The Customer Is Always Right – Why Growth Isn’t Always Good And How The Man At The Top Always Wins

 

Not All Germans Are Sensible, But They Do Tend To Wear Ties

Not All Germans Are Sensible, But They Do All Tend To Wear Ties

The world wide recession bites ever deeper. As it does, the phrase “treat every customer as if they were your only customer” is more pertinent than ever. Good customer service has a tendency to flourish during harsh economic times. People simply have less money to spend, or are less willing to spend the money they do have, so every sale becomes harder and harder to win as time goes on.

There is another thing which also flourishes in times of economic woe. Bad management practice. The people at the very top of companies always use recessions as an excuse to expand and gain market share. If you are at the top of the corporate food chain, it’s happy days when a recession is officially announced. If you’re a CEO, it’s the ideal opportunity to make drastic cuts and siphon off the money into the shareholders’ trough. You freeze wages and stop recruiting. Cuts, cuts, cuts is the name of the game on an operational basis. Gorge yourself on the cash until even your banker in the Cayman Islands starts to laugh a little nervously. Then use the remaining money to expand your business on its new shonky “streamlined model”  because “we are fighting for our lives and expansion is the only way to survive”.

This is the rhetoric that fuelled the bubble that burst in 2008 in the first place. Entire economies, including Britain’s, fell for this lie. Growth is everything, even if you have to borrow beyond your means to achieve it. Only one country didn’t fall for the scam. Only one country said “Growth, yes. But sustainable growth that we can afford.” It nurtured its economy like a careful gardener while everyone else was trying to grow massive stalks out of magic beans. That country was Germany, and if they had fallen for the expansionism lie, the whole of Europe would be back to the barter system and invading each other every other weekend.

 

Dammit! Orwell Put It Better Than Me AGAIN.

So, for clever company directors, the announcement of a stock market crash is, to paraphrase George Orwell, like the rattling of a stick in a swill bucket. Sadly, for the rest of us, it means pay cuts and lack of job security. Plenty of people out there on the dole, right? No need to treat your staff well. If they don’t like their jobs, they can always leave and you can just hire someone more willing to toe the line. Or better still, don’t hire anyone at all and get everyone else to cover their work. This is the sort of classic schoolboy error that used to make Sir John Harvey-Jones tear his hair out when he tried to fix failing companies in his TV series “The Troubleshooter”.

The problem is that the people who leave usually do so because they have another job to go to. And in this economic climate, the people who can secure that other job tend to be the good people. As a company, it has cost you thousands of pounds to train these people. It will also take months –or years- to train their replacements, and cost thousands more pounds into the bargain. If you don’t replace them –which is more likely- then all the other good people who are then burdened with their work are more likely to start looking for other jobs too. Long term, it really is a false economy.

If you are one of the people who are left behind after people have jumped ship, initially you will be told that all the cuts are short term and to hang on in there until things get better. When it becomes obvious to even the slowest on the uptake that things are not going to get better, your company will change tack. It will start to bring up your “over staffing problem” and introduce new ways of measuring your productivity. Actually, they will be new ways of defining your productivity, a practice commonly known as “moving the goalposts”. If you are really unlucky, these new measures will be codified into an actual system. As a rule, these systems are generally called “Intelligent Something Something”. Note how the name employs the linguistic “rule of three” to convince you that it might be a good idea.

The thing that all of these “Intelligent Something Something” systems have in common is that they will all be the dumbest  thing you have ever heard of in your life. The other thing they will all also have in common is that they will all have been devised by someone who has no experience whatsoever at the sharp end of whatever you do for a living. Or what experience they have had was so long ago that they have allowed the fog of memory to obscure the reality of what things were actually like. Either that or they know exactly what things are really like but have been paid enough money not to care.

It’s easy for them to move the goalposts. All they do is conduct a detailed time and motion study on a much smaller operation and then simply scale the results up with no regard for the economic fact that is Diseconomies of Scale. Your place of work then becomes sort of like one of the giant ants from the 1950s B-movie “Them!”. Tragically for you, giant ants cannot exist without collapsing under their own weight.

The phrase “Treat every customer as if they were your only customer” is a valid one. Given my personal experience as a manager, I would also add “Treat every employee as if they are your only employee.” Now, don’t misinterpret that as some touchy-feely liberal sentiment. It’s a double edged sword. If your only employee was an absolute godsend, you would do everything in you power to keep them happy in their work. Equally, if your only employee was a shiftless waster, you would fire them. Most companies do not follow this principle. As I’ve already said, they stop recruiting and allow their wages bill to shrink do to “natural wastage”. That is to say, all the good people getting pissed off and getting other jobs, leaving a core of overworked good employees and a load of wasters who don’t deserve gainful employment in the first place. They call this “rightsizing the workforce”, and see not a speck of irony that it is all done in the name of expansion.

Expansionism is a tricky tightrope to walk, and it must be walked perfectly to get the desired results. It only ever results in one of two outcomes : absolute triumph or complete and utter failure. The Germans had a couple of brushes with expansionism in the early part of the Twentieth Century and it didn’t work out too well for them. Perhaps that’s why they did what they did with their economy while the rest of Europe was having the financial equivalent of a massive piss up.

Growth isn’t entirely bad. Without it, the computer I’m currently typing on probably wouldn’t have been invented yet. But growth out of control, that’s called a tumour. These are generally regarded as being bad. Let’s just hope this tumour doesn’t kill the company that’s currently putting bread on your table. Don’t rely on the people at the top to care that much whether or not it goes belly up. Selling of bits of its carcass to the highest bidder is really good for the shareholders. Everyone makes a ton of cash. Everyone except you that is.

© Copyright Michael Grimes 2013

Advertisements

Tags: , , , , , , , , , , , , , , , , , , , , , ,

About thedailygrime

At that awkward age - too young to be a grumpy old man, but just acerbic and downtrodden enough to have an opinion. Read it here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: