Wednesday, December 21, 2011

Why Big Corporations Are Failing - 2

I grew up in a small city of 65,000 people.  It was a city where almost every store was owned locally.  The first franchise restaurant did not show up until I was a teenager (“Sandy’s”, a 15-cent precooked hamburger chain long disappeared).  Many of the places we shopped were also clients of my father’s CPA firm.  The drugstore a few blocks away was where I could go on my own to get a fudgcicle, or buy a gift for a family member – on credit, even as an eight year old, because I personally knew the druggist/owner.  If one ever had a service or merchandise problem with any store, you could always talk directly to the owner or an employee able to resolve it with you directly.  It may sound like I am describing a foreign planet, or a fictional episode from “The Waltons” TV show.  But it was part of my real life.

Fast forward to 2011.  In my rural county in western North Carolina, there are two Subways and one Hardees, two branches of a regional chain grocery store, and one Dollar Store.  That is it for any non-local establishments in the entire county.  But when I go out of the county as I am required to do for my quantitative or specialized shopping, it is a world filled with franchises, chains, and mega-/”big box” stores.  The “local store manager” is rarely to be seen.  And if you do track him/her down and speak to them, they would regularly tell you “there is nothing I can do” about your problem.  Corporate policy, or even the computer programming in the cash register, dictates all.  Numerous franchise owners, in fact, are financial investors, rarely setting foot in the actual stores to provide the service.  Many store managers do not really manage; they simply execute instructions sent by some distant authority.

But that is only when you can actually walk into a real store.  More and more of the products we receive come from non-storefronts – real or quasi-utilities (utility providers, cable companies) or “online stores.”  For most of these, there is no interaction at all; we just pay the monthly bill or click on visual images of the actual products we want.  When real service is required, the only option is by phone or perhaps email.  The voice/writer may be able to walk you through a preset process, but rarely is actually able to truly change your situation.  It is a disempowered voice which all too often many companies put into place to prevent you from talking to someone with actual authority to alter “corporate policy.”  They may be given any number of official sounding job titles, but these titles are a corporate scheme designed to further the image of these service representatives, not to give them any real authority.

Each of us can easily recite a litany of bad, frustrating, unproductive customer service experiences we have had.  Sometimes it may be that, for whatever reason, someone is simply being an unhelpful jerk.  But most often it is a structural problem that is choking big corporate America.  As a result of franchising, corporate mergers and reorganizations, and an over-emphasis on stock prices and executive compensation instead of “product” (see previous blog), the disconnect between consumers and corporate owners/executives continues to grow wider.  And the promise of “improved connection and communication via the internet” is not helping; it is in fact a growing inhibitor to communication masquerading as “friending on Facebook.”

I cannot begin to fathom how many layers of people and offices (or subsidiary companies) exist between me and the CEOs of the companies that I buy from.  Have you ever tried to look up the name and mailing address of one of those CEOs?  Good luck.  The answer is typically so buried, so obscure that the walls of secrecy surrounding that individual are designed to keep me away from that person, not to facilitate conversation between us.

So I have an American provider of satellite internet services who outsourced their help desk to representatives in India with whom you cannot have a human conversation.  This company has tied those well-meaning people to a preset rigid script they must follow in exact sequence in all circumstances regardless of my individual needs or situation.  The result was a phone call to change my billing address that took 30 minutes to complete instead of the 5 minutes it should have required.  (I am in the process of changing my internet provider.)  I once ordered a Dell computer advertised as “totally customized and built to my specific needs.”  Except they did not tell me until the end of the ordering process it would take 4 weeks to deliver it.  Nor did they give me a head’s up advance notice when they back-ordered it for an additional 4-6 week delay.  (I cancelled the order and bought something else.)  There is the finance company with whom I am currently negotiating a mortgage refinance, or the health insurance company picking and choosing what costs are covered or not.  Both of these companies are set up to prevent me from talking directly to the actual decision-makers; instead I talk to (mostly) friendly-sounding go-betweens unable to operate outside of their tightly constricted box or make any decision.  Or I talk to computer programmers to get a billing problem resolved, because the billing system has gotten beyond the ability of business office human beings to interpret or manage it.  I repeat my story to six different people because the corporation has grown so large that the individual parts cannot communicate or work together anymore.

These are just tip-of-the-iceberg examples of my experiences.  Any reader can easily provide a litany of their own experiences.  But the point of this discussion is not the individual occurrences; it is the near-universal number of people with negative experiences from an increasing number of transactions in our lives.  It is the increasing level of effort required to fix service problems when things go wrong, or (heaven forbid) we want a product or service outside the same, narrowly defined options offered by each vendor.  It is the growing disconnect we feel between us and the people who are supposed to service us.  Ultimately, it is disconnection, whether towards corporate or government or other institutions, that fuels the anger that drives people into Tea Parties or tents on Wall Street.

After the “product” issues discussed in my last blog, “standard model / fixed process / customer non-service” is the second key failing of big corporate America.  Fortunately, there are still some corporations who get this, manage to avoid this failure (continued thanks, L. L. Bean!), and who see the profitable opportunity of truly good customer service and then operate accordingly.  They successfully exploit the gap between the usual promise and actual reality of corporate responsiveness.  We need to find those corporations and support them with our trade and dollars.  Or wherever possible, seek out our few local businesses, talk to the real people who work there, and support the very difficult endeavor they are making.  Most of them understand that it is not about focusing on tax breaks and stock prices.  It is still all about product and service, not gimmicks.