Not Even Trying

Suppose for a moment that you were a parent traveling with children, possibly small children, and when you attempted to book tickets in the same row with your children (and spouse) you were told that the airline was going to charge you an additional fee for letting your party sit together. Let us further suppose that you asked the justification for this peculiar charge, and were told that there was no particular reason for the practice; the airline was just doing it as a way to wring more revenue from each flight, because they can. And, just to cap things off, let us suppose that you asked what the CEO of the airline thought about this practice, only to be told that the whole thing had been his idea in the first place. Would you still book the tickets?

Since you’re reading this story on my blog (assuming I have readers) you’ve probably figured out by now that this is an actual policy at United Airlines, according to an interview with their CEO on the Flyer Talk site this week. United President Scott Kirby claimed that the practice was just a matter of the company charging extra for a superior product – effectively, increasing the price because of value added – and defended it on the grounds that all companies charge extra for more valuable products or services, and airlines shouldn’t be any different. Whether he was missing the point deliberately or just brushing off the reporter isn’t clear from the article, but I feel it’s worth raising the issue anyway…

In general, any business policy that involves forcibly separating parents from their children – or extorting money from them in exchange for not doing so – is going to cause trouble, particularly if there isn’t any objective reason for doing so. Leaving aside over-protective parents who literally carry their children everywhere until the kids are school-age, most people find travel with small children stressful enough without having to worry about where they might be or what they might be doing/breaking/ingesting at any given moment. For that matter, most other travelers don’t particularly want to have to consider the complications of sitting with unaccompanied children just because the airline wants to make a few extra dollars. If this story is accurate, though, United is running the risk of irritating every customer on a given flight…

Now, I’ve made no secret of the fact that I consider annoying the customer to be a colossally bad idea; I’ve gone so far as to suggest that the Second Law of Business should be not to do this. In the case of a company like United, which is already having public image and customer relations issues due to things like having customers dragged off of flights (and possibly beaten), this policy goes beyond “stupid” and is careening directly toward “complete fiduciary misconduct.” While I can admire Mr. Kirby’s honesty and candor, I can’t help feeling that he’s not even trying to understand the potential shortcomings of the policy he is defending. If I still owned stock in United (I don’t) I might be trying to sell it, but I’d almost certainly be trying to oust the CEO at the next proxy vote…

From this perspective, I can’t actually tell if this policy (or admitting to it in public, at least) is insanely brave, utterly tone-deaf, or unbelievably arrogant. All I can tell you for sure is that none of these are adjectives that I want to associate with a company with which I do business, or with the senior management personnel of such a company. If United wants to improve relations with its customer, or at least stop being the punchline of jokes written by millions of scruffy bloggers across the Internet, they need to at least try to consider the needs of their passengers. Before things get any worse…

Watch Your Mouth

After all of these years you’d expect me to have gotten used to the idea of people failing to value things they don’t understand, but it still annoys me as much as anything else. Writers deal with this almost constantly, given the vast numbers of people who seem to think that writing is the same thing as typing, but you can also find examples in business, government, academia, and even in the military. One particularly vexing version, of which you can find examples in the news on almost any weekday lately, is people who believe that speech writers aren’t necessary; that any idiot with a microphone and a podium can just spin out oratory off of the top of their head…

The truth is that even something as trivial as a ranting blog post can take hours to craft, at least if you don’t want to sound like the kind of blogger who wears their underpants on their head and believes that the World Health Organization is beaming vegan pastry recipes directly into the President’s false teeth. Great orators – and there are far fewer of these than people seem to think – can make it look like the awe-inspiring speech they are giving is just something off the top of their heads, but that’s showmanship and acting, not wordplay. Even for very smart people, just saying the first thing that comes to mind can get you in trouble faster than you would believe…

If the public sector examples of the last two years aren’t enough for you, consider the case of “Papa” John Schnatter, founder of the Papa John’s Pizza chain. Anybody who starts with a single pizza oven located in his father’s tavern and ends up with over 5,000 retail locations and corporate earnings in the $1.7 billion range (according to Forbes) can’t exactly be a blithering idiot, but you could be excused for thinking so if you’d encountered his remarks about the NFL player protest controversy, or his more recent attempts to justify them…

You can pick up the Forbes and CNBC stories about this if you want to, or go back and check the news broadcasts for the relevant days. I’m not going to say that the issue isn’t controversial, or that Schnatter doesn’t have a right to his own opinion, but I will suggest that making unscripted remarks about an emotionally-charged topic isn’t a great idea even if you do know what you’re talking about. In this particular case, there’s something particularly tone-deaf about a wealthy and powerful white man criticizing African-American athletes for staging a respectful and non-intrusive protest against institutionalized violence aimed at their community. But as bad as that was, attempting to justify your remarks by saying that Colonel Sanders used the “N” word may be even worse…

Now, I’m not going to suggest that everyone should run all of their public remarks past their Public Relations department before speaking them; many of us don’t have a PR department, and not everyone has a spouse or a partner who can tell them when they are about to put their foot into their mouth. But, by the same token, it doesn’t take a master’s degree in Communications with a Public Relations emphasis to realize that making uninformed or casual remarks about anything as complex and emotionally charged as race relations in America is probably not something that a career in food service management would qualify you to do…

The truth is that most of us won’t ever be important enough that our remarks will be noted by millions of people, let alone result in a multi-billion dollar loss in our stock price and get our sponsorship deals with the NFL and Major League Baseball cancelled. All I’m saying is that if you are in a position where a poorly-chosen, carelessly-worded, or badly-informed remark can have a major negative impact on a company, a country, an international treaty organization, or the stakeholders whose jobs or lives may depend on those institutions, there’s nothing wrong with hiring someone who does have expertise in those areas to help you…

The Ethics of Loitering

There has been a lot of ink over the past few weeks about the Starbucks incident where some overanxious store employee called the police because a couple of people were waiting for an associate to arrive before they purchased anything. Once again, I don’t think there is any controversy in this particular case; the employee appears to have acted because the people waiting in their store happened to be African-American, while ignoring the fact that many of their customers who aren’t people of color do this all the time. Starbucks responded by closing all of their stores to retrain the staff, and issuing orders to let anyone hang around the store for as long as they want to whether they order anything or not – which makes me wonder how many more of these incidents have happened recently. But regardless of what happened in this specific case, I thought that the company’s response brings up a larger question…

One could argue that as a place of public accommodation, Starbucks has an obligation to extend service to anyone who isn’t actively violating any laws, and that one of the services they offer is a place in which to sit and enjoy your coffee. One could also argue that chasing away people who may be about to place an order is bad for business, and chasing away people because one of the employees has an unreasonable fear of one or more specific demographic groups is bad for the entire company’s reputation and brand image. In that sense, the company’s response and the new standing orders make perfect sense. Anyone who has ever worked in a food service, customer service, or other “public facing” job already knows that there is another side to the story, however…

Sadly, there are people in any society who will abuse anything any product, service, or resource to which they can gain access. If the personnel in a Starbucks store are not allowed to ask anyone to leave for any reason, we can almost guarantee that someone will make inappropriate use of their premises, more likely sooner than later. That might mean relatively harmless things like people using the seating area for an office they don’t pay rent on, or helping themselves to condiments and paper products without buying anything, or it could mean serious problems like homeless people using the store to sleep in, drug users shooting up in the restrooms, or stalkers spending all day watching one or more employees before trying to follow them home…

Any of these latter cases is going to be virtually as bad for business as the conditions that precipitated the company’s policy change, with the added issues of OSHA violations and hostile and offensive working environment suits being a near-certainty. No one, least of all me, is going to suggest that any company should tolerate open or even implied bigotry among its employees, but anyone who doesn’t realize how much harder these measures have made an already difficult job category has never worked a public-facing job in a tough neighborhood. All of which leads me to the question:

Do we, as businesspeople, have an obligation to accept loitering, trespassing, or other inappropriate use of our facilities because a non-zero number of visitors will be offended by anything other than free and unlimited usage of the property? Realistically, some people are going to take offense no matter how carefully we attempt to meet all of their needs and no matter how hard we try to make them feel welcome. By the same token, some of our employees are going to have some discriminatory beliefs no matter how hard we try to screen them out, or how carefully we attempt to train them to keep those opinions to themselves during business hours. Where do we draw the line between trying to never offend anybody (which is impossible) and trying to maintain a perfectly clean, safe, professional working and eating/drinking environment (which is also impossible)?

It’s worth thinking about…

Yet Another Bad Choice

Several times over the past few years I’ve written in this space about the frequently baffling marketing programs attempted by the Burger King Corporation, and the backlash from both the consumers and their own franchise holders as a result of these occasional crimes against good taste. The “Freaky King” ads alone would be enough to make me want to fire my ad agency, but after episodes like the marginally obscene print ads for their foot-long burger and internal management fiascos like demanding that their franchisees sell products for below cost in order to align with national advertising campaigns, I have begun to question why the people running this company haven’t been committed for their own safety. And then I learned that the company had decided to open their newest overseas operation by insulting the royal family of the country they are just about to launch in…

According to an article on the BBC News site, Burger King is about to start operating in Belgium, and have been running an online ad that asks people to choose between a picture of the “Freaky King” mascot character and a picture of King Philippe, the actual monarch of that country, under the heading of “Who is the King?” Apparently, if you select the picture of the actual King, you get a pop-up message asking if you’re sure about that, considering that he’s not the one who will be cooking your fries. A spokesman for the Royal Family has issued a statement saying that they do not approve of this tactic, and would not have given permission for Burger King to make use of the King’s image if anyone had actually asked them…

I’m not familiar with Belgian popular culture, so I can’t tell you what level of offense this ad campaign with rise to with the people being subjected to it. There are places in the world where the royal family would simply ignore this kind of thing, and consider it nothing more than part of being a public figure in an increasingly vulgar world. There are other countries where this sort of campaign would result in the company being sued, banished from the kingdom, or just having all of their local assets confiscated and all of its local management team jailed. And there are other places in the world where this sort of thing might result in outraged subjects boycotting the company, marching in protest, setting fire to their in-country locations, or burning local managers in effigy (or possibly in person)…

What isn’t clear to me is why any company would take such an approach in the first place. In any nation where their actual king is a beloved figure this will be taken as a cultural insult, and in any place where there is a totalitarian government this would be considered an actual incitement to insurrection in the streets (which it actually might be). But regardless of the population’s actual relationship with their monarchy, it’s hard for me to imagine any circumstances under which this type of advertising would be considered a sly in-joke as opposed to yet another tone-deaf attempt by a particularly ugly American company to appropriate some part of the local culture in order to sell food products that are potential health risks…

I’ve read the same things you have about there being no such thing as bad publicity, and to some degree that might be true, but given the worsening relations between the US and Europe during the past few months, and the past week in particular, it just doesn’t seem like the best time to be going around calling attention to American arrogance and tone-deafness. Not that there is ever a really good time to do that, of course…

Doubling Down

In my last post, I joined with the thousands (millions?) of other bloggers out there who are piling on to United Airlines for their determination to set customer relations back a hundred years by not just bumping customers off of overbooked flights but actually using the seats freed up that way to move their own employees around the country. Since the story first broke the victim in the original story has retained legal counsel and the CEO of United has issued a real apology for the incident – in that order, unfortunately. Whether that will help with the multiple lawsuits that are about the hit the company remains to be seen, but over the last day or so a similar event has popped up in the news that has even more disturbing implications…

You can pick up the original story off of the Los Angeles Times website if you want to, but apparently there was a United passenger who needed to get from Hawaii to Los Angeles in time for a business meeting, so he paid for a full-price first-class ticket. He had already boarded the plane on Kauai and was enjoying the complimentary orange juice prior to takeoff when a United ramp agent ran onto the plane and told him he had to get off. Upon asking, the passenger in our story discovered that United had overbooked the flight, and were going to give away his seat to a passenger with “higher status.” Apparently there is a pecking order among frequent flyers (based on number of hours flown, maybe?), and the company will cheerfully screw over anyone if a higher-ranking customer wants their seat…

I’m already on record as saying that the company’s handling of the original situation was asinine, and I’ll stand behind that, but at least we can consider the idea that moving the four crew members would prevent the cancellation of an entire flight – that is, the company was accepting annoying four customers to avoid completely browning off two hundred of them. In the Hawaii case, however, the only advantage the company seems to have gained was the chance to suck up to someone who already flies with them all the time, while at the same time costing themselves another frequent flyer, everyone from his company, and anyone else who might be concerned with being bumped off their flight by someone whom the airline likes more than them…

Now, we should probably note that, like overbooking, bumping passengers to make room for VIP customers is a long-standing practice on all of the airlines. In some cases there might even be a sound business reason for doing so, as in the case of emergency travel or a family trying to get somewhere together. But the idea that every business practice that was acceptable in 1931 (when the company began flight operations) is still reasonable today is utter nonsense, and the assumption that your customers will put up with being displaced purely at the whim of some slightly more frequent flyer is demonstrably preposterous. It took a week of pushback, and the threat of even more legal action, before the company even came up with a written apology and reimbursed the customer for the price difference between his full-fare first-class ticket and the middle seat in Economy class they ended up sticking him into…

I’m not sure how much more of this knavery, chicanery and buffoonery the United Airlines stockholders are going to tolerate; I know that I personally would have started demanding resignations from everyone responsible for this crap starting with the “United Breaks Guitars” episode involving Dave Carroll. I’m also fairly sure there’s a limit to the number of times a company facing strong competition, rising costs, falling revenues, customer dissatisfaction, and an increasingly hostile operating environment world-wide can go alienating current and potential customers by making mistakes that any small child could tell them are idiotic…

Piling On

I’m not sure what I can say about the current United Airlines situation that hasn’t been said by millions of business bloggers (and travel bloggers, one assumes) since the story broke. If you missed it, the story goes that United had oversold a flight from Chicago to Louisville, and then compounded the problem by trying to get four passengers to give up their seats so that a flight crew could get to Louisville in time for the flight they were supposed to work the next day. When no one volunteered, the airline selected four passengers who were already on board the aircraft and attempted to eject them. One of these four people took exception to being forced to give up his seat, refused to leave the plane, and was eventually forcibly removed by ground security personnel – literally kicking and screaming…

In any era prior to this one, the whole episode would probably not have made it onto the local television news; it might have made the local paper if it was reported at all. Unfortunately, in an age when almost literally everyone carries a camera around with them every day it is unrealistic to expect that no one on the plane wouldn’t have recorded video of the whole thing and posted it to various social networking sites before the flight even took off. It shouldn’t have surprised anyone that a graphic (and to some extent disturbing) video like this one would have gone viral immediately, either, or that this would cause additional Public Relations nightmares for a company that isn’t exactly known for good PR or good customer relations. Why it appears to have come as a surprise to senior management is beyond me…

Now, we should probably acknowledge that overbooking flights – and bumping people off of them when necessary – has been standard practice within the airline industry for decades. It’s completely legal, and in fact you have already agreed to put up with it – there is a clause in your ticket agreement that give the airline the explicit right to do that. It is also probably worth noting that for most of its existence, the airline industry has wielded enormous political and financial power in the US, and senior management personnel have apparently gotten used to answering to their stockholders, the FAA, Congress and the Unions before they consider what their customers might want. And I’m sure you already know that most people my age and older don’t automatically think about how the world will view their actions, if only because they don’t think of the world as watching them…

What struck me about the affair wasn’t the remarkable tone-deafness of the management team, as demonstrated by the CEO’s non-apology for the events, or the laughable incompetence displayed by the customer service personnel involved. It was the fact that United appears to see this whole situation as being nothing more than business as usual; this is the way they have done business for generations, and they see no reason to change now. But the fact is this level of disregard for your customers and disdain for anything they or the general public might feel about your company would have represented gross incompetence even before any given disgruntled passenger could share his or her gripes with every other potential customer in the world in a matter of seconds. And even more importantly, perhaps, this situation is not going to change…

As we plummet ever further into this new century, every customer-contact position must be treated as if everyone in the world is watching, because they effectively are. And every employee who holds such a position needs to be trained to ask him or herself how they would handle the situation in front of them if the whole affair was going to appear on every television and Internet news channel in the world within a few minutes, because it probably will be. Simple, ordinary, it-could-happen-to-anybody mistakes will be bad enough; errors that involve callous disregard for your customers, putting the company’s interest ahead of the customers, or violation of either criminal or civil law will at minimum damage your corporate image and credibility, and may very well end up destroying the entire company if you annoy enough of the wrong people badly enough…

But that’s a story for another day…

Not More Hogwash!

It’s still too early to be sure, but apparently Volkswagen may not be the only company that has been defrauding customers – and the EPA – on how clean their diesel engines really are. Last week the US Department of Justice announced indictments of six VW executives involved in the use of “Defeat Devices” that allow the so-called “Clean Diesel” engines to pass air pollution tests despite being as dirty as any other diesel engine the rest of the time. To their credit, the company owned up to the wrongdoing with surprisingly little fuss and appear to be accepting the massive fines our government is hanging on them, although so far they have not agreed to hand over the five executives who are currently believed to be in Germany. Personally, I was very disappointed to learn that the widely-hyped technology that could make diesel engines much cleaner than regular gasoline engines was a hoax; I still believe that we need Clean Diesel, and will need its potential more than ever as alternative fuels become more important. But unfortunately, it seems that things are even worse than we thought…

You can pick up the ongoing story from the Bloomberg site, and I’ll update the link if there are updates. Apparently, the EPA is now charging Fiat-Chrysler with using specialized software in their car’s engine computers to lower the emission levels during testing – essentially a software version of what VW was doing with hardware. There’s no indication as of yet that Chrysler was also using hardware systems to produce false results, but that may just mean that the EPA hasn’t been able to prove anything so far. The other major difference in the stories is that the CEO of Fiat-Chrysler dismissed the allegations as “unadulterated hogwash” when he was asked about the case, and so far the company is stonewalling any attempt to resolve the issue…

Now, we should probably acknowledge right off the top that the US Department of Justice, and law enforcement in this country in general, has not had the highest possible levels of credibility in recent years. It really is possible that somebody at Justice is jumping the gun and attempting to bully Chrysler into confessing to the wrongdoing because they don’t have enough evidence to actually bring the case. And it is important to note that emission-control software isn’t actually illegal in the US; as the Bloomberg article notes, it can be used for a limited time under some conditions to prevent engine damage. But if that software has actually been programmed to detect test conditions and alter the engine’s emissions for the duration of the test from the profile it maintains during normal operation, then that is fraudulent. Whether the charges will stick, or whether anything will be done about the situations if they do, is another matter…

At the moment, the EPA’s enforcement people are saying that it is up to Chrysler to prove that they aren’t using defeat devices, but unless somebody in our government actually has proof that they are using such devices it does not seem likely that the charges would hold up in court. You can’t prove a negative, and you generally can’t ask someone to prove that they aren’t doing something without any evidence that they are, or at least that’s what they taught us in business school. The change in government that is set for the end of next week may also shake things up, since the incoming administration is expected to be much more business-friendly than the outgoing government has been. What remains to be seen is how the customers will react to this – and what impact that will have on sales…

When the EPA called them on it, Volkswagen owned up to their malfeasance and accepted the penalties without much further discussion. This may not make the affected vehicles look any better, but it definitely improved the company’s issue, turning the potential scandal into old news much more quickly than a drawn-out battle of words and accusations would have. By choosing to fight, Fiat-Chrysler is going to keep this case in the public eye for much longer, and if they are eventually proven to have defrauded their customers and the EPA the penalty and the impact on their reputation will probably both be much worse than if they had just come clean…

We should also consider that, if the company does turn out to be innocent of these accusations, then this is the correct course of action and they will have reason to be proud of their resolve once they win the court case. The question there is how much damage this situation will do to their sales and their public image in the meanwhile – and whether they will still be around when the dust settles this time…

How Stuff Works: Franchises

I was reading a story earlier this week about a man who owned a Dairy Queen franchise who apparently did not understand how a franchise agreement works. I say that because after he went off on a racist tirade that was captured on video and posted online he was still surprised when the parent company revoked his franchise and closed the location he had previously run. The only explanation I can imagine for the original meltdown, let alone the naïve belief that a public apology would be enough to extricate himself from this mess, was that the former franchisee believed that since he owned and operated his own business, no one could call him into account for behaving like an ass in front of customers or making the company look bad. But in a franchise arrangement this isn’t always the case…

You can find the original story from the Washington Post here if you want to, but there isn’t a whole lot more to it. James “Jim” Crichton had been the franchise owner of the Dairy Queen location in Zion, IL, until he was unwise enough to get caught on video yelling racist epithets and profanity at a customer. Although Mr. Crichton tried issuing a public apology and promising to put himself and his staff through sensitivity training, the parent company was no more impressed by that offer than the community in Zion was, although I would imagine the fact that one of the things he was recorded as saying was that he could call anybody anything he wanted to in his own restaurant probably didn’t help in either case…

The reason I am calling Mr. Crichton’s understanding of franchises into question is that control over the operation of these locations is the entire point of franchising a Dairy Queen in the first place – at least, as far as the company is concerned. Selling somebody a franchise license is, by definition, cheaper than building and staffing a new store yourself. Once the franchise makes back the franchise fee the subsequent profits will be much lower for the company, but that can take years, and long before that happens the company should be able to sell another franchise somewhere else. But if it were to become known that any Dairy Queen franchise is selling an inferior product, or, as in this case, an inferior dining experience, the company’s chances of selling either Dairy Queen products or additional franchises will drop significantly…

For this reason, all major franchise contracts incorporate quality standards, and most of the ones that involve consumer services also place requirements on the behavior and conduct of the operator and his or her employees. Without seeing the Dairy Queen franchise contract I can’t tell you how strict their version happens to be, or how draconian the penalties for failing those quality standards are, but the ones I’ve seen from other fast food chains also had provisions that would have allowed the parent company to revoke the franchise under these conditions. In the case of a McDonald’s franchise, the company would not have to return the franchise fee, either, and a McDonald’s franchise can run upwards of $2 million USD just for permission to start one. Unless the Dairy Queen corporation is a great deal more understanding than any other I’ve ever heard of, the tantrum in the linked story may turn out to have been a seven-figure mistake…

Now, I don’t want to suggest that franchises, or even licensing agreements, are by any means simple. There is no way I would ever negotiate, let alone sign, such an agreement without advice of counsel and a great deal of background research. But in all honesty, if I’m going to sign a multi-page contract that not only lays out how much money I have to pay someone else but also the conditions under which they can repossess the property they are selling me without refunding my money, I’m going to be very careful about remaining in compliance with that agreement. Because the fact is, despite the name, you don’t really own a franchised business. You may control certain rights, but ultimately you are operating a branch of somebody else’s company, and they can and will dictate the terms and conditions under which you are allowed to do so…

If that idea bothers you, or if you want to truly have the right to scream any racist, sexist, profane or stupid thing you want in your place of business, then you’re going to have to start your own…

Watching Them Watching Us

I stumbled across an article this week – it’s Maureen Dowd’s op-ed piece in the New York Times – talking about how people using the Uber service are rated by the drivers at the same time and in the same ways they rate their drivers. There have already been issues with Uber drivers, who are all independent contractors not employed by the company, not conforming to the same standards of service or safety; there have also been cases of complaints about user ratings that are delivered by mean, spiteful, or simply insane customers that bear no relationship whatsoever to what actually occurred. This kind of thing is to be expected in any customer service position, of course, and it’s one of the primary reasons it is so difficult to maintain staff levels in those positions. But this is the first case I have ever seen where customer service personnel are being allowed to rate their customers – with a similar disregard for accuracy or fairness…

In the article, Ms. Dowd notes that while some of these reviews are based on interactions with the customer – such as people who keep the driver waiting or are rude during the ride – some of them are as simple and petty as people who are not fun, friendly or appealing to drive around, and even worse, there does not appear to be any control in place over these potentially damaging ratings. The author goes on to note that some users recommend paying additional cash tips (ones which will not be reported to the company or the IRS unless the driver wants them to be) and promising to give the driver a 5-out-of-5 rating in return for receiving one as a customer. However, there’s no way to tell how prevalent such methods are, or what effect (if any) they actually have on your desirability as a customer…

Now, we should probably acknowledge that any public-contact job is going to be made more difficult by the tiny percentage of customers who will inevitably end up being horrible people. In the case of Uber drivers, we’ve already had stories about drivers refusing to pick up people with service animals, people who did not appear to be sufficiently clean, or people who smelled bad, and having people throw up during the ride has become so common that the company has had to institute a standard fee for cleaning it up. There haven’t been any confirmed cases of customers using an Uber ride as a washroom or a brothel yet, but it’s not clear whether those things haven’t happened or if those cases just haven’t reached the media. Even the company itself would have no way of knowing about any such incident unless the driver elected to report it…

Given these working conditions, and the fact that Uber drivers have to be able to see a user’s profile before they can offer to pick up that user in the first place, I think we can assume that an ad hoc system of rating customers – and passing notes about which ones to avoid – would probably have come into being by now even if the company hadn’t chosen to provide one. In theory, such a system should help to enforce basic rules of behavior and courtesy for Uber passengers, just as the rating system for drivers should enforce rules about service, safety and upkeep on the vehicles; bad customers will not get offered a ride, and bad drivers will not get taken up on any offers to provide one. What isn’t clear is how often this system will lead to additional abuse – and what the company can be expected to do about the situation…

Imagine someone whose Uber passenger rating gets to be so bad that no one will stop to pick them up, forcing them to use a (generally much more expensive) conventional taxi. Now suppose that a driver does stop to pick them up, but will only agree to provide transportation if given a large cash-only tip – effectively raising the price of the ride. How long would it take before all of the drivers started demanding such tips in return for a 5-out-of-five rider review? Can the riders fight back by threatening to leave a poor driver review in retaliation? Or, more to the point, perhaps, how long is it going to be before all of the ratings are either quid pro quo arrangements or retaliation against the other party, all of which are completely useless to anyone (driver or passenger) trying to use the system?

This issue has always been a problem for sites that offer customer reviews of anything, from Amazon to online service providers, but unless the company has some revolutionary new approach that we haven’t seen yet, the problem has just taken on all new dimensions…

Will They Ever Learn?

For years now I’ve been writing in this space, and occasionally elsewhere, about the importance of front-line (first level or first tier) customer service, and in particular about how failure in this position can render everything else the company does irrelevant. The sad reality is that even if the entire company has excellent customer service personnel, and provides exceptional service in general, to that one customer who we have completely failed, our entire company’s record is zero. None of this is new information, either; ask anyone associated with a service or consumer business, and they’ll all tell you how important good customer service (and good customer relations in general) is to the survival of the company. Right before they go back to treating the customer service personnel like cannon fodder…

Part of the problem is that turnover in any public-contact position is going to be rapid, because of the corrosive effect that working with public has on most people. Even though the majority of all customers are good people, it doesn’t take that many instances of being lied to, stolen from, screamed at, insulted, or otherwise abused to sour anyone’s opinion of the customers they are supposed to be serving. Over time, even very good employees burn out, shut down, or just stop trying – at which point we need to retrain or replace the worst cases and try to motivate whoever is left. It’s hard to convince anyone to invest money in employees whom they know will not last – in much the same sense that it is difficult to side with shifty, short-lived cannon fodder over paying customers who are actually giving us money. But as Don Henley notes, “apathy is worse…”

Consider, for example, the case of cancer patient Lisa Love, who was attempting to fly home from San Diego to Texas on American Airlines. Between her illness and the effects of the treatment, Love was not feeling well and asked an American gate agent to call a wheelchair for her. Said agent failed to do so, telling the passenger that “Oh, you look fine to me” and returning to her regular duties. This resulted in calls to the company that were not returned, emails and tweets that apparently never got to anyone who was prepared to do anything, and eventually calls to a consumer-advocate reporter and the resulting television news story and Internet account that you can view here if you want to…

Now, it’s not hard to imagine how something like this could happen. Think of any major airport on a busy day, and imagine a busy gate agent, trying to get a couple of hundred hot, cranky, generally uncooperative people onto an airliner without delaying the flight or throwing things any further behind schedule, when an apparently healthy passenger asks her to drop everything and summon a wheelchair and attendant. Maybe the agent is trying to cover the work of three people; maybe she’s had dozens of able-bodied people request wheelchairs so they can avoid having to walk a hundred yards extra; maybe she’s being paid peanuts and knows the odds of a raise this side of retirement are virtually nil; maybe it’s just a really crappy day. But however it came about, the company is now being mocked by dozens of scruffy bloggers all around the world for something they really do know was a bad idea…

If you consider the airline industry as a whole over the last thirty years or so, you will note that there is only one U.S. carrier that has consistently made money over that time period – it’s Southwest Airlines, which is known as much for its “Positively Outrageous Customer Service” (as the company calls it) as they are for their cut-rate airfares and slightly skeevy airplanes. I don’t believe this is a coincidence, any more than the success of Nordstrom is. Nor is it a coincidence that Southwest has generally taken better care of its employees than the industry standard. In almost every industry, if you examine the most successful companies, you will find that all of them have the best customer service and the best human resources practices of any firm in that industry. One could almost believe that there was some direct causal relationship…

None of this will come as any surprise to any student of management – or any experienced air traveler, for that matter. One has to wonder if American Airlines is ever going to take this lesson to heart, however…

How Would It Look?

Some time ago in this space I brought you the story of a tragic natural gas line explosion in California, and how the utility company who owned the lines had been accused of giving all of its senior management personnel lavish wages, raises and bonuses using the money that they claimed was being used to upgrade the line and improve safety measures. At the time it seemed fantastical, the stuff of Dilbert cartoons and comedy scripts about unscrupulous business leaders, more concerned with fattening their bank accounts than they were with the safety of thousands of innocent people. Now it turns out that things were actually much worse than that…

According to a story in this week’s Los Angeles Times, the utility company in our story, Pacific Gas and Electric (PG&E) had indeed requested permission from the Public Utilities Commission to use $5 million worth of ratepayer (customer) money on the gas line replacements and upgrades, as I reported in the earlier post. However, it turns out that this was the second time all of this had happened; the Company had also requested $5 million in 2007 to perform the same work, and had given it to their senior managers as wages and bonuses that time too…

The Times does not speculate on how many more times PG&E might have tried the same maneuver before they were finally caught, or whether they ever would have been had a tragic and completely preventable disaster not occurred. I believe that we are justified in asking that question under the circumstances, however; and if I was one of the people whose lives and property were placed at risk so that a bunch of very wealthy people could become a little bit wealthier, the question would be more of a lawsuit and less of a rhetorical device…

The thing that puzzles me the most about the situation is that no one inside or outside the company seems to have questioned these rather questionable decisions. Some sources have claimed that amount of the misappropriated funds goes as high as $100 million and took place over a much longer period, and the fallout from the scandal has resulted in national attention of the very worst kind, changes in Federal law governing gas pipeline safety, and indictments that could result in fines of as much as $1.4 billion, none of which even considers the ongoing civil trials for injuries, wrongful death, and destruction of private property…

Popular culture fantasies (and nightmares) aside, most companies in real life will tend to avoid wildly irresponsible actions even when the possibility of natural gas explosions isn’t present, if only to avoid being the subject of countless blogs, Internet news stories, television programs and eventually even books and movies in which the intelligence of their leadership is compared unfavorably to that of a newborn gerbil. In the case of a publicly-held or investor-owned company there is a very real chance of a stockholder’s revolt (or the equivalent) during which the entire senior management team and the Board of Directors who were supposed to be supervising them will all effective get fired, and even a private company would have to be worried about banks refusing to loan them money (because they might not be around long enough to pay it back), investors refusing to buy their bonds (ditto), or vendors refusing to sell them anything on credit (see above)…

Nor would any reasonably sane businessperson expect the sort of misbehavior PG&E has been accused of remaining confidential during the Internet age. Exposure and scandal were already a problem generations ago – look up the curious events that happened at the Watergate complex in the early 1970s, if you don’t believe me – but today it’s a virtual certainty that anything the company does will leak out eventually. The era when any company could go about its business and not care about how any of its actions would look in the media has been gone for decades, or possibly centuries, and it is far past time that managers of all types and levels stopped making choices that even a rodent born a few minutes ago would consider insane…

Protection from What?

By now most of you will be familiar with the automobile company that calls itself Tesla Motors; some of you may also be familiar with its products, which are considered to be some of the most advanced electric vehicles in the world. What you may not have realized is that in addition to changing the way cars are designed, built, marketed, and refueled, Tesla Motors has also changed the way cars are sold, operating almost entirely online. There are display locations (the company calls them “Galleries”) in a number of states where you can examine a Tesla vehicle, and the company is working on how to arrange test drives, but nothing quite like the traditional franchised car dealerships used by all of the other companies that sell cars in the United States. As it stands, you can go online, choose all of the options you want in your Tesla product, including color scheme, place your order, and have the car delivered to your door

Compared to the traditional method of selling a car, this new approach has a number of advantages – the largest of which is cost. Tesla isn’t collecting franchise fees from its dealers, which must have some impact on their bottom line, but from a sales standpoint the company does not have the overhead a dealership experiences, either in payroll or physical plant; they also don’t have the dealer’s mark-up to consider. Tesla’s primary products to date have all be relatively expensive, but they’ve been able to offer them for sale at a lower price than any vehicle made for equivalent cost while still maintaining a greater margin than most of their competitors. You might expect the people who own the traditional car dealerships to see this as a direct threat to their business model, control of the market, and way of life, and to take any action necessary to stop Tesla’s sales operations. You would not be disappointed in that expectation…

You can pick up the story on the Bloomberg News site if you want to, but what they’re talking about is a bill that has already been passed by the Legislature here in Michigan, and is currently being reviewed by the Governor’s office, that will ban sales of Tesla products (or any other automobile sold using any channel other than a franchised dealership) within the state. Given that Michigan is home to all three of the major U.S. automakers, this legislation comes at the surprise of absolutely nobody. What I find surprising about it is the grounds the automobile companies and their governmental pawns are using to ban Tesla’s sales operations. “States are fully within their rights to protect consumers by choosing the way cars are sold and serviced,” said Charles Cyrill, a spokesman for The National Automobile Dealers Association, in an email to Bloomberg. He goes on to claim that without competition between dealers to keep the price down, there is nothing stopping the manufacturer from raising their prices…

As so often happens, I’m left wondering if the National Automobile Dealers Association is made up entirely of credulous idiots, or if they think the general public is so constituted. Dealerships do not usually compete with each other on price, because they are working from the same MSRP set by the manufacturer, and because they are working within protected territories guaranteed by their franchise agreements. But even if they did, the primary force holding down the price of a new car isn’t competition with other dealers; it’s the availability of equivalent products. If any giver carmaker raises their price above what the public is willing to pay for their product, all of their customers will just move to a more reasonably-priced alternative. That’s how a free-market economy works – at least, when it’s not being manipulated by powerful business interests through political influence…

Forcing Tesla to work through traditional dealerships would have no impact on the invoice price of the car – what it costs to buy one from the factory – it will only impact the price the customer has to pay for one, since the price differential is the dealerships’ only source of income. It has some benefit for the public, in the sense of creating jobs for franchise owners and car salespeople, but none whatsoever for the customers. In fact, the only real winners in this scenario are all of the other automobile dealerships and their franchising companies, who will have an easier time competing with Tesla on price if their newest competitor is forced to incur the same price structure under which everyone else labors…

How anyone manages to state with a straight face that such a bill represents anything other than blatant protectionism for the companies supporting the lobby group is beyond me, but perhaps that’s why Mr. Cyril chose to put this howler in an email instead of actually saying it in person. And while I’m sure we can all appreciate the U.S. auto industry’s efforts to protect consumers from more efficient direct sales channels, I highly doubt if anything this heavy-handed is going to help their public image – or keep Tesla from taking away still more of their market share…

Please Tell Me It’s A Hoax

There are times when you run across a story so absurd that you have to wonder if you’re being pranked, either by the news media or by the people in the story itself. The unfortunate fact is that much of what you can read about online, even more so than traditional news outlets, is completely untrue and was created for the sole purpose of getting you to repeat it and get upset about it. So when the story about an ultra-Conservative group attempting to run a donut shop founded and run by a high school student out of business because they don’t like the name of the place first hit my desktop, I made a determined effort to find some indication that the story was a hoax. Unfortunately, this does not appear to be the case…

You can go to the local ABC affiliate station’s website and read it for yourself if you like, but even the station is saying that they can’t take responsibility for all of the details being correct. The story goes that conservative groups in the small town of Front Royal, Virginia, have converted the community into something right out of a Hollywood movie script, waging war on anything they consider to be insufficiently religious, including all references to magic, the supernatural, popular culture, music, pre-marital contact (of any kind) between people of different genders, or – apparently – donuts being sold in a store with a 1950s pin-up theme. It’s not exactly a new concept – every few years another small town somewhere in America will drop into a Footloose scenario and outlaw parties, mixed-gender social events, dancing, or whatever else has its elders in an uproar. This is the first time on record, at least as far as I can tell, that theocratic groups of this type have gone after someone for the name and theme of an otherwise harmless business, however…

I’m not going to present this as an ethics issue because I don’t believe there is another side to the story – a group of people are using their alleged religious convictions to cover their bigotry and hatred for anybody and anything different from themselves. I should acknowledge, I suppose, that I have no evidence that these so-called “Christian Conservatives” would react any differently if the donut shop was being run by a male entrepreneur, or someone whose surname is more Anglo than “Ramos,” but I know which way I would bet if I had to…

What makes this a business issue – and brings it into my purview in this blog – is that what they are actually attacking is a successful business run by a young woman who has managed to start up and run her operation while attending school full time. Even if we are willing to stipulate that running a donut shop with a slightly racy theme does somehow interfere with someone’s ability to practice a level of humorless, joyless religious fanaticism that even our Puritan ancestors would find embarrassing –and I am not willing to so stipulate, in fact – that does not change the fact that these wingnuts are infringing on someone’s right to operate a business and earn a living. And if they can do that to Ms. Ramos and her donut shop, and get away with it, what is to stop them from targeting any other woman-owned, minority-owned, or otherwise inconvenient business? For that matter, how long is it going to be before people with no religious convictions whatsoever start making up whatever stories they need to in order to drive a competitor out of business?

Assuming that this hasn’t already happened, of course…

Now, I must once again point out that I don’t have any independent confirmation of the story. I hope, more intensely than I can possibly tell you, that the whole thing turns out to be a hoax; that there really is a Tiana Ramos and that her Naughty Girl Donuts is thriving and prospering, surrounded by supportive townspeople who can’t even imagine why anyone would make them out to be a bunch of hateful fanatics. Because if this story is true it should sent a chill down the back of every entrepreneur and business owner in this country – and I will fear for the future of our Republic…

Your Tax Dollars At Work!

The other day I was reading a story online about some of the agencies that have been receiving surplus equipment from the US military through the U.S. Department of Defense’s Excess Property Program. If you haven’t heard of this, it’s the same program through which the police force in Ferguson got all of the armored vehicles, assault rifles, tactical body armor, black uniforms and helmets, and other gear that made them look less like law enforcement officers and more like motorized infantry. In theory, this will allow local governments to obtain the equipment they would need in order to deal with major threats to the community, like terrorist attacks or natural disasters, without draining more money from their budget than they could possibly afford. In practice, however, there seem to be a few problems with this idea…

To begin with, any law enforcement agency that routinely makes use of this gear during non-disaster, non-catastrophe conditions is going to have an image problem. The sight of a wave of officers dressed in black tactical gear and body armor with military-grade rifles, grenade launchers, and armored vehicles is enough to convince anyone seeing it that the people running that agency have gone power-mad and are reacting with excessive force just so they can play with their exciting new toys. The sight of that kind of firepower being aimed at unarmed civilians staging a protest against unjustified use of deadly force is going to make an already tense situation worse, and the fact that such equipment (and the people using it) frequently are being used in inappropriate situations does not help…

Every time a police department deploys a SWAT team, complete with assault rifles and armored vehicles, in order to search for suspects who have never actually lived at the address being invaded, everyone in this country is a little less free than they had been, and all of the traditional animosity and distrust between underserved and disenfranchised communities and their local authorities become that much worse. But some of these scenes are enough to convince even social conservatives that things have gone too far. For example, last week the San Diego Unified School District acquired its own armored vehicle under this program, a mine-resistant ambush protected vehicle or MRAP, of the kind used for army patrols in Afghanistan…

You can catch the story from the local public radio station’s home page if you’d like; there are some really great pictures included (even if one of them has been digitally altered) that give you an idea of the size of the vehicle involved. The school district is insisting that they will only use the MRAP as a rescue vehicle, to knock down walls or transport children to safety in the event of an “active shooter” situation or a fire or earthquake. No one has explained, as yet, what is going to happen if they accidentally knock down a wall on top of some unsuspecting class, or how they appear to have managed to get through the last century-plus of operations without owning a vehicle whose armor can stop small-arms fire and IDE explosions, if this need is so critical. But nearly as bad, at least in my opinion, is the inherent squandering of government funds involved here – because that’s our money they’re throwing away…

Since the despicable attacks of 13 years ago today there have been exactly zero armed incursions on American soil, and exactly that many occasions when local law enforcement would have had occasion to use military-grade weapons to repel one. The world is a more dangerous place than it was decades ago, but nearly all of the threats to our nation and our way of life are made up of covert attacks and shadow warfare carried out at levels that local police forces will never encounter. The only possible benefit of this military surplus give-away is to require the armed forces to buy new gear, which funnels more public funds into the companies that make it. The whole thing is a mass of the worst possible kind of pork-barrel spending, covered with a two-faced mock-patriotic flag-waving justification stinking to high heaven of both social and financial inequity…

And I object to it, in the strongest possible terms, because the funds we are giving away consist entirely of money we are borrowing from other nations – some of which aren’t all that friendly…

What Can I Say?

I’m not sure how much I can add to the stories you’ve already seen going around the Internet about the hotel in Upstate New York that is supposedly charging wedding parties a $500 fee for each negative review posted about their establishment on Yelp. If this story is true – and it has been repeated on a number of legitimate news channels, as well as being mocked on the Tonight Show (among others) and no one is suing yet – then it’s an incredibly bad move in terms of both customer service and public relations. The hotel is claiming that it was merely a joke, made in reference to a guest complaint from years ago, but anyone who has ever spent a day working in any customer contact position could have told them that you don’t even joke about such things. Especially now, when any stupid prank you make could end up being shared with literally everyone in the world who has access to a computer. But from where I’m sitting the real questions are what to do about a public relations crisis of this magnitude – and will any of it matter?

First of all, it seems clear that whoever is running the hotel needs help with his or her advertising and website design, and should probably consider investing in assistance from one of the small firms that consult on such matters. People are always reluctant to do this, and I’ve never been sure of why. What is wrong with seeking help from someone whose professional knowledge of a critical aspect of your business is greater than your own? In this case it does seem a bit like closing the barn after the horse has run off, but it’s still better than standing in the open doorway looking like an imbecile. At the very least, the hotel management could check over their files to see if any former guest has ever been hit with a “negative Yelp reviews” fee – or even threatened with one for real – and then provide an apology and a refund of the $500. They should probably also have some competent third party go over their website and make sure there’s nothing else on it that could set people off…

The bigger issue is that once a story like this goes viral it can be incredibly difficult to kill off. There has never been any truth to the Neiman-Marcus cookie story, for example; at the time this canard began making its way around the Internet the company didn’t even sell cookies. Yet this remains one of the more common urban legends online over a decade after Snopes.com (among others) completely debunked it. The hotel probably doesn’t have the funds to take out full-page ads in a major newspaper denying the story, and so far denials online and in social media don’t seem to be helping. Reaching out directly to every past customer they can find and apologizing to anyone they actually charged for the negative reviews might help; explaining it was a joke and promising that they would never really do any such thing might help if they didn’t actually charge anyone. But their best bet is probably a mixture of competence and time…

The other side effect of the Internet age is a very low attention span – and a very short news cycle. By this time next week some other outrageous thing will probably have happened, and everyone in cyberspace will be off mocking someone else. If the hotel takes down anything online that could be considered rude, weird, or unfriendly, refunds any charges they have to, and makes a point of taking care of all future guests – whether they gave good reviews on Yelp or not – they might be able to live through the firestorm and rebuild their brand and their client base the old-fashioned way: one relationship at a time…

Unless they really are trying to cover up for substandard service by trying to suppress any bad reviews…

Seriously?

Every once in a while the tone of this blog will get much darker than I really like, and I will end up reminding my readers (assuming I have readers) that I’m really a business teacher and not an Internet comedian after all. I have similar issues in my personal life, as I sink deeper and deeper into middle age and start catching myself acting responsibly and making mature decisions. At such times I will generally go out and do the most juvenile I can think of that won’t get me shot, arrested or fired (into which category, alas, running around pelting people with cream pies and yelling “Ya-HA! Ya-HA!” does not fall), and when I feel the blog is getting too dark I will try to find you a story about something completely stupid. There was a story about a botched refund this week that should do the trick…

According to the story from the local ABC News affiliate, a woman in Jacksonville, Florida was having trouble with a used car dealership that was failing to honor the warranty they had sold her. So she reported them to the State Department of Motor Vehicles, and after due investigation the dealer was ordered to refund her the money she had paid for the repairs. So they did – in loose change. Specifically, it was about $85 in pennies and the rest in $1 bills…

Now, I’m not going to dispute that pennies or dollars are legal tender, or that the dealership had a legal right to pay the refund in whatever fashion they felt was appropriate. My questions are why anyone would risk venting their spleen – and making themselves look even worse to potential customers – by pulling this sort of prank, and also where a car dealership got 8,500 pennies in the first place…

In the Internet age, most businesses that want to be successful are very careful about their public image, and in particular about their online reputation. We’ve already seen people threatening to sue online review sites like Yelp and Angie’s List for damaging their reputation, and there are persistent reports of various companies large and small paying people to leave positive reviews about them and artificially improve their online rating. By the same token, if you’ve done something as blatantly stupid as playing games with the small print on a contract and then getting called on it by the State government, I would think the last thing you would want to do is create a funny story that will get you mocked by thousands of scruffy bloggers around the world…

The second part of the question is why anybody would go to such lengths to pull such a prank in the first place. Car dealerships aren’t normally cash businesses, and unless this one also doubles as a bank there is no reason for them to have 8,500 pennies around in the first place. That may not sound like a lot, but that’s around 50 pounds of coins. If you wanted to roll them it would be enough for 170 rolls of pennies, but these were apparently just loose in a couple of bags. Unless the dealership also doubles as a strip club it shouldn’t have had 215 loose $1 bills lying around either, but I think we can probably conclude that the owner went to the bank after deciding to be rude to his customer…

Okay, so this story isn’t an atrocity. The customer in our story can almost certainly roll up the pennies and take them to her bank, and she can probably use the dollar bills to buy coffee or pay tolls or what have you. And it is possible that the owner of the dealership believes that there is no such thing as bad publicity, and is laughing all the way back to the bank. But I prefer to believe that it’s a prank gone wrong, a customer’s multi-media revenge, and a cautionary tale for anyone who might have been planning a similar stunt – or anything else that will bring you to the negative attention of the public…

Not Another Follow-Up!

Last week I brought you the story about the Comcast retention specialist, and the disastrous audio recording of him fighting like a man possessed to keep a disgruntled customer from disconnecting that has been going around the Internet. At the time I speculated that the company might have a policy about not letting people leave, or quotas of people that each retention specialist has to talk out of it, or even that such measures might be part of the compensation package offered to these personnel. As the follow-up story on the Slate site makes clear, it’s actually much worse than that…

According to the informant cited in the article, who claims to be a former Comcast employee and appears to have the documentation to support his or her claims, the company pays its retention personnel on a salary plus commission scheme similar to those used by many sales organizations. The salary offered is very low, often just a few dollars over minimum wage, and the majority of the compensation is based on preventing a specific percentage of your calls from resulting in an actual disconnect. This would be difficult enough, but the story also claims that the company uses target thresholds, or “gates,” to drive their people harder and avoid paying as much in “bonus” money…

On such a system, instead of collecting the percentage of your incentive money that corresponds to your performance (e.g. you have a 70% retention rate, so you get 70% of the money) you must be over a certain target to get anything above your insultingly tiny salary. If the threshold levels are half of your bonus at 75% and full bonus at 85%, and your retention rate is 74%, you get nothing. And while it is possible to survive on 16,000 to $20,000 per year in certain parts of the US, I’m not currently aware of any place in this country where you could live well on that salary level – especially if you have a family to support…

Now, I suppose one could argue that nothing is keeping these Comcast reps from finding better jobs; one could also argue that if there is a surplus of people willing to do these jobs at this price level then the company would be mad to offer more. The job market is controlled by the law of supply and demand, just like any other free market, and recent experience in the United States has demonstrated that there are people who will work for rates even lower than the minimum wage if you ask them. However, none of this has anything to do with my original contention, which was that using such methods will motivate people into the wrong behaviors…

If the company’s incentive program rewards people for retaining customers, but does not reward them for providing helpful and courteous service, then people will try anything they can think of to retain customers and pay no attention to courtesy – or even common politeness. This is the same problem that causes salespeople to be impatient and rude to someone who isn’t making a large purchase, waiters to ignore patrons who aren’t ordering anything expensive, and many categories of personnel to try to sell people expensive goods and services that the customer does not want or need. All of these behaviors lead to lower standards of customer service, inferior public image, deterioration of the company’s brand, and ultimately to destruction of the company’s bottom-line value…

As tempting as it might be to blame the Comcast fiasco on one bad employee, or even on one bad policy, what this actual represents is the single most common logical fallacy in any service economy – and one of the most common misapprehensions in all of management theory: the belief that our employees are nothing more than machines, and all we need to do in order to increase their output (work) is to increase their intake (pay). I’d be a little more charitable about the whole thing if we didn’t have over five decades of research that prove this is garbage…

Like It Was Hard

After you’ve been writing a blog like this one for a few years, pointing out various types of business failure, mocking people and organizations that really should have known better, and generally getting on people for mistakes that seem obvious after the fact, it gets increasingly difficult to avoid saying “I told you so” (or perhaps “I informed you thusly,” if you watch The Big Bang Theory) when somebody makes a completely predictable mistake. I’m on record as saying that you should never second-guess the decisions somebody else made in a crisis; they were there and you weren’t, and we have no way of knowing what your actions would have been. But when it’s a business policy, not a single decision, and it blows up a way that any small child could have predicted after dozens of business writers in addition to me have been going on about it for years…

Take, for example, the recent case of a customer service fiasco at Comcast. It really should have been a non-issue: a customer had decided to cancel their service due to dissatisfaction with the company, and had declined all efforts to retain them. Any service provider is going to get calls like that, because no matter how hard you try to improve your service or support functions there will always be somebody who doesn’t like something or who just manages to fall through the cracks. If you do business with 10,000 customers today, and all but one of them are happy with your service, you can correctly claim to have a 99.99% customer satisfaction rating. However, to that one remaining customer whose appointment was entered for the wrong time, whose bill was miscalculated, who was accidentally left on hold over someone’s lunch break, who was not informed of a service interruption because his or her telephone number was not recorded correctly, or any of a thousand other minor failures, your success rate is 0%, and their satisfaction will change accordingly…

So why didn’t the company’s representative just process the disconnection and let it go? Without access to Comcast’s Human Resources files I couldn’t tell you for certain; it’s possible that the company has a bonus for the number of customers you talk out of disconnecting, or a penalty for the number of customers you weren’t able to successfully retain; it’s also possible that the rep in question or even his work group as a whole were being admonished for losing too many customers lately. Perhaps Comcast isn’t recruiting the right people, or isn’t providing the right training, or perhaps every one of their thousands of customer service representatives is great except for this one. But for this one particular customer, the company is every bit as bad as its horrible reputation would suggest, and now the audio recording of the call has gone viral, making the company a laughing stock yet again…

I’ve written in this space about the need for top-flight customer service personnel; I’ve gone on at length about how to recruit them, how to train them, how to lead them, and how to make them better. But my most often-repeated comment has been about how the customer service representative may well be the lowest-paid, least-educated, least-trained and most-ignored member of your entire corporation, but if he or she performs poorly enough on any given call nothing else is going to matter. You are going to lose that customer and everyone he or she can persuade to follow them – and in the Internet age, if your customer service rep is bad enough for long enough it’s only a matter of time before somebody records the call and starts playing it for everyone in the world…

This disaster wouldn’t have been easy or cheap to prevent – but it’s not like it was difficult to predict that something like this was going to happen…

Outrage in the Air

Looking back over my records I find that nearly 10% of all of the entries for this calendar year have involved airlines behaving badly; usually in some completely preventable way that inconveniences, endangers, monetarily damages or just outrages customers and potential customers. Some of these merely reflect momentary lapses of reason or cases of outright incompetence (such as failing to get an unescorted minor onto the correct flight), while others involve blatant criminal malfeasance (such as the employees accepting bribes to smuggle packages onto departing airliners), but nearly all of them are things so absurd that it passes understanding how a service-providing company can do them and remain in business. It’s almost enough to make you believe in collusion between the major companies in the industry – not to fix prices or to defraud the public, but simply to maintain service levels bad enough to convince the travelling public that one airline is much the same as any other…

Now, in fairness, operating a company that transports tens of thousands of people for billions of air-miles aboard complex machines that can be rendered completely inoperable in seconds by a single mistake by a single employee trying to park one of them is harder than it looks. To make matters worse, in recent years it has become increasingly difficult to differentiate one airline’s service from another, which has left many of the major carriers competing entirely on price. There was a time when it was possible to charge more for higher-quality food and drink, better services, or even (it has been done) more attractive cabin personnel, but today most carriers have to cut back on everything to remain competitive, which includes lowering expenses for recruiting, training, and especially salaries. What is less clear is how far one can lower staffing quality before the resulting lawsuits begin to eliminate any resulting savings…

Take, for example, the case of Angeline O'Grady, who was attempting to transport her late husband’s ashes to England for burial on a US Airways flight, when a TSA idiot insisted that since ashes aren’t a solid they had to go in her checked baggage. A competent airline might have tried to accommodate a customer during a difficult time, but US Airways gave away her seat reservation and forced Ms. O’Grady to pay for a business-class seat since she was delayed checking in by the aforementioned TSA idiot. That would merely be callous; however, when Ms. O’Grady landed in England she discovered that at some point during the flight, someone had opened her suitcase and stolen the urn containing her late husband’s remains…

As I have noted in earlier posts, a failure in operational security this severe has a very real chance of destroying the entire airline (as well as any aircraft that somebody manages to sneak a bomb onto because no one was paying attention). Here again, a competent airline might have considered apologizing for the theft, launching a serious investigation, calling on law enforcement agencies on both sides of the Atlantic to help them find out what happened, firing everyone who had access to the relevant baggage facilities during the time when the urn was stolen, or having all of the employees who could have stolen the urn arrested and letting the police/FBI/Scotland Yard figure things out from there. I’m not sure I have an adjective appropriate to describing an airline refusing to so much as explain what they think happened, and claiming they have no responsibility for the theft and did nothing wrong; calling this “stupid” would be an insult to stupid people. And that doesn’t even consider stonewalling the customer and attempting to tie up the case in court once the customer finally got a lawyer…

Here in one story we’ve got criminal negligence (leaving the baggage vulnerable to theft), criminal malfeasance (assuming it was a company employee who committed the theft), incompetent customer service (charging a bereaved widow for a more expensive ticket? Really?), incompetent public relations (saying things like “we’ve done nothing wrong” after losing someone’s mortal remains), incompetent operational management (letting things escalate to the point we found out about it) and incompetent senior management (not just quietly settling the case and moving on). And the company isn’t done yet; a few weeks ago attorneys representing US Airways filed a motion to move the case to Federal court, since this outrage took place on an International flight. That will hold up proceedings, make the whole case harder and more expensive to try, and might cause Ms. O’Grady to give up, but is almost certainly going to make a bad situation even worse for the airline…

To quote the late Frank Zappa: “It’s not getting any smarter out there, folks…” Keep watching the skies, everybody, because there’s no telling what kind of shenanigans will be going on up there next…

What Could Possibly Go Wrong?

Every so often you will run across a news story that makes you assume that either the reporter who wrote it has gone barking bad or you have; something so surreal that you find yourself looking for signs of Photoshop even when you know there won’t be any. Or, at least, that was my reaction when I saw the story headlined “Giant yellow duck explodes in Taiwan” at the head of an AP story featured on an Australian news site…

It turns out that the duck is the work of a Dutch artist named Florentijn Hofmann, and it’s a larger version of a 2007 piece (the original was 16.5 meters tall; the current duck is 18 meters tall) that made the news a few years ago when it got loose from its moorings and became stuck up against a large bridge in Europe, effectively blocking boat traffic along a river/canal system for several hours before it could be towed out of the way. Since then, the ducks have toured 13 cities around the world without significant incident, until a powerful earthquake in Taiwan knocked out the air pump filling the current duck, causing it to partially deflate. When power was restored and the exhibiters began re-filling the duck a combination of poor handling and unfortunate winds caused the duck’s rear to blow out and flatten the entire structure…

I have often heard people claim that all strategists are inherently pessimists, because of the time we spend trying to anticipate all of the things that could go wrong with any project we’re working on, and the effort involved in working out contingency plans for those events. People who have actually spent time developing or implementing strategy will tell you that they are realists, concerning themselves with what to do in the event that specific outcomes occur, rather than just assuming that something bad (or good) will happen because it can. We should probably admit that this does lend itself to spending a lot of time determining all of the things that can go wrong and working out responses to them, since it generally isn’t necessary to make contingency plans for coping with success. However, this doesn’t make the process any less important…

If we are working with any structure or installation that requires electrical power in order to function, including the electric air pumps needed to keep a giant duck construct inflated, then it isn’t unreasonable to take some time and consider what you should do in the event that the local electrical power grid goes down. This is especially important if the local grid is rendered less than 100% reliable because of faulty generating plants, government malfeasance, operational incompetence, or regular natural disasters (such as earthquakes) that interfere with power generation or power transmission. By the same token, we should probably consider what we will do if the water currents or prevailing winds are stronger than expected (or are going in an unexpected direction), what we will do in the event that the duck gets loose from its moorings, what we will do if the duck becomes stuck against a bridge or overpass, and how we will deal with the negative news stories, civil lawsuits, and public backlash against us and/or our duck…

Because the truth is that an 18-meter (60 foot) tall rubber duck construct is a wonderful and whimsical thing, and we should not permit minor challenges in operations or safety to interfere with the viewing public’s enjoyment of our duck. And while it isn’t strictly true that everything that possibly can go wrong does – sometimes there are multiple bad outcomes that are mutually exclusive, for example – it’s still our job to identify and plan for as many of those contingencies as possible...

Because if anything is certain in this world, it’s that there are more potential failures lurking behind the scenes than we have planned for so far…