Two Kinds of Error

Over the past decade I’ve devoted a lot of time in this space to complaining about – and occasionally making fun of – the vast oceans of misinformation that can be found almost everywhere online. Although, to be fair, I mostly complain about people who blindly accept everything they read online, and make fun of the often nonsensical actions they take in consequence. For example, some years ago I wrote about a bit of clickbait claiming that Don Knotts had just revealed the “real” reason for his departure from the Andy Griffith Show, despite the fact that this iconic American actor had been dead for eleven years at the time. I also strongly implied that anyone who blindly clicked on the link, let alone believed the absurd misinformation they would find there was a complete sucker…

Recently, though, I’ve become concerned with the opposite phenomenon appearing with increasing frequency – that is, people finding perfectly reasonable, carefully documented information online and refusing to believe it anyway. One could argue, as I have on occasion, that this error is the other side of the same coin. For example, members of the “anti-vax” movement heard about a single, laughably unprofessional, long since discredited theory about vaccines being tied to autism, and have re-introduced potentially fatal diseases into the United States while they cling to that theory, while as many as one-third of Americans have seen repeated information explaining how the use of facial coverings could end the pandemic in a matter of weeks, but are still refusing to wear them…

The point was brought home to me personally this week when I ran across a Buzzfeed list article about outrageous things college professors said their students had done. It would be easy to dismiss the entire list as being fictional, or at best highly exaggerated, except for the fact that I have seen several of these behaviors first-hand over the last decade at work, some of them repeatedly. It isn’t at all unusual for students to cite things their mother told them as proof of their thesis, demand an explanation for receiving zero credit for work they copied and pasted directly out of Wikipedia or failed to turn in at all, or demanding a different presentation date despite having had four months to prepare…

Any readers familiar with statistics (assuming I have readers) will recognize this basic problem as the difference between Type 1 and Type 2 errors, but if you are unfamiliar with the terms, the upshot is that accepting incorrect information is just as problematic as failing to accept correct information. That is, accepting universally-acknowledged quackery is going to be just as harmful as rejecting elementary best practices, even in cases less serious than the spread of potentially fatal pathogens. And in the current age of information, both types of error are far more dangerous than they have ever been before…

This post was originally going to be a humorous and sarcastic set of comments on things I saw in the classroom as a college instructor, including a few things even more absurd than the people at Buzzfeed put on their list. I could tell you stories about the kid who not only plagiarized a paper, but tried to turn in a paper that had been submitted to me, in the same class, during the previous semester, or the unfortunate individual who missed a term paper deadline because he was in jail that morning. But half-way through that post I realized that there was an actual point to be made here…

In today’s interconnected world, every one of us has access, at least in theory, to every bit of information, reliable or not, that has ever existed. Verifying any particular fact you come across is easier than it was at any previous time in history, but figuring out which data points you should accept, and which ones must be rejected is arguably the hardest it has ever been. Regrettably, though, the consequences of making either error are also orders of magnitude worse than they have ever been – and the fact that we are now being inundated by people deliberately spreading misinformation, disinformation, or outright lies is not helping. Going forward, all of us have got to try harder to get this right, before we lose another half-million (and counting) people for no reason at all…

Think It Through

There are times when I really wish I had chosen to study Marketing in business school instead of Management. The first time, at MBA level, I still believed that there was a place in the world for a generalist who just wants to get on with the job at hand. The second time, I was looking for the answer to why the senior management teams of otherwise perfectly good companies keep running their firms directly into the ground, and it seemed reasonable to study the actions and strategies of the senior managers themselves. And, of course, both times through I knew I didn’t have the math for it. But quite apart from that, and leaving out the absurd bias my former department has against applied research (and the practitioners who apply it), I have noted a large number of the aforementioned management failures that relate directly to marketing decisions that even a reasonably bright six-year-old would have known better than to make…

A case in point would be Burger King’s attempt at a marketing tweet this week. I picked up the story from USA Today, but you can find details about it all over the Internet as of today. Actually a series of three tweets, the first one said “Women belong in the kitchen.” The second one pointed out that women comprise only about 20% of all professional chefs, and the third tweet introduced a new Burger King program to provide scholarships for women attending culinary schools – thus correcting the shortfall. It’s a marketing/public relations move that has some real potential, timed to coincide with International Women’s Day 2021, but whoever came up with it seems to have missed just how badly the first tweet would be received – and how likely people were to ignore tweets two and three, particularly if they were already angered by tweet number one…

It seems possible that the company was attempting to emulate the success that Wendy’s has already had with their company’s Twitter account, which has become known (if not exactly famous) for its humorously sarcastic tweets over the last few years. Unfortunately, whoever came up with this triple tweet appears to be unfamiliar with the convention of indicating a multipart tweet by putting the notation 1/3, 2/3, and 3/3, or however many tweets the message takes up. They’re also ignoring the tendency of people to stop reading something that angers them, as well as the fact that this particular message is neither sarcastic nor amusing…

Now, I don’t mean to imply that if I had a Marketing degree I would be able to tell any company when their attempt at being hip, edgy, or at least relevant was about to crater. But this isn’t the first attempt at Twitter advertising or other online marketing attempts to fly wide of the mark, and it isn’t even Burger King’s first absurdly offensive failed marketing attempt. Regular readers of this blog (assuming I have readers) will recall an earlier post about a Burger King ad featuring a new oblong burger product and a woman’s face apparently looking at it with an expression that could be interpreted as awe, fear, or revulsion, depending on your point of view…

It doesn’t take a lot of familiarity with failure analysis, let alone a graduate degree in Marketing, to recognize that the company has an unfortunate history with advertising that is not as clever or funny as they think it is, or that any future attempts at witty, edgy, or viral advertising are likely to attract greater scrutiny than they seem to have expected. You have to wonder if the person operating the Burger King  twitter feed ran this idea past anyone else – and if so, whether the “anyone else” included any actual women. Or, for that matter, anyone who had ever met an actual woman…

Other authors have written about the propensity of supposedly brilliant leaders in movies and television programs to formulate elaborate plans in which any ordinary six-year-old would be able to find obvious flaws, and suggested that if they ever have the chance to be the “evil overlord” or equivalent they will run all of their plans such an individual. It seems excessive to suggest that the senior management at Burger King should consider the same advice, but if they want the advice of a scruffy blogger who used to teach Business Strategy at a top business school, I do have some time available…

Why Do People Rob Banks?

The title of this post isn’t facetious, and it isn’t really sarcastic, either. If you’ve ever read a story about bank robbery, or looked it up online, you already know that most bank branches rarely have more than five figures worth of cash on hand, and never more than low six figures. They are also loaded with countermeasures, cameras, silent alarms, dye packs, and even armed guards. Even worse, from any potential criminal’s point of view, bank robbery is automatically considered a Federal offense, and will bring the FBI down on you faster than you would believe. There is an excellent chance of being killed outright, and an even better chance of being sent to prison, and even if you succeed in getting away with it, you’re probably going to end up with less than $100,000 for your trouble…

As an alternative, consider the case of Jessica Metivier, of Acton, Massachusetts, who was sentenced this week for her part in defrauding the United States Treasury Department of more than $50,000,000 USD. According to the story on the US Department of Justice website, Metivier and her partner, Christopher N. Condron, submitted grant applications for tax free energy grants as part of the American Recovery and Reinvestment Act of 2009, including wind, biofuels, and gasification projects, totaling more than $88 million dollars. As a former grant writer, I can tell you that such grant applications are incredibly detailed, and rigorously vetted by the granting agency. Getting one at all is intended to be as difficult as possible, specifically to avoid fiascos like this one…

It seems worth noting that this wasn’t a case where the defendants were immediately caught, either. The fraudulent applications first appeared in May of 2009, and Metivier and Condron weren’t charged with anything until August of 2017. One might have hoped that it would take less than eight years to detect such an offense, either by periodic audits, progress reports (that are required on all Federal grants, usually quarterly), or simply because somebody drove by the alleged site of the project and failed to see any of the large wind farms, gasification plants, or development facilities that should have been present…

I could absolutely understand if any or all of my readers (assuming I have readers) were outraged by the fact that some clown was able to defraud the Federal government for upwards of $50 million of your tax dollars and remain undetected (or at least unindicted) for more than eight years. But if that upsets you, you’re really going to be furious when you find out what Metivier’s sentence was: one year of probation. Condron’s case hasn’t been resolved yet, but since he’s being charged for stealing a smaller amount of the money, it seems unlikely that he will end up doing any worse than his partner…

Now, I have to admit that I haven’t had the chance to read any of the court documents, and I’m not suggesting that I would understand any of the legal aspects anyway. I don’t have a law degree, and my one semester of Business Law in business school probably wouldn’t be any help even if I had taken it more recently than 1991. But from a strategy standpoint, if you had to choose between a venture that would net you less than $50,000 and could easily result in 10 years in prison (or death), and one that would yield literally a thousand times more money and only result in one year of probation if you were caught at all, why on Earth would anyone select the first option?

All kidding aside, as one of the aforementioned taxpayers, I can’t help feeling that just having to spend one year in which you do not commit any crimes is rather a light sentence for stealing $50 million of our money. Even more to the point, though, is the question of just how many other teams of fraudsters are pulling off operations like this one – and of  how many of them, if any, have been caught in the first place…

Read the Room

I’m reluctant to use this title for a single post; if I tried I could probably come up with dozens, if not hundreds, of stories about tone-deaf moves by businesses and their management teams that have made the pandemic era even worse than it already was. Maybe I can start a regular feature on this topic, running every week to cover the most egregious example I can find in the previous seven days. For sheer idiocy, in terms of a move that does not work well under the current atmosphere, it may take a while to top the story of an employee who wrote to the CEO of Trader Joe’s asking for more rigorous anti-COVID procedures at work, and was promptly fired for his trouble, however…

I picked up the story from The Washington Post, but you can also find it on Twitter or any number of aggregation sites. A crew member working for Trader Joe’s at one of their New York locations wrote directly to the company’s CEO, explaining that more stringent measures were needed to protect the store crews, and that only the CEO had sufficient authority to impose them on the entire chain. Most of these were not terribly surprising, as workers everywhere have been asking for better air filtration, more time and supplies to disinfect the store interiors, and more conscientious enforcement of mask requirements. The only really innovative point in the letter was the request for a “three strikes” policy against customers who refuse to wear masks when inside the store…

It seems worth pointing out that employee recommended that the company accommodate customers who can’t wear masks due to medical conditions by using a curbside pick-up – a common measure taken by grocery and pharmacy companies, and one which Trader Joe’s already offers its customers. It also seems worth the mention that the company insists that it fired the employee in our story because of “the disrespect he showed toward our customers,” while telling the employee himself that the requests in his email and his temerity in emailing them indicated that he didn’t understand or practice the company’s “values,” whatever those might be…

What takes this over the line from poor management practice into complete idiocy is that the employee claims to have received stellar annual reviews, praising him for (among other things) his dedication to customer service and excellence in assisting customers – and the company has not disputed any of this as of this to date. Unless those reviews were all disinformation of some kind, it would appear that this employee is actually very respectful of the customers, and the company is actually taking offense at his request. In listing different causes in his termination letter and in their statement to the Post about this situation, effectively lying about the facts of the matter and slamming the employee, the company has not only managed to flush their own credibility, they have also sparked public outcry and calls for a boycott…

Now, I’m not going to suggest that the CEO of any company, let alone a national chain the size of Trader Joe’s, should have to consider and respond to every request received from one of their employees. I am suggesting that, if this story is true, then this matter was handled in possibly the worst fashion possible. It would have been much simpler for one of the CEO’s administrative assistants to reply with the company’s standard “thank you for your suggestion; we will look into it” message, and then ignore the whole thing. If anyone at corporate headquarters is actually mortally offended at the request that senior management “show up for” its employees by granting these requests, in return for the employees risking their safety by showing up for work every day despite the pandemic, they could always find some plausible excuse for firing this employee at some later point. Hopefully without triggering public outrage, giving rise to wrongful termination lawsuits, or making themselves look like a bunch of arrogant, thin-skinned, easily-offended idiots…

Alternately, I suppose, they could actually consider his requests…

Pull the Other One

There has been a lot of uproar over the last week over some of the current Administration’s more fantastical anti-immigrant policies in the Southwestern United States, with the Federal government going so far as to dispute whether people born in this country were actually born in this country, revoking passports from U.S. citizens without trial or evidence of wrong-doing, and demanding obscure documents – some of which have never been required to obtain any government license or permission before – in order to prove the bearer is actually a citizen. There are even cases where people born in this country have been rounded up and sent to deportation centers, again without benefit of a hearing. It’s difficult to see what, if anything, our current “Leadership” (and I use that term loosely) expects to gain from these activities. What, exactly, a bank would gain from copying them is anybody’s guess…

Regrettably, it would appear that this is exactly what Bank of American has been doing over the last year, however. You can pick up the original story from the Sacramento Bee website, or take a look at the American Banker magazine article about the backlash if you’d like to. The really bizarre aspect of these actions, at least from where I’m sitting, is that the Bank has been claiming that there have been no changes to any of its policies regarding consumer accounts, and they have been requiring exactly the same documentation for decades now. That is, the claims are bizarre because some of the affected customers have been doing business with B of A for decades, and there has never been any problem with their accounts until now…

We should probably note that there is no legal requirement that you must be a U.S. citizen to open or maintain a bank account in this country. You could understand why the bank might be having problems with someone who was using one of their accounts to commit a crime, or even using the funds in one of their accounts to finance criminal activities, but the only “crime” being alleged here is that the account holders may not be U.S. citizens. Moreover, given that banks make most of their money through commercial loans, in which they are using their depositors’ funds to earn interest from other parties, any action that annoys and offends people enough to make them close their accounts and change banks would make no financial sense even if those people were committing a crime…

I don’t believe that Bank of America has done anything quite as spectacularly stupid in recent years as, say, United Airlines having a passenger violently dragged off of an airplane because they had decided to give the seat he was already sitting in to a deadheading crew member, or Wells Fargo opening millions of fraudulent customer accounts. But stunts like trying to foreclose on people who never had a mortgage with them in the first place, ignoring court orders to compensate people for idiotic illegal foreclosures, and playing fast and loose with Federal fair lending laws have not given B of A the best public reputation. In fact, the only thing I can think of off the top of my head that would be worse would be implementing a blatantly racist and apparently opportunistic policy that wouldn’t net them any additional money even if it was successful…

There’s a great tradition in this country known as “voting with one’s feet,” where people will stop doing business with a company that they feel is behaving in a way so stupid, greedy, bigoted, and fraudulent that it isn’t safe to maintain that business relationship – or just maintaining business practices that annoy them more than changing banks would. Bank of America may believe that they are “too big to fail,” but considering what happened the last time someone started implementing criminal business practices based on that belief, now might be a good time to sell off any stock you have in the company – and move your accounts to another financial institution, before this one goes under or just freezes your funds…

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…

Ignorance is Curable

I was wandering around on one of the news aggregation sites, as I am wont to do, when I found a posting about the newest Kaman helicopter design being offered for sale. As an unabashed aircraft wonk, I was glad to see one of the pioneering companies in aerospace getting back into the civilian market in a (potentially) big way, but I found the posting itself annoying – the user who posted it was mocking the intermeshed contra-rotating twin rotor design which makes the aircraft lighter, safer, and far more stable than more conventional helicopter designs, implying that there is something dangerous about a design in which the rotor blades pass over and under the same point. In a pre-Internet age this would just be displaying one’s ignorance, but today there’s really no excuse for this kind of brainless nonsense…

Anyone with a working Internet connection could have found out that Kaman Aircraft introduced its first intermeshed design 71 years ago, with the K-125 prototype, in a ten-second search. Only a few additional seconds would be required to find the Kaman HH-43 Huskie, a similar design built for the U.S. Air Force, Navy, and Marine Corps that was in service for over 20 years as a search-and-rescue platform. You’d have to care about helicopters and/or military history to notice that the Huskie flew more rescue missions during the Vietnam War than any other type of helicopter, while establishing an unequalled safety record, but even if you’re just looking at the new Kaman designs you should at least have noticed how effective these aircraft are, especially for the price…

Now, I don’t mean to suggest that anyone who does not make a hobby of either unusual aircraft or military history (or preferably both) would or even should know about the Kaman intermeshed rotor types, let alone be able to explain the significant advantages provided by its drive system. Nor would I ever suggest that all new technologies should be embraced from the moment of their introduction, or imply that there have never been fatally flawed aircraft offered for sale. What I am pointing out here is that this isn’t just a mature technology; it’s more than seven decades old. Intermeshed rotor designs were in service twenty-two years before the packet-switching technology that makes the Internet possible was invented, and nearly thirty years before Jobs and Wozniak built the first personal computer…

I don’t expect that anyone who is in charge of acquiring new aircraft for any company that operates helicopters is going to get their purchase information from a random commenter on an Internet news aggregation site, any more than I expect random readers of this blog (assuming I have readers) to care about the history of esoteric helicopters. But making fun of any technology just because it is unfamiliar to you is asinine, and in a business context it’s another one of the ways in which people manage to destroy perfectly good companies just because they weren’t paying attention…

I strongly recommend that anyone who has a need for helicopters capable of transporting medium-sized external slung loads check out the new offerings from Kaman aircraft. And even more strongly that anyone who finds themselves confronted by what appears to be an exotic new technology take another few seconds and make sure that it wasn’t decades old before they were born before they make any decisions about it…

Still Waiting

About a month ago I brought you a short rant (short for me, anyway) about the realty of how corporate governance works, and in particular how the people who own and operate for-profit companies are under no obligation to act in the public interest rather than their own. Indeed, one could argue that the senior management personnel of any corporation have a fiduciary obligation to act in the best interest of their stockholders, regardless of any outside expectations, and should probably be fired if they do anything else. But apparently, no one has bothered to explain this concept (or share my post about it) with the current Administration, any of their more ardent followers, or the business reporters at The Atlantic…

The magazine appears on that list because earlier this week they published another article on the subject, explaining how Starbucks could have given every one of their employees a $7,000 raise with the proceeds from their tax break, and how Home Depot could have given out raises as high as $18,000 per employee. I’m not going to bother checking their math – somebody else almost certainly has, and the precise number isn’t important anyway. None of these companies are going to start offering people massive increases in salary any more than they are going to start manufacturing vast amounts of product that they can’t sell, because that’s not how a free-market economy works…

Companies don’t set their prices by calculating the very lowest amount they can charge without going bankrupt, they work out the highest price they can charge at which customers will still buy the product. Salaries work the same way – no employer is trying to offer its workers the highest possible amount of money, they’re trying to calculate the lowest amount they can pay before people will decide that the job isn’t worth the effort and walk away. These amounts may rise during times of high employment, or drop during downturns, but expecting a company to give away money when it doesn’t absolutely have to doesn’t even work in Command economies, let alone free-market ones…

Now, I don’t imagine that any of my readers (assuming I have readers) are really unclear on these concepts; all of this stuff is extremely basic economics. What seems to be getting lost on a lot of people who should really know better is that this is precisely why the idea of giving money to the owners and leadership of a company and expecting them to distribute it to their employees (or the public) for no apparent reason – the infamous “Trickle-Down Economics” – will never work. It’s not difficult to imagine why the tax reduction scam would be attractive to very wealthy people who will benefit from it directly, or to the elected officials who will be rewarded for passing it; what continues to baffle me is why anyone else would support this measure…

As I mentioned in my last post, I understand that economics can be a daunting subject, particularly for people who have spent decades being told that economics is difficult to understand. But the truth is, Trickle-Down economics can’t work in much the same sense that water won’t run uphill, trout don’t live in trees, and the ocean is not above the clouds. It didn’t work when the Reagan Administration tried it; it didn’t work when either Bush Administration tried it, and it isn’t going to work this time either. But it will suck $1.5 trillion out of our budget at a time when we supposedly can’t afford to heal the sick, feed the hungry, or educate anybody, let alone take care of the rest of the world…

Those Darn Activists!

If I told you about a group that claims to support individual small investors against the power of large-scale Wall Street investment firms, you could be forgiven for asking what the catch was. There was a time when cynics like me were a relatively small minority in the United States, but that time seems increasingly remote these days, and regardless of your political leanings you’re probably questioning everything that people tell you. The sad part here is that if I told you that said group is a front for the very same large companies from which it claims to be protecting small investors, you’d probably just ask if I had a point…

You can imagine my complete lack of surprise, then, upon reading a piece in the New York Times this week about the organization calling itself the Main Street Investors Coalition. Ostensibly formed to protect individual investors from the effects of activist groups putting pressure on large corporations in support of environmental, social, or financial reform causes, the Coalition claims to be in favor of profit maximization above all other motivations. They insist that the fact that this allows said large corporations to continue doing business in financially, socially, or environmentally irresponsible ways (just as they have always done) is merely a happy coincidence…

What they are failing to acknowledge is that the Main Street Investors Coalition is getting its financial backing from the National Association of Manufacturers – an industrial lobby group that includes executives from companies like Exxon Mobil, Goodyear, Dow Chemical, Cargill, Toyota and Pfizer. The main thrust of their argument is that as large investment groups like BlackRock and Vanguard are supporting causes on issues like climate change, gun control and employee diversity, they are not as focused on maximizing profits, which should be the primary concern of their customers. The Coalition has been lobbying the Federal government to increase regulation of what investment groups can put their clients’ money into, in order to limit their support for more activist firms at the expense of their members…

It probably also won’t surprise any of my readers (assuming I have readers) to learn that the Securities and Exchange Commission has opened an investigation into the Coalition’s activities, or that the Coalition leadership (and that of its supporting companies) are claiming to have done nothing wrong in the first place, either. But even if we ignore the absurdity of an industry organization pretending that legislation that shields its members from having to consider the wishes of their shareholders - who, let us remember, are the actual owners of a publicly-held company - the whole idea of restricting companies to the most profitable courses of action is asinine from a strategic position as well...

Sometimes the most profitable course of action in the short term is not the best option overall, and sometimes the actions that will profit the company directly will cause it greater indirect harm in terms of community relations, customer relations, vendor relations, health and longevity of its customers, or health of the environment in which it does business. The concept of considering the Triple Bottom Line when developing a strategy isn't exactly a new one. Moreover, it's difficult to imagine how not being able to use any strategy except "make the most money you can" would benefit anyone. Strategy is primarily about gaining a competitive advantage, and anything that interferes with that would be stupid even if it wasn't already just a ploy to protect organizations that don't want to bother about any of that pesky "political correctness" they keep hearing about...

Too Easy

I’ve made a few snarky comments in this space about Gwyenth Paltrow’s “lifestyle” brand company “GOOP” – it’s hard not to, actually. When you can find online ads for stickers that are purported to enhance some aspect of your health despite having the exact medicinal properties of postage stamps, it’s really hard not to wax sarcastic about any company that would attempt to sell such a product, or about consumers who would shell out money for that product. It gets even sillier when you can find other electronic snake-oil salespersons selling almost exactly the same products but offering entirely different explanations about how they supposedly work. But despite the commonly-held belief that the people behind the “GOOP” brand are delusional, it appears there may be an even simpler explanation…

An article this week on the AV Club site reports that not only does the company make no particular effort to check or support any of the health or wellness claims made about its products, it has actively avoided any efforts to let anyone else check them. The Goop magazine was originally going to be a collaboration with Conde Nast, but the kind of unsubstantiated question and answer babbling they wanted to print did not meet the Conde Nast print standards. Goop wound up producing their own “magazine” and forgoing the boost that they could have realized by working with an established publisher just because they didn’t want anyone else to fact-check their claims either…

Now, if the Goop enterprise was just an extended, online version of the Gwyenth Paltrow Fan Club, I don’t suppose anyone would have noticed, or cared if they did. There’s a tradition going back nearly a century at this point of celebrities of various types offering their fans “lifestyle” information about lives that they (the celebrities) may or may not actually live, along with pictures, newsletters, or whatever helps to increase their popularity. If Paltrow wanted to tell her fans that she wears bits of paper with adhesive backing stuck to her skin for the health benefits they supposedly offer, that wouldn’t have any more impact on anyone else’s health than, say, bizarre and otherworldly claims about living on absurdly tiny amounts of food money each month. Unfortunately, that isn’t the case…

I could go on for hundreds of additional words here – and in the past I have – about the ethics or morals of selling worthless, high-priced crap to people who should know better, or about how if making money off of the gullible, credulous, or stupid became illegal our economy would probably collapse. The problem is, at this point in American history, it’s just too easy to do that. Like it or not, we are living in a society where the President of the United States is going on national television and telling you that the things you are seeing and hearing aren’t real, and the nasty anti-intellectual streak in our society is getting out of hand…

The real take-away from this story, and the dozens of others like it that we’ve been seeing lately, is that just as A-list celebrities can afford personal trainers, wardrobe consultants, nutritionists, publicists, and agents, they can also afford to stick their heads in the sand and just ignore fact-checking activities that might mean actually having to think about the truth (or lack thereof) in what they are saying – but the rest of us can’t. We’ve reached the point where you can either do your own due diligence, check all of the things people tell you are facts, or accept the risks involved with spending hundreds of dollars on “health stickers” and looking like an idiot…

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…

Get Out the List

I can’t really say that finding yet another situation in which American business interests have been running amok during this administration really came as a shock to me, although I have to admit that this one is even more despicable than usual. We’ve already seen companies getting the government to let them start dumping mine tailings (poison) into rivers and lakes, pushing to repeal even common-sense regulations on air pollution, trying to gain increasing support for failing industries like coal mining (which even our former coal customers don’t want anymore), and advocating for additional import tariffs that are now threatening several previously solid manufacturing sectors. But allowing the US-led infant formula lobby to interfere with U.N. World Health Assembly’s efforts to promote breast feeding is still a new low…

You can pick up the New York Times article here, if you really want to see things hit their worst, but don’t say I didn’t warn you. All the assembly was trying to do was pass a resolution saying that “mother’s milk is healthiest for children and countries should strive to limit the inaccurate or misleading marketing of breast milk substitutes.” This isn’t exactly a controversial statement; there are quite literally decades of evidence, from hundreds of studies, which support this position. On the other hand, it’s easy to see how the $70 billion formula industry, led by Abbot Labs here in the US, would consider such a resolution to be against their interests…

It’s hard to imagine how, exactly, the industry leadership would justify promoting their business interests over the health and welfare of millions of infants, and the HHS statement that this move was to prevent “stigmatizing” women who want/need to use formula isn’t particularly convincing. It’s even less convincing when you consider that American representatives at this same Assembly meeting were also threatening to withdraw international aide and military support from various small nations if they chose to support the resolution – starting with Ecuador, which was originally going to propose it. American delegates apparently also threatened to slash US funding for the World Health Organization…

Now, I wouldn’t want you to place all of the blame for the United States delegation behaving more like organized criminals than advocates for public health on the shoulders of a single, albeit gigantic, industry. During these same meetings, the Americans were also noted as advocating to limit the ability of countries with rising rates of obesity and diabetes to put warnings labels on sugary beverages, and opposing changes to patent laws that would make it easier for poor countries to gain access to potentially life-saving medications. It might be possible to argue that intellectual property rights and free trade without regulatory interference are good for business in every country, and therefore these other efforts are still slightly into the grey area, but those claims don’t hold up well when accompanied by threats of extortion…

There are times when it really does seem as though the people who are running this place have a checklist of completely disgusting things they want to accomplish, just to make sure that they don’t miss anything. I feel constrained to point out, however, that even if these mainly political moves made sense in a purely business-friendly context – and they really don’t – the degree of international resentment this kind of behavior is generating has potential long-term consequences that dwarf whatever immediate gratification these companies may be receiving. When things get to the point where the Russians have to step in and propose the resolution in support of breast-feeding because the Americans have been threatening everybody else you really know that the regular order of things has been upended…

In the simplest possible terms, we’re still going to have to live on this planet, and do business here, once the current administration finishes lining their own pockets and leaves office. That’s going to be really difficult to do if all of the residual goodwill we might still have had with the rest of the world gets flushed in order to sell more infant formual…

Back to Basics

Back in 2013 I brought you the story about United Airlines reconfiguring its CRJ regional aircraft to include more – but lighter and smaller – seats. At the time, I commented that travel on a CRJ is already a miserably cramped experience, and I couldn’t imagine that trying to cram more people on to one was going to help. Since then, all of the airlines have been experimenting with new seating arrangements and equipment, ranging from things that look like a saddle to a kind of standing-room-only system that provides just enough support to keep the FAA from shutting it down. It’s enough to make you wonder if anyone running an airline is even thinking about passenger comfort anymore…

Well, apparently they aren’t. Some recent interviews with the leadership at United and arch-rival American Airlines reveal that they have been working on smaller and lighter seats, and planning to fit extra rows – and possibly even an extra seat per row – onto every type of airliner currently in service. This will enable the airlines to increase their revenue per flight considerably, as I noted in the 2013 post, but it completely ignores passenger comfort and potentially safety (in the case where you’re trying to get more people off of a more cramped airplane during an emergency). Push-back from some consumer advocate groups has helped prevent the worst of these plans from going through, although we should note that the public relations and customer service staff at some of the major carriers have also complained about the concept…

Now, as I noted five years ago, the management team of any company has a responsibility to its shareholders, and to a lesser extent, all of the other stakeholders, to maximize revenue. In the case of airlines, getting more paying customers aboard every airplane is one of the only ways to do that, but the problem with doing so is that you are also making the experience less and less enjoyable, which lowers the value you are providing to the customer. Carry this process too far and you will reduce the perceived value of the service you are providing to the point where no one will be willing to buy it…

This is a perennial problem for any company utilizing a low-cost strategy. If a given product’s perceived value drops below a certain level no one is going to purchase the product, no matter how cheap it becomes. The example I use in class is the 1980s-era imported car known as a Yugo, which cost about one-quarter of most basic cars, but was so poorly regarded that no one wanted one. If you care, I can name any number of other companies that have failed for the same reason, but given that there are only three kinds of business strategy (cost leadership, differentiation, and focus), and every business school in the world teaches its graduates to watch out for a lack of parity of quality when using the cost leadership strategy, it’s hard to understand how anybody could get to be CEO of a major airline without learning this lesson…

Even worse, in some ways, it the fact that several of the same senior managers have openly admitted that the only thing driving their decisions is how much additional revenue they can create, regardless of passenger comfort, and the only thing that has prevented some of the bone-headed ideas from going into service was that the personnel who have to care for the passengers (and deal with customer complaints) kicked up a fuss. It’s enough to make you wonder if any of these CEOs were paying attention in Strategy and Policy class…

Wagging the Elephant

Some time ago in this space I brought you the story about how many “foreign” cars were now being built in the United States, like the Toyotas being built in Ohio, and how many supposedly domestic cars were being built from parts not made in this country. An investigation team had taken all of the parts from that model year’s Ford Mustang and Toyota Camry and sourced all of the parts, only to discover that while both cars were assembled within 500 miles of where I’m sitting right now, the supposedly foreign Camry had more American-made parts than the All-American Mustang. I wish I could tell you that it comes as a surprise that no one in Washington seems to have read either the original article or my commentary on it, but I’d be lying…

An article on the CNN Money page this week reports that the proposed (or threatened) steel and aluminum tariffs are projected to drive the cost of the Camry up by about $1,800 dollars for the next model year, and possibly more thereafter, depending on how the trade wars develop. There hasn’t been any word yet on how much the cost of a Ford Mustang will go up, but since these (and several other Ford products) use even more foreign metals and parts, it seems likely that the Mustang will be hit at least as hard. Toyota hasn’t said how much of the price increase they intend to pass along to the consumer via a higher sticker price, but unless they want to eat the entire increase out of their profits they are going to have to pass at least some of it on…

It’s hard to say what the overall effect will be on the US economy, let alone the world’s economy, but the impact on anyone in this country who wants to buy a Toyota Camry is certainly clear: they will have to scrape up another $1,800 plus whatever it costs to finance the increase. If a similar increase hits all of the other companies that manufacture and sell cars in this country, including Ford, GM, Chrysler, Hyundai, Honda, Mercedes, BMW, and others, it’s going to make it much harder for ordinary Americans to buy a car, and I can’t imagine that’s going to be good for the workers who build the cars, either. And that doesn’t even consider the effect that having all of those companies losing sales, all of their suppliers losing sales, and all of their employees having less to spend on consumer goods is going to have…

In theory, if this situation was protecting a similar number of workers and consumers it might be worth considering such an action. But with metals production in the United States continuing to drop, it isn’t clear if the developing trade war is going to save any jobs, let alone enough to replace all of the ones potentially at risk if the automotive industry in this country is thrown into a crisis. And I have to point out that cars are only one of the more obvious products that are made out of steel and aluminum in the US; if a similar effect were to cascade across all of the other sectors of consumer goods, the overall effect could make the 2008 economic crisis look like a minor inconvenience…

In politics, the expression “Wag the Dog” is used to mean a stunt intended to divert attention away from an unpopular action, but the term derives from the old saying about “the tail is wagging the dog,” which is more about a minor part of something taking on more importance than the whole. I would say that in this case both expressions apply; the health of one American industrial sector that has been in decline for decades is being given priority over dozens of other sectors, and goodness knows what this fiasco is supposed to keep us from noticing. Except that, when things get to this scale, it’s really more a matter of the tail wagging the elephant…

Down Four Lanes of Highway

I think we were all expecting to see some of the companies impacted by the developing trade war start moving production outside of the US. Whether or not the new tariffs on steel and aluminum will actually help the U.S. companies that produce those materials remains in dispute, but the retaliation coming from the EU, Canada and China does not – and those counter-punches are going to hurt. For example, Harley-Davidson is facing an estimated increase of $2,200 per unit it exports to Europe – which is an increase from 6% to 31% if that helps. Company and industry sources both claim that Harley-Davidson was already considering moving more production off shore, but this gave the idea greater appeal. It’s a predictable response to a difficult situation. Unless you’re the President of the United States, apparently…

Both the BBC and CNBC are reporting on the move, and both of them are citing a tweet from our President saying that he is surprised and disappointed that Harley-Davidson is “surrendering” instead of waiting for the supposed benefits of this trade war to help make up the difference. How, exactly, a trade policy that protects US steel and aluminum manufacturers from foreign competition will help a company that makes motorcycles is a little tenuous. Granted, American metals companies could lower their own prices if they had less “unfair” foreign competition, but in general, companies lower their prices as a result of greater competition, not less of it. And even if our domestic producers were somehow inclined to lower their costs, there is no reason to believe that they will – or that it would be enough to offset the tariffs being placed on motorcycles by the EU and other to follow…

A much bigger question, at least from where I’m sitting, is why anybody would find either of these developments surprising in the first place. Random, arbitrary, and inexplicably high tariffs are going to provoke retaliation, just like any other hostile action. Make them high enough, arbitrary enough, and combine them with enough ignorant and belligerent rhetoric, and people are likely to see such measures as economic warfare – because that’s exactly what it is. And while I will concede that there are some conditions under which tariffs (and other sanctions) are justifiable, or even sensible – a trade war is still a better idea than an actual war, in almost every possible case – suddenly declaring a trade war on countries that have been your stable trading partners for decades makes about as much sense as attacking them without warning any other way…

I realize that this post is drifting away from business and towards politics, which I would prefer the blog not do, but by the same token this is very much a matter of strategy, and in this case, applying the wrong ones. As a matter of international business or economics this move makes no strategic sense for anybody except a handful of American metals companies, and we should note that if there is an economic crisis because of this trade war their business will not prosper either. The only category under which this qualifies as an actual strategy is in the case of appealing to a reactionary political base, or rewarding owners of newly-protected companies who happen to be current or potential campaign contributors. Which is really the point…

To put it simply, I don’t comment (much) on politics because having business interests attempt to direct national policy is a colossally bad idea – and that is what is happening here. I do not have any evidence that would prove that members of our current administration are allowing their own business interests, or those of their political supporters, to direct our national policy towards a potentially disastrous trade that can’t possibly do anyone on either side any good, and may ultimately be bad even for the handful of companies supposedly being protected under such a policy. I just can’t fathom any other explanation…

This won’t end well. It never does…

Are You Kidding Me?

Back in 2015 I brought you the story of what came out after the Ashley Madison data breach – a relatively small event, compared with the outrages at Target or Equifax, to take only two examples. What was really amazing about the Ashley Madison story wasn’t the data breach itself, but rather the revelation that nearly all of the active accounts on the site were owned by men, and many of the allegedly “female” members were members of the Ashley Madison staff, ‘bots being used to simulate active accounts, scammers pretending to be women, or (in a few cases) all of the above. At the time, I remarked that this was the perfect crime, in the sense that the men who had been effectively defrauded by the site would be extremely unlikely to complain to the authorities, since that would involve admitting to looking for an extramarital affair (if not actually having one)…

I doubted this would be the end of the company, or the story, however. The “Post-Truth” era was, mercifully, still years in the future, but it was already hard to imagine that anyone who was really desperate enough for illicit sex to risk offering their credit card information to an online company for that purpose would be deterred by the fact that somewhere between 70% and 95% of the “women” on the site didn’t really exist. While the data breach might scare off some of the saner or less desperate prospects, thus interfering with future sales, the company’s losses in the affair were only a $1.6 million fine and possibly the loss of a handful of men whose partners genuinely didn’t realize they were looking for something on the side. That would, however, still level tens of millions, if not hundreds of millions, of sleazy men who are bad at math thinking that despite the 35-to-one odds of actually finding a real women on Ashley Madison, they might be the one to get lucky…

This week brought a new wrinkle in the case, however. The USA Today site published a story about a report issued by Ashley Madison, listing the cities in which the largest number of new accounts have been started over the last year. The first thing that caught my eye was the lack of raw data; there are twenty cities listed in the linked article, but no indication of what size the client base in each of them might be. Does this mean that Dallas has 10,000 more cheaters than Chicago, or only 10? Or are there really only a dozen or so active accounts in each one, and is the company trying to convince people in those cities that someone will/might actually be available to sleep with them if they sign up? But then it gets worse…

The article goes on to say that Ashley Madison now has over 54 million accounts, up from the 36 million or so they had three years ago, and that the accounting firm of Ernst & Young now reviews their accounts list to verify that all of the accounts are for real. This isn’t impossible, of course; E&Y does perform that kind of audit, and some of their customers do have account lists of that size or even larger. The problem here is, even if they can verify that the accounts are active, how can they verify the existence of 54 million distinct customers – or, indeed, any particular number of customers – without completely violating the privacy of all of those people? And, one assumes, whatever confidentiality agreement Ashley Madison has with its customers…

More to the point, perhaps, how does any auditor, no matter how discrete, manage to determine how many people are actually using their Ashley Madison accounts, even if those people really do exist and are actually paying for their accounts? Assuming, of course, that anyone out there is going to believe a word the company says after the revelations of 2015. It would be nice to believe that there aren’t 54 million people out there who are capable of affording the cost of their Ashley Madison accounts and computer-literate enough to sign up for one who are also gullible enough to believe that this time the company is telling the whole truth – in effect, that the company is once again lying through its teeth…

But then I look at some of the other things that people in this country have been claiming to believe this week, and I have to wonder…

Protection or Aggression?

There has been a lot of ink lately about the tariffs that our current administration is trying to impose on imports of steel, aluminum, and various other commodities that impact the personal wealth of people who donated to their election campaigns. Measures like this are generally referred to as Trade Protectionism, and are generally enacted to protect domestic producers from unfair foreign competition – cases where a foreign company can use cheaper labor, lower raw material costs, looser environmental regulations, or subsidies from their national government to achieve a price level American firms can’t match. In theory, import tariffs protect domestic companies and their employees, but in practice there are a number of issues with such measures that make their use risky, or even counterproductive…

The obvious problem with import tariffs is that other companies can impose them, too. In cases where we need the imports more than they need our exports, their tariffs can be more effective than ours, and the overall effect on our economy will wipe out whatever advantages our import tariffs might have given the “protected” industries. That’s not easy to determine in advance, either. In the case of the oil wars in the 1970s and 1980s, for example, many people assumed that the US could retaliate for the (seemingly) arbitrary price increases for petroleum with similarly punitive raises in the price of food products. Unfortunately, it turned out that we did need oil as much as the OPEC countries needed food – given that we were using petroleum-based fertilizers, petroleum-fueled farm equipment and delivery trucks, and oil-burning ships to export the crops in the first place…

In the current iteration of trade tariffs, it is harder than usual to see these measures as anything other than political, due as much to the fact that there have been no major changes in those industries or pricing structures in recent years as to the countries being targeted by the tariffs. There have been occasional cases of Chinese and Russian companies dumping cheap steel imports on the US market over the last decade, but our domestic steel industry has been declining for much longer than that, and even if those imports were a factor it’s hard to see how erecting tariffs against Canada or any of the other G7 countries would help. Even if those countries weren’t going to retaliate for our random imposition of tariffs, and they’re already doing so, there would still be negative effects within the US to explain away…

Consider, if you will, the case reported in March of this year by Reuters, about the impact of the steel tariff on a company called Novolipetsk Steel PAO, in Mercer County, Pennsylvania. Novolipetsk Steel imports large amounts of bulk steel from the company’s mills in Russia, which it then rolls and processes in plants in the US. The steel tariffs are expected to have a positive effect in the vestigial American steel industry, with a few idle steel mills being put back into operation, but it will have a much larger negative impact on companies like Novolipetsk’s US subsidiaries, wiping out as many as three times the number of jobs created. And that doesn’t even consider the jobs that will be lost in the American industries that actually still export goods…

It would be nice to think that these tariffs were really intended to protect American workers in general, or even that the effects would be a net positive for the country. As noted above, trade protectionism is generally not a viable long-term strategy, but if applied carefully and limited to cases where unfair competition (low-cost product dumping, for example) really is occurring, it can have some positive effects. In most cases, however, actual trade negotiations between countries involved will be more effective and generally more mutually beneficial. In cases where there are no such trade wars in effect, where the country attempting to erect the tariffs can’t begin to supply its own needs for the relevant commodity regardless of import price, or where the administration in power owes significant favors to people who own companies in the relevant industry, however, it’s difficult to see these actions as protecting anything in the public interest…

Not Even Trying Anymore

When I realized that I wasn’t even freaking out about the most recent crony capitalism scheme from the current administration I’ll admit I was a bit disturbed. Generally, when government leaders implement a scheme that will harm the people they nominally govern, the country where those people live, or the world in general they will make some effort to explain or rationalize the move; when the scheme enriches their political supporters at the expense of everyone else in the affected industries they will go to much greater lengths to bury their tracks in order to avoid a very real risk of lawsuits. But in the case of the Federal intervention to keep obsolete coal, oil, and nuclear power plants operating for at least another two years which was announced on Friday, the administration doesn’t even seem to be trying to hide the corruption…

If you have an unusually strong stomach you can pick up the ABC News story about this action, but don’t say I didn’t warn you. As announced, the initiative will keep these elements of our national power grid active, regardless of local need or cost-effectiveness, as a matter of National Security. Why, exactly, power generation units that can’t be operated at a profit are critical to the security of the United States isn’t explained in the memo that turned up on Friday. The Department of Energy merely claims that nuclear, coal, and oil-fired power plants are a “critical” part of the national grid, and without them we might be vulnerable to… Well, to something; they didn’t specify what. You’d have to be a real cynic to suggest that this action is being taken solely to curry support from the people who own obsolescent power plants and coal mines – and the people who work in those industries, of course…

Regrettably, the people at ABC News are apparently that cynical, as are industry watchdog groups, government accountability groups, environmentalist groups, and the Energy Information Administration, all of whom have criticized the announcement as nothing more than a political move intended to make good on a campaign promise from the last Presidential election. The truth is that use of coal for electrical generation has been dropping every year for over a decade, decreasing by over 20% in just the last year, and it would be redundant to specify the costs of using oil for power, or the environmental consequences of nuclear power and nuclear waste. Requiring companies to keep those plants open, and (effectively) requiring utility companies to keep purchasing the output from those plants, will result in higher costs to consumers and benefit no one except the coal companies and whoever owns the obsolete power plants…

What makes this particular story so remarkably nauseating is that no one in the Administration has denied any of this, or offered any support for the contention that maintaining these facilities has some strategic or defense purpose. It’s not exactly surprising, given the other abuses of power for personal enrichment that we have seen from this Administration, or given the fact that our current Secretary of Energy does not believe that we need a Department of Energy, or given the fact that our current head of the EPA is openly an industry flak who (apparently) believes that air and water pollution are good for you. It’s just exceptionally brazen, even for American politics, and exceptionally lazy for anyone in this 21^st Century…

I normally stay away from political issues in this blog because, as previously noted, it’s not my area of expertise and I feel there are already more than enough blogs offering political opinions written by someone without any particular qualifications. I’ve also stated for the record that I believe that cronyism, corruption, and pork-barrel politics are an unavoidable part of any representative democracy, and as long as we can keep them down to no more than a slightly regrettable level we will still be doing far better than any other system of government enacted to date. But when the party that is nominally in favor of small government, free-market capitalism, and responsible fiscal policy starts doing things this blatantly self-serving I think we are all justified in complaining about the incompetence, if not the actual policy. Face it, folks, these people aren’t even trying anymore…

Too Complicated For Me

If you were to ask anyone who studies human behavior – which is all Management scholars really do, when you get down to cases – they will tell you that human motivations are one of the hardest things to definitively identify. You can ask people why they did something, and it is possible that you might an honest answer, but once you start allowing for confirmation bias, self-deception, rationalization, different interpretations of behavioral and cultural standards, and sheer pigheaded stubbornness, just to name a few, it’s not always clear if the people in question even know why they did things. The question of whether humans are rational or rationalizing goes back at least three centuries, and probably for as long as people have been people, and that doesn’t even consider ignorance, bigotry, or outright stupidity…

Take, for example, the actions of a non-profit group calling itself The American Bible Society (hereinafter ABS). The organization has been in operation since 1816, fulfilling the mission of translating the Bible into various languages and distributing copies around the world, so that people who don’t speak English, Latin, or Aramaic can read the Christian scripture for themselves. The ABS has had a core values statement stressing generally laudable principles like integrity which it has asked employees to sign for some years, but the statement wasn’t specifically Christian and failing to sign it wasn’t a termination offense. All of that appears to have changed this year, however…

According to the Philadelphia Inquirer’s website, the ABS has a new policy that they call the “Affirmation of Biblical Community” that, among other things, forbids pre-marital and extra-marital sex, and defines marriage as being limited to one man and one woman. The organization is requiring all of its personnel to sign the new policy statement, and presumably abide by its provisions, or resign from the ABS by the end of calendar 2018. This would effectively prohibit anyone who lives with a partner to whom they are not married, and anyone in a same-sex marriage, from working for the ABS. Whether it would also cause any such people to become alienated from the organization, consider its leadership to be a bunch of small-minded homophobic bigots, or prevent the ABS from operating as effectively is yet to be determined, but according to the Inquirer a number of core personnel have already resigned their posts…

Whether or not this will bring the ABS into conflict with any Federal or state anti-discrimination laws remains to be seen, although it is worth noting that Philadelphia itself has a law that forbids discrimination on the basis of race, religion, or sexual orientation. There are exceptions in the law for non-profits and religious groups, and the ABS might be able to argue in court that they need such a requirement for reasons that escape me at the moment. What I find even more bizarre and inexplicable is what the leadership of the group thinks that such a prohibition – and the resulting alienation, distain, and anger – will do to improve their operations or help them to accomplish their mission…

The president and CEO of the group is quoted in the Inquirer story as saying that this new policy will bring “unity and clarity” to the ABS because it will ensure that their staff has a “deep and personal connection to the Bible.” I’m not sure why they believe that such a connection is necessary in order to translate text into different languages or handle the logistics of getting hard copies of the documents to people around the world who (presumably) want to read them; I’m also not clear on why they think traits like intolerance and bigotry are appropriate to a (supposedly) Christian religious mission. But even if there is any merit in those positions, I still believe that the ABS leadership has their priorities backwards…

As I have noted in posts about for-profit companies with mandatory religious requirements, it might be pleasant for the ABS personnel to work surrounded by other Christian zealots; it might also prevent anyone who works there from questioning the bigotry and intolerance being perpetuated by their leadership. But the purpose of this agency isn’t to reinforce the beliefs of existing Christian zealots or contribute to their upkeep; it is to bring the scripture as they see it to people who do not currently have access to the texts and may not even be Christians at this time. I have to ask, once again, if it wouldn’t make more sense to do good works for people and tell anyone who asks that “I do these things for you because my faith demands it” than to imply than anyone who isn’t an intolerant religious bigot is unwelcome in your ministry?

I’ve spent most of my life watching people, and most of the last three decades studying them, but I still find this sort of behavior baffling in anyone, let alone adherents of a faith that teaches acceptance, love, and universal equality as children of the same creator. Maybe this contradiction makes sense to someone, somewhere, but despite my best efforts it’s still too complicated for me…

Beastly Decisions

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

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

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

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

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