonder if permanent disability is really as bad as everyone says it is. By the same token, I saw an article on the wire this week that sounds like the worst job ever to me, but might seem like nice work (if you can get it) to someone who actually LIKES weddings…

A story being reported by Reuters tells the curious story of Office Agents, a Tokyo firm that rents out wedding guests to brides and grooms in Japan who would otherwise not have enough people (or too many of the same ones) at their weddings. That’s right; if you have no family or friends of your own, or if they’re all too cheap to travel to your wedding (or so flaky that you worry about them not showing up), this company will keep you from being embarrassed in front of your boss, your co-workers, and your new in-laws, by providing you will lots of clean-cut, well-dressed people to sit on your side of the aisle. For a small additional fee, they will even provide you with friends (or family) who can tell jokes, make speeches, or even give toasts…

Now, obviously, this kind of service has limited utility outside of Japan. In America, for example, there is much less pressure to invite your boss or your co-workers to your wedding in the first place, and unless you are unusually blessed, your in-laws will probably disapprove of you anyway, just because they’ve been conditioned by our dysfunctional culture to believe that this is how in-laws are supposed to behave. But similar firms do exist on this side of the Pacific as well; they’re more usually used to provide appreciative audiences at public events (product launches, sales meetings, franchising presentations, business conventions and so on), but they’re perfectly willing to furnish guests for social events if that’s what you want…

A much more interesting question, at least to me, would be how often people with perfectly good friends and family of their own hire professional guests just because their own guests would not look good enough in the wedding pictures. I know it’s a far-fetched suggestion, but I’ve met people who are easily that shallow; people for whom the wedding was more about looking good for posterity than it was about actually celebrating your (theoretically) most important relationship ever. I’ve never actually heard of a case where the marriage was shorter than the wedding reception, but growing up in Los Angeles I do remember a few cases where the marriage did not last until the end of the honeymoon…

In which case, maybe having some professional-grade pictures and video of yourself with a good-looking supporting cast wouldn’t be so bad. In any event, I’ll admit that getting paid about $200 USD plus food, drink and travel expenses doesn’t actually sound like a bad gig, especially for just a few hours work. But all things considered, if the pay was the same, I think I’d rather have a job delivering pizza than pretending to be somebody’s friend on what’s supposed to be the happiest day of their life…

Tuesday, June 9, 2009

Nothing to Add

I’m going to write about this topic because I feel somehow required to; I don’t know how many people this blog is actually reaching, but even if the only people reading it are immediate family and friends, this still needs to be repeated as often as possible. It also picks up and confirms several of the themes I’ve been talking about for the past year or so, which makes it a good addition to this blog. But I really don’t have much to add beyond the facts of the matter…

A story in the New York Times this week details a lawsuit being brought against Wells Fargo by the City of Baltimore, alleging that the bank was systematically steering African-American customers towards sub-prime loans, at a rate 5 to 8 times higher than that experience by white people. As you probably recall, the sub-prime loans were generally much more expensive than regular loan programs would have been; often as much as 3 to 4 percent higher, resulting in huge increases in profit for the institutions making them, which was the primary motivation for doing so. The possibility of foreclosing on the mortgage, seizing the property, and selling it for even greater profits, while certainly attractive during the housing boom, was never more than icing on the cake…

Now, I don’t mean to imply that there was ever anything inherently wrong with sub-prime loans; I had one myself, back when I was single, because at the time I was “employed” as a partner in the consulting firm, and thus could not demonstrate a regular stream of income. There was no real risk involved – the mortgage was for less than half of the purchase price, and probably less than a third of what the property would have been worth at the height of the real estate bubble in California – but since I couldn’t qualify for a regular loan, I was willing to put up with the 1.25% higher interest on the mortgage I could get. What made these “Predatory Loans” was when banks offered them to people who DID qualify for better rates, specifically for the purpose of bilking inexperienced customers out of their money. Which, according to the former Wells Fargo loan officers quoted in the article above, is precisely what they were doing…

Not all of the people who were caught up in this scam were innocents, either; I’m already on record pointing out that a fair number of people who came into the real estate boom during the last few years were themselves motivated by greed and handicapped by inexperience (if not outright stupidity), falling into perhaps the largest “bigger idiot” event in all of history. For that matter, most of the lending institutions involved were not actively trying to cheat anybody, let alone send the national economy down the crapper; selling the most lucrative products available to people who tell you that they want to buy those products isn’t illegal, or even unethical. But all through the boom years there were a small number of advocates claiming that unscrupulous banks were using the situation to screw money out of unsophisticated customers, particularly in the various minority communities, and now we seem to have been presented with the smoking gun…

I don’t have much to add to this; there’s no handy lesson here about business, management or ethics. Just keep in mind that sometimes the advocates are right; sometimes big companies are going to behave like irresponsible, racist idiots; sometimes people will get so wrapped up in their visions of easy money that even those who should have known better will ignore the risks, forget about the future, and march right off the cliff while protesting their innocence…

Let’s all try not to be those people…

Monday, June 8, 2009

Not That Complicated, Really

I read two different news stories this morning that rather amazed me in the complete cluelessness being displayed. One was an article in the Washington Post with one of the vice-chairmen from General Motors talking about how hybrid vehicles are primarily important because of image, and how the introduction of the Prius made everyone think that Toyota was now a completely green company and brought people flocking to their dealerships. The other was a piece from Bloomberg Online about how the airline industry stands to lose $9 billion this year because the downturn in the economy has forced travelers to find cheaper ways of getting where they are going. I haven’t seen so much denial since the last time I accidentally tuned into the Jerry Springer show…

In the case of the car companies, the reason the U.S. automakers are in crisis right now (two of the three are in bankruptcy) is not just because somebody else brought alternative fuel vehicles to market first. I’m not denying that this was a factor; it says something about the current crisis that the only U.S. automobile company that has introduced hybrid technology (and actually sold significant numbers of hybrid vehicles) is the only one not in bankruptcy. But the real problem is that while the rest of the world was working on ways to build reliable cars at lower and lower prices, the U.S. automobile companies were perfecting the concept of “planned obsolescence” to force their customers to replace their cars every three years – or before the cars turned into terrariums. Everyone points to the Hummer’s 10 miles per gallon fuel economy as being what killed the brand (and its parent company); I would argue that the fact that the blasted things will never make it to 100,000 miles is a larger factor…

Similarly, the airlines are blaming fuel costs and lower disposable incomes for their operational and financial issues. These certainly have not helped; people who can’t afford to make the payments on their houses and cars are not going to spend money on airline tickets to exotic destinations, especially when the price of those tickets keeps rising. But the fact that modern air travel has become nightmarish even for those people who can fit into a standard airline seat (and even worse for those of us who can’t) is definitely a factor, and so are the preposterous “airport security” measures that can’t prevent two knuckleheads from just bribing an employee to bring a gun onto an airplane. Nor can the airlines deny responsibility for those conditions; if the airlines hadn’t fought tooth and nail against sensible security for generations, the 9/11 attacks might not have happened, and we wouldn’t all be taking off our shoes, belts and underwear every time we fly…

The unfortunate truth, in this case, is that these two industries have not been undone by environmental conditions, competitors, costs or regulations; they’ve created their own crises through their own efforts, and the only way they are going to get out of them is by changing their ways. A few thousand Chevy Volts are not going to change GM’s fortunes; building cars that people actually want to purchase will, and that’s going to mean developing models that are both durable and affordable that also get competitive gas mileage. Charging extra for checked baggage is not going to save the airlines; it’s just going to annoy more people and decrease their business even further. Greater convenience, reliability and comfort will reverse the trend – if they can make those changes in time…

I get impatient with people, sometimes, for assuming that the manager’s role is easy, and that any business problem can be hashed out in 46 minutes of prime time (allowing for the commercials, of course), but in this case I honestly have to say that the problems threatening to tank two major sectors of American commerce are not really that complicated…

Sunday, June 7, 2009

The Ethics of Paternalism

Going over my notes last week, I ran across an interesting question regarding the ethical responsibility a company has to its employees. It seems there was a case (which eventually reached the U.S. Supreme Court) in which a company that manufactured batteries of various kinds had systematically avoided hiring women for certain positions that involved a significant chance of exposure to lead. The company’s thinking was that since lead exposure can lead to birth defects, they would simply keep anyone who was (or could conceivably become) pregnant away from their manufacturing stations that used lead. We should note that the positions in question were not highly-paid or especially desirable, nor would experience in any of them result in promotion or any other form of career advancement. One could in fact argue that the only special treatment associated with these jobs was who would be hired to fill them…

As you might imagine, when this situation was finally made public a huge firestorm of protest broke out. The company’s defense – that they were acting in the best interests of their employees, to keep anyone from having to choose between their job and their future children – did not placate any of the parties responsible. Several of the company’s opponents roundly condemned this position, in fact, pointing out that men can also suffer significant health consequences from lead exposure, and that assuming that a female applicant wanted children (or was even capable of having them) constituted both gender discrimination and massive condescension on the part of the company. Although the company’s motives may have been well-intentioned, the paternalism it displayed was intolerable – and also illegal…

Now, you might think that I’m dredging this case up from the mists of time; that all of this happened before women were commonly accepted in the workforce, maybe even before they received the right to vote. If so, I regret to inform you that these events are less than 20 years old as of this writing; the Supreme Court decision was handed down while I was in business school in the early 1990s. But while it’s doubtful that anyone would attempt to institute this specific policy today, echoes of the situation described live on; people are still more likely to assign hazardous duty to men than women; single people are more likely to sent into harm’s way than those who would leave a widowed spouse and bereft children; women are still barred from most combat position in our military, and so on. Which to me begs the question: to what extent, if any, should an employer place the welfare of its people ahead of their legal right to die (or be genetically damaged) in unpleasant ways while on the job?

Obviously, there are OSHA regulations and similar laws that attempt to keep everyone safe on the job. And even more obviously, this is a very slippery slope indeed; the line between keeping women off a specific job category because they might get hurt and keeping them off any specific job because you’re a bigot and you don’t believe they can do that job as well as a man could is so fine I can’t imagine how to measure it. In theory, all work assignments should be made regardless of the applicant’s personal characteristics, on merit alone – but does that mean that an employer has no special responsibility for any of its employees? That if one of their people wants to do something with potentially harmful long-term effects, the company should just ignore the possible repercussions and let them go on ahead? Does our responsibility as managers to treat all of our people as even-handedly as possible supersede our very human desire to protect our people from harm?

It’s worth thinking about…

Saturday, June 6, 2009

The Grad School Diaries: The Sartre Conundrum

The suggestion that I am not a very social person, which my various critics have often raised (beginning with my late mother, when I was about three, and continuing to this day) has never seemed entirely fair to me. Given my extravagant trust issues (developed during my train wreck of an early childhood and also, unfortunately, continuing to this day) I’ve always considered myself to be remarkably friendly, approachable, and easy-going. I don’t make a lot of friends, and I don’t do so easily, but I tend to hang onto the ones I do encounter; I’m currently in touch with a whole circle of people I’ve known for 25-plus years now, and married to someone I’ve known since 1983. I have enough self-awareness to realize that I can be considered a “difficult” man (and sometimes am) and that I can on occasion give offense without ever meaning to – thus, I try to make up for those failings by being loyal, supportive, and very difficult to offend myself. But that said, there are still days when people get on my nerves…

When I made the decision to join this program I was expecting a number of challenges, not least of which would be taking up the lifestyle of a full-time student again after all of these years. I hadn’t anticipated a return to the sort of existential angst that is so typical of young intellectuals in their late teens and early twenties, but I suppose I really should have. This program is by far and away the most difficult thing I have ever attempted, and I am even less prepared for (and indeed less suited to) this life than I was to becoming an undergraduate in 1982. Already, just a few weeks into my first semester at MSU, I find myself floundering, trying to cope with a massive load of reading and study, and a middle-aged man’s memory, which is not a good combination. I’ve compared it to being an old athlete trying to get back into a familiar game, and that analogy is sound as far as it goes. But some days, there’s a much darker image that comes to mind…

Have you ever run down a steep slope, so steep in fact that you could not have walked up it? It’s more of a slide or a controlled fall than it is an actual run, particularly if the ground is covered with loose earth and gravel, shifting under your feet as you try to find your footing. There is a combination of agility, balance, experience, skill, timing and sheer dumb luck that will bring you safely to flat (and stable) ground again, if you can just find it; otherwise, you’ll probably fall, scrape the heck out of your knees, rip the skin off your palms, break one or both legs (or one or both arms/wrists), break your neck, or just bash your head against something and die (although combinations of the above are also possible). Now imagine that a whole pack of people who are younger, thinner, faster, more agile, and generally in better shape than you are, all of whom also had acrobatic or gymnastic training you couldn’t have qualified for (let alone completed), are telling you how easy this challenge is and how little trouble they had with it…

I know, of course, that they mean well, and that in fact most of them didn’t have anything approaching the trouble I’m having. But that still isn’t helping. In the play called “No Exit” Jean-Paul Sartre wrote “Hell is other people” – and anyone who has been forced to deal with unpleasant strangers on an airplane or in a place of public accommodation knows how right he was. It’s possible, I suppose, that there is some other venue in which you could study the strange contradiction that being surrounded by helpful people is sometimes worse than being alone – particularly if you have to try to be bright, and upbeat, and hopeful whenever they’re around. But this one will do until something worse comes along…

Assuming, of course, that I can manage to cope with the anger, frustration, complete intellectual inadequacy, panic, fear and crushing depression, all without breathing a word of my difficulties to another soul for fear of being seen as "displaying negativity." I'm surrounded by people trying to be helpful, and yet, more alone than ever. How is this even possible? It's the Sartre Conundrum, and I'm not sure even the existentialist master himself could answer it on a day like today...