Think About It

I didn’t really plan to follow up on my last post. I would imagine that if you feel that education in America has finally taken that last step over the cliff and into irrelevance, or that our culture has devolved to the point where tuning in, turning on and dropping out has really become sage advice, that the opinions of a humble fixed-term instructor teaching business strategy and policy would be of no interest to you. And if you read yesterday’s collection of statistics, business research, and operational strategy, and still are siding with young people who think dropping out of school is courageous and failing your classes “on purpose” (so that you can’t back out and take a mainstream job later, even if you wanted to), then I don’t believe any additional rational arguments will convince you of anything. So perhaps we should consider some theory and/or philosophy instead…

One of the first things that came to my mind is that even in the arts, where we kind of expect people to give everything up to follow their dreams, this kind of behavior makes no sense. Most of us need some kind of day job while we pursue our art, and without a college degree you will be limited to traditional pursuits, such as waiting tables (actors), driving cabs (writers), or dressing up as corporate mascots and playing with children and badly-behaved adults (dancers). Granted, the alternative has its own hazards – faced with having a B.A. in English and no specific training I got a job in the service sector, got promoted into management, got an MBA, and eventually became a management consultant and a management teacher. But throwing any chance of getting a job that does not involve rancid pizza and vomit (which all of the above do) seems absurd, especially if you were only two more weeks from finishing…

In a business context, however, this behavior isn’t just absurd, but idiotic. Business strategy is all about being better than the competition, and one of the key concepts is using the available resources to gain that competitive advantage. I don’t know if having a degree in Computer Science will be of any relevance in whatever entrepreneurial pursuit the self-proclaimed “former valedictorian” is going to begin next – he does not mention it anywhere in his open letter – but just throwing it away because you can isn’t a good policy. Especially when you consider that he (or his parents) have already spent the money on tuition. It’s also not a good demonstration of the mentality you need to be in business, let alone become an entrepreneur with nothing but willpower and a hankering for taking on the world…

I think that the late Sir Terry Pratchett said it best, in his YA novel The Wee Free Men:

‘…if you trust in yourself…’

‘Yes?’

‘…and believe in your dreams…’

‘Yes?’

‘…and follow your star…’  Miss Tick went on.

‘Yes?’

‘…you’ll still get beaten by people who spent their time working hard and learning things and weren’t so lazy.’

Now, I don’t mean to suggest that this particular young dreamer, or any of the others like him, are actually lazy, or that they don’t have every intention of working eighty or ninety hours a week to make their entrepreneurial ventures a success. I’m certainly not the world’s expect on entrepreneurship, as witnessed by the fact that I work for the State of Michigan these days. And goodness knows, I’ve made the mistake of ignoring the evidence of history and assuming that when I try something it will be different. But if I’ve learned anything in the last twenty-some years of bouncing around Corporate America (and studying it, and teaching people about it), it’s that the things we think are unique are often common, and the problems that we believe no one can solve have often been solved many times before…

In the end, all we really have are intelligence and knowledge, as guided by experience, and throwing any of it away so you can thumb your nose at all of the people who are somehow less special than you are doesn’t make you an entrepreneurial genius…

Although it might make you a Computer Science major who needs to read more…

Yeah, About That...

When I first ran across the (viral?) story about the self-proclaimed “Valedictorian” who intentionally failed all of his classes and dropped out of school two weeks before graduation to become an entrepreneur I’ll admit I was annoyed for more than just professional reasons. To be sure, as an instructor in the business college I find the assertions that all education is a waste of time and all one needs to be successful in life is to believe in themselves to be arrogant, self-serving intellectual drivel. I’ve seen too many young philosophers who believe that they already know more than they could possibly learn in school; they generally skip lectures a lot and end up grubbing for grades. But I’ve also worked with (and occasionally for) a large number of actual entrepreneurs over the years, and what this unteachable young genius is saying also fails to match up with the observable facts…

To begin with, the statistics on entrepreneurial start-ups are fairly conclusive: 90% of them fail before ever breaking even, regardless of the confidence or self-actualization of the entrepreneur starting them, or even of how many previous times the same individual was successful. This is not to say that no one has ever gotten things to work on the first go – that’s not how statistics work – but it does mean that even people who are relatively good at this process will need more than optimism and commitment to their ideals if they plan to succeed. They will need a viable business concept – not just a product of service that people will actually want to purchase, but one that can generate enough revenue to meet expenses when they do. I’ve seen too many projects that came to grief because the person or persons in charge never actually figured out how they would earn money doing it, and if you go on the “unfunded” page of any of the crowdfunding sites you can find dozens more…

They will need a plan. I’ve already spent a lot of time on this site talking about business plans, and why they are important, including the boring parts that nobody ever wants to learn about, let alone do. A business plan is great for showing to potential investors, including friends and family, and is absolutely critical if you want to get loans or grants, including the SBA loans and grants for which I used to help people apply. But the most important reason for doing one is for yourself; if you can’t articulate everything you plan to do, in plain language, you have no realistic chance of doing it. That goes double for the vision statement (which lays out what you are trying to do) and the mission statement (which details how you intend to accomplish your vision) – your investors may or may not want to see it, but if you can’t explain these things you’re not likely to have any…

They will need money. I’m not saying that no one has ever started an entrepreneurial company in their garage or their parent’s basement and gone on to build a wildly successful company – Kevin Plank of Under Armour, Jeff Bezos of Amazon, and Jobs and Wozniak (who need no introduction) are all proof of that. But for every Steve Jobs there are literally thousands of people who are still living in their parent’s basement after seven or eight tries, unable to earn enough to pay for lunch, let alone that “Lifestyles of the Rich and Famous” mansion they thought would be theirs within a year or two. It’s possible that the author of this supposed think-piece has actually figured out what he plans to do and how he plans to do it, but I can’t help thinking that it would have been much more interesting to hear about that, rather than some half-baked, derivative philosophy…

And it would have been far more impressive to actually start that wildly successful new venture and then write about how throwing away three or more years of your life and tens of thousands of dollars was actually a brilliant and brave decision…

The Truth

If you’ve been following the last two posts (assuming that anyone is reading any of these posts) you may have been asking why the management failures I’m describing keep happening. How could anyone be daft enough to issue contradictory orders to their employees? For that matter, why would anyone treat all of the customers (without whom we do not have a business) as though they were compulsive thieves who routinely steal everything that isn’t nailed down? I could make any number of nasty, sarcastic remarks at this point, but the truth is that like so many other things, operational management of any public-contact organization is harder than it looks…

Spend any length of time in any large retail store, for example, and you will come upon physical traces of shoplifting, such as the boxes expensive merchandise arrived in that have been emptied when the thief stashed the actual product on their person. If the store carries groceries you will find signs of “grazing” – people walking through the store, eating as they go, and then leaving without paying for any of their meal. Check out the back room and you will probably find evidence of employee fraud – all it takes is opportunity and the ability to rationalize the theft; even need is secondary. The only thing that will prevent either problem is an increased chance of getting caught; countermeasures like video cameras are useless if no one is ever monitoring their pictures, and the severity of the punishment threatened is irrelevant if no one will ever have to face those consequences…

It is possible to offset some of the theft problem with security tags and cameras, but the only fail-safe method is simply raising prices to cover the cost of the losses – and as noted elsewhere on this blog, any shoplifter who believes that the company won’t do this is kidding him or herself, and stealing from the community more than the store. You can beat the customer service contradiction by just accepting that some people are going to try cheating the company at the service desk and telling your supervisors to make the customer happy, no matter how absurd the customer’s demands happen to be. But if you want to combat any of these issues without simply shoveling money out the window, the only other choice is to get busy…

A manager who knows his or her employees can develop their people, promote and reward the good ones and eliminate the completely crooked. A good loss-prevention team can catch the most blatant thieves and fraudsters in the act, and thwart many of the others with simple active countermeasures like careful inventory control and locked displays. A management team that is committed to excellence in customer service can support their front-line personnel, take on the worst cases themselves, and never second-guess the unfortunate line supervisor who got stuck dealing with a “screamer” at some obscene hour of the morning. The problem is that all of these things take effort…

Now, no one who has ever done it would ever suggest that customer service management is easy. The hours are absurd, the conditions are terrible, and as the only exempt personnel in the company, the line managers are the lucky ones who get to deal with every extra detail for which the company does not have overtime hours available. Taking the time to walk the aisles and get to know everybody in the building at any given time is a huge drain on time and resources that you probably don’t have. But as I have noted on a number of occasions, if you study the dominant company in any given field it will probably be the firm with the best customer service, and in many cases it will also be listed as the best place to work. The bottom line is that we can blame lazy, thieving employees and greedy, thieving “customers” all we want to, but the success or failure of any company that makes its living off of direct interactions with the public is up to the management team. It’s on us…

It may be an unpleasant truth. But it is still the truth…

Mine

It’s a truism in the Service Sector – at least among management personnel – that it’s always the nice customers with whom you have to be the most careful. Bad customers, whether absurdly entitled, short-tempered, fault-finding, easily offended, bigoted, smug, condescending, mind-numbingly cheap, exceptionally rude, chronically late for everything, out of touch with current pricing, oblivious to health and safety regulations, unafraid of the law, or simply whacked out of their tiny little minds are not going to alter their behavior not matter what we do, and that includes boycotting our business. In fact, some of these oddballs will actually refuse to do business with any company that does not give them things to complain about. In many cases, it is doubtful if you could actually lose these customers if you tried, and there would be little to worry about if you did. They’re not really the problem…

The real problem are those customers who will arrive without fuss, behave politely, follow any clear signage or instructions, pay the appropriate price for the product or service – and leave, never to return, if treated badly by the customer service personnel. In fact, if your company’s customer service personnel are sufficiently incompetent, or if your company’s customer service policies are sufficiently horrendous, you may be quietly hemorrhaging these customers and never know it until the firm starts to go bankrupt…

Now, I’m not suggesting that the customer service function is easy, or that managing personnel who perform that function isn’t a challenge. The truth is that while inventory loss due to customer actions – shoplifting as well as vandalism – does not approach the losses most businesses experience due to employee theft and damage, those actions are much more exasperating to the front-line personnel who have to clean up the resulting mess, and front-line managers who have to deal with both the horrible customers (and outright thieves) and the corrosive effect they have on the employees. It does not take many episodes of being lied to, cheated, insulted, abused, or grossly inconvenienced before the average person will realize that any given visitor may turn out to be completely monstrous and start treating everyone as a potential criminal…

In many cases the “nice” customers are the counterpart of our “loyal” employees – the people who adhere to company policy, do their best to perform their job duties correctly despite the miserable conditions and insulting salaries, and would never dream of stealing. Treating these people as potential thieves and embezzlers makes no more sense than treating all customers as potential shoplifters and vandals. Where this becomes a critical problem is when a loyal employee is trying to adhere to the company policies and rules (standards to which the company is holding them) but in doing so outrages a customer, either because the customer really is a thief or a scam artist, or because they’re a nice customer who resents this treatment. This can, and frequently does, result in a situation where the employees know that if they deviate from company policy they will be fired, but if they comply with company policy and a customer complains about them (either because they’ve been thwarted from taking criminal actions or because they’re honest people who would never resort to criminal actions – the behavior is generally the same) they will be fired anyway…

Faced with this kind of Catch-22 situation, many employees will attempt to balance the need to conform to absolute, arbitrary rules written by people who may be completely out of touch with the realities of front-line customer service and the need to placate difficult, dishonest, or completely sociopathic customers. However, some employees will become disillusioned, engage in counterproductive work behaviors (from loafing to outright theft), or just quit, resulting in many of the problems described in the previous post. After all, being threatened with termination (or actually being terminated) so that a thieving “customer” can successful steal from the company is completely unjust, and utterly violates the implied social contract between the employee and his or her supervisor…

There have been a number of attempts to change this situation, or at least contain the most damaging parts, to both the employees and the customers who would actually be worth having. But that will bring us to Part Three of the story…

Yours

I was wandering around on the always entertaining Not Always Right site, laughing at some of the obviously stupid events (and stewing over some of the injustice) when I ran across one of the frequent comments about companies siding with customers – including abusive, lying and thieving customers – over loyal employees. Regular readers of this blog (assuming I have any) already know that I’ve been on both sides of this issue over the years. Some of you may recall that my hopscotch career has included stops in Retail and Cable Television, both on the Customer Service side, where I’ve seen most of these issues play out. This is where I developed the contention, often expressed in these posts, that people who want you to do things for their benefit that provide no advantage to the company aren’t really customers, and should be treated accordingly. But when I read the most recent examples on NAR, I was struck by the fact that like all stories, the issue of loyalty to the company versus loyalty to the employees has three sides: Yours, Mine, and the Truth…

Consider, for example, the issues inherent in managing a retail store. In any crew, there will be people who will faithfully serve the company in miserable conditions for minimal reward for decades at a time and adhere to every regulation the company applies. Regrettably, the converse is also true: on every store’s roster you will find people who can’t get through a single 8-hour shift without stealing anything that isn’t nailed down. In fact, there are several authorities who will tell you that more theft and damage is caused by the employees than the customers and the general public put together. That doesn’t even count the assets and merchandise that are lost by careless employees, destroyed by ignorant (or occasionally just stupid) employees, or stolen under the noses of oblivious employees. That isn’t the worst of it, though…

In retail, as in most front-line customer service applications, a single mistake can wipe out all of the progress you have made in the previous twenty-seven successful sales. That is, a sufficiently angry customer will generally tell between twenty-five and thirty (it depends on who you ask) other people about how appalling your service and/or product was. That statistic does include psychopaths who will be outraged by what color the sky is that day, and the easily-offended people who will consider the cashier’s hairstyle to be a vicious cultural insult, but it also includes perfectly normal people who happened to ask an employee an unfortunately annoying question on a particularly difficult day. And while a satisfied customer will tell four people about a positive experience (thus lowering the ratio to a still-horrendous seven-to-one), it can be difficult to generate any particularly positive experiences during a simple interaction like a retail purchase. That isn’t the worst of it, either…

For most of the retail managers I’ve worked with, met, interviewed, read about, consulted with, or in recent years taught in the Business College, the worst aspect of running a business that offers insultingly low pay, laughable benefits, miserable working conditions, mind-numbing job duties, and the constant risks and aggravations of working with the general public, is simply the fact that almost no one wants to do the job in the first place. Turnover is a constant problem, with people leaving to take better jobs at their first opportunity, but absenteeism, tardiness, low work performance (or zero work performance), fake worker’s compensation cases, real worker’s compensation cases, disciplinary issues, and abuse of the handful of benefits actually available to the employees makes this one of the most challenging Management roles in any free-market economy. And while the theft issues are not as much of an issue in the Service sector, work avoidance, social loafing, freeriding, and abuse of both company assets and the available benefits are, if anything, even worse…

All things considered, it’s not actually that surprising that the people running the company, who we should remember are responsible for keeping the doors open, the lights on, and the payroll checks from bouncing, might place greater importance on the people who come to their place of business to give them money than they do upon the workers they employ. But this is only Part One of the story…