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A safe bet

Published on February 24, 2017

So ASLEF’s members have rejected the proposal agreed by their representatives and the prospect of peace on Southern Railway has receded beyond the end of Brighton Pier once again. The result is that a significant slice of our economy is beset with uncertainty. And the struggle not only to make ends meet but simply to meet endures for hundreds of thousands.

I wonder if it’s right for such damage to be caused by so few over so little? When the bankers created significant mayhem in order to preserve so much for an enchanted few, the concept of moral hazard was brought forth – those that did wrong should take responsibility and face the consequences. Striking is, prima facie, a wrong, a breach of contract. It is a specific law which exempts Trades Unions from the effects of a strike and I wonder if it, as well as the transport that some of them operate, is due for an overhaul?

The essence of Trades Unions is to protect workers, to ensure that they are not exploited and, in that mission, they have done a good job. When it comes to protecting jobs and raising wages then their success is dependent on their ability to cause disruption which is only possible in industries where there are very few suppliers. Nowadays the only areas this happens are Government services (NHS, emergency services) and transport. In this situation it’s hard to see why you wouldn’t strike. You forego a day’s pay and get an increase in either pay or conditions, or both. Train drivers are not on the breadline and if you know that an extra day’s holiday produces a permanent increase in your income you are highly likely to do that. Even if every day off requires a 0.5% rise to be recovered in one year (of say 200 working days), if your remaining working life is say 20 years you can take 20 days off and be no worse off with such a rise. So long as you have a legitimate trade dispute the only issue is how long you can survive without income. I’m not saying that the right to strike, which has been recognised as a fundamental human right, should be removed. I am suggesting that it should be used when there is evidence of exploitation.

In less monopolistic sectors there is some evidence: some employers who hold the whip hand have maximised their power with zero hours’ contracts. Isn’t this the area that Trades Unions should be focussing on? Simply banning these contracts isn’t that straightforward because it would affect freelancers, and others who choose to work flexibly (including FDs!). But denying unemployment benefit to someone who has left a zero hours contract is just the sort of exploitation that could be stopped, perhaps by showing that earnings from the contract have been less than, say, £1,000 in the last month (as can now instantly be verified from the HMRC on-line PAYE system?).

I’ve held back from writing this blog because the criticism that as an employer “I would say that wouldn’t I” is inescapable. But it doesn’t render what I’ve said untrue. If there are good reasons to continue with the current universal immunity from the consequences of asking for more and more (under the highly specious pretence that it’s about safety when the doctrine of vicarious liability means that it is always the employer not the employee that is liable for someone who fails to mind the doors) then please let me know.

Every job faces change, and sometimes redundancy, as a result of technology. Even accountants, chartered, certified and turf have been affected. It’s why we, collectively, are materially better off. Are safety and technology legitimate grounds for withholding labour or is this too much of a safe bet?

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Feeling objective – the true leadership test

Published on February 9, 2017

I guess now is as good a time as any to admit to a teenage crush on Harriet Walter. In the ‘70s, as Harriet Vane, the collaborator and then wife of amateur sleuth Lord Peter Wimsey, her diligence and care in their common cause of justice only enhanced the appeal of her cut glass accent and come hither eyes. But her role as the new Mother Superior in Nonatus House, the HQ of Call the Midwife, ended my unrequited yearnings. The perspicacity and collaborative spirit of Miss Vane have been superseded by cold ruthless efficiency in the name of the Order.

I’m not privy to the editorial meetings of Call the Midwife, but it occurred to me that the choice of storyline might be an attempt by the BBC to capture that part of the zeitgeist that is the crisis in the NHS (2016/17 vintage) – the need to be efficient and compliant while also being caring. This isn’t easy as was illustrated by the ensuing storylines such as Nurse Gilbert haring off to her next appointment without checking for carbon monoxide poisoning because she had to fit in more appointments.

Productivity, maximising outputs relative to inputs, can keep costs down but is not, never was nor ever shall be, heart-warming, inspirational or morale boosting. Nor is it the case that consideration – showing care, going the extra mile, getting round the rules to reach the obvious conclusion – will ever boost productivity. But it does win hearts. True leadership, in my opinion, manages to balance these two aspects – one of the heart, the other of the mind. This feat of mental gymnastics can be achieved by anyone in any situation where one can replace “because” with “despite”.

In ‘storyland’ Harriet saw the error of her ways and passed the baton back to her caring predecessor. Nurse Gilbert could spend a bit of extra time checking that everything was fine, despite the pressure of extra appointments. In the real world true leadership is much harder, as we see in Theresa May’s position with regard to the USA in general and Donald Trump in particular. Even though many of his orders bear signs of not being considerate – feeding the anger of those feeling dispossessed – the position of a true leader, in my opinion, is to work with him despite them, not to reject the USA, through rejection of its leader, because of them. We live in his world if we respond in kind.

It’s hard to stay kind when being challenged; it’s hard to improve productivity when the role is to care. What our Prime Minister seems to me to be doing is modelling the best type of leadership – objective empathy. Good businesses are increasingly being led in this way, where the boss appreciates that things are rarely black and white, that everyone has a point of view. The crux is to be able to hold different views and move the organisation forward. If it looks like views in your organisation are too far apart to achieve this then maybe it’s time to call your own type of midwife – non-execs, mentors and consultants – who should possess the leadership skills that guide people to reconcile their views rather than see them crushed. Because the alternative would be spiteful.

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Brexit: the emotional dimension

Published on January 27, 2017

It’s been 7 months after the vote for Brexit and it looks like we have a plan, set out in Theresa May’s speech last week which will be backed up by a White Paper. Like business plans, the 12 points are legally sound and encapsulate what their creator, the Government, wants.But like many such documents it hasn’t taken full account of the other parties and their reactions, which will be driven by emotion as much as by law and economics.

The most important party in the negotiations is the EU and its member states. While they will acknowledge the economic benefits of maintaining a reasonably open trading relationship they are also rather traumatised (as are many Brits). Their emotional reaction has all the characteristics of a divorcee. The UK, as they see it, is having a mid-life crisis. It hasn’t had an affair but it feels restless and wants to leave. The marriage isn’t what it was 43 years ago when it started: that was just a big flat share. Then everyone grew up and UK thought “when am I going to be able to get out and see the world?”. Europe doesn’t know what it’s done wrong. UK was consulted on everything and when it really didn’t want to get involved it was allowed to opt out. It feels that it bent over backwards and now it’s feeling pretty hurt. Saying that we don’t want to take things that aren’t ours, or cause any trouble, just doesn’t really cut it with the abandoned party and so all our reasonableness isn’t going to cut much ice, at least not for a while. Maybe when there’s more agitation for withdrawal, especially if Marine Le Pen gets in, then we’ll be seen as Ms Reasonable. But for now we’re going to have to sit calmly and wait for the emotional storm to blow over.

Then there are constituents in the UK. Car manufacturers say that they can’t plan long term and the City is quick to point out the costs – we’re already hearing of banks moving staff out of the City. This is designed to frighten the Government into making promises for special treatment. The best response here is not to succumb, to keep analysing the situation and ensure that there are alternatives even if they involve costs or lost tax revenue in the short term but a better result in the long term. There is no mass departure in the offing because London has a huge centre of gravity which is stronger than any one organisation and even a whole sub-sector. A few thousand job transfers will improve the net immigration figures and reduce the dependence of the economy on financial services. Having organisations that are too big to fail means that the ruled hold more power than the rulers and that’s a tricky place to be because it can mean decisions are made to subsidise corporations with taxpayers’ money. That wasn’t popular in 2008 and it would be even less popular in 2018.

While Jim Collins advocates (in Good to Great) that great organisations don’t operate a blame culture, political systems still do. Success in the negotiations is far from guaranteed and if Mrs May is as capable as they say then she will have looked at the downside and considered how to apportion blame. Unlike her recent predecessors she won’t be able to blame the EU. If we have a complex treaty then that could be targeted, but it’s more natural to personalise the source of our grievances. It may be that old habits die hard and the French resume their historic role, or that a blogger combines that deep-rooted but vague enmity with some personalities. Maybe we will see the problems as having been created by the cavalier behaviour of the Three Brexiteers? How about Ian (Athos) Duncan-Smith – the aristocratic older one; Michael (Porthos) Gove – leaving the fray for the priesthood aka journalism; and Boris (Aramis) Johnson – the most worldly and vain of the three?

As they say, thoughts produce decisions but emotions produce actions. It won’t be until everyone’s emotions have been dealt with that Brexit will be concluded. And emotions are slower to change than policy makers and business planners would like. That’s why businesses take longer than planned to really grow, and why Brexit will still be around in the 2020s, just less painful/frightening/amusing than it is now.

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New year. Resolution

Published on January 12, 2017

As 2016, and the Christmas holiday that only featured three celebrities passing (Carrie Fisher Debbie Reynolds, George Michael), are finally over, the hope is that 2017 will be different. The public transport chaos and the ceaseless fretting over Brexit – whether it will be a Full English Brexit or a Continental one – indicate that not much has changed. Yet there remains a desire amongst the over-worked and underpaid (aka the population) to re-evaluate how we are organised.

It seems to me that underlying the current mood is a belief that returns on capital are unlimited and enjoyed by few, while returns on one’s labour are restricted by capacity and capability. This is accentuated by two factors:

  1. Our desire for safety (the second most fundamental need after food, according to Maslow’s hierarchy of needs) allows capital holders to protect returns that are stated to be for the benefit of the customer;
  2. Studies have shown that we naturally put short–term gratification above a deferred version. This hinders our ability to reduce our disposable income and to invest so as to become more productive.

The safety argument is so strong it’s now being used by trade unions that have suddenly developed a desire to sacrifice days of pay to ensure that no-one is hurt during the dangerous process of stepping through a door onto a platform.

The trouble is that it reduces innovation, because anything new involves risk by virtue of the fact that it’s new and its effects are unknown. The Medical Health Regulation Agency now requires that any new formulation of a vaping product requires £150 for a new certificate. This reduces the number of new formulations available to the consumer despite the fact that the 4 basic ingredients are the same for each, it’s just the proportions that alter.

The reduction of risk also reduces returns. Banks prefer to provide mortgages to house owners than loans to housebuilders so that the supply of housing remains constricted, which preserves the value of the housing stock and so the recoverability of the mortgage. Worse, it keeps anyone in a pension scheme less well off than someone who manages their own wealth because pension schemes use the risk free rate of return when calculating a pension and currently quote a pension of £25,000 p.a. for a pension pot of £1million! Corporate capital demands, and gets, much higher returns and this dichotomy is one of the facets of the very different returns of capital and labour which, incidentally, is now newly auto-enrolled in a pension scheme.

If I’m right, then the solution to some of our problems is resolution:

  • Resolution to manage one’s own financial affairs so that returns on what you have are in line with capital’s returns. The Lifetime ISA is a welcome step in this direction (and in line with my suggestion at a Reform conference 4 years ago);
  • Resolution to accept some short-term pain for long term gain. Whether it is re-training or setting up a new business, or both, a short term loss is inevitable although Government schemes can, and occasionally do, provide incentives and a safety net.

Such resolution – to manage one’s finances and changes in one’s career/business – may not make 2017 happy but it would improve prospects for 2018. And it would be new.

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12 thoughts for Christmas

Published on December 15, 2016

While 2016 may have been a challenging year on the global front, our personal lives have not been much affected yet, it seems: full employment, rising/stable markets and the only unrest so far has been transport – hardly a change. But only a hermit could fail to take note of the marked change in the world order at the start of 2017 which could lead to some of the dramatic effects of which we’ve been warned.

We develop coping strategies to deal with threats and one of the most successful for me has been singing, with Some Voices, – “The closest thing to being a rock star”. Whatever my mood,its sound never fails to warm my heart and tingle my spine. And it is now a thriving community, like the best village where everyone is accepted, no-one is talked about negatively and whose harmony is the perfect metaphor for guiding a rapidly splintering world.

We successfully sang songs from Christmas movies this week and brought joy to another 2,000 friends and relatives. And last Sunday we sang carols in the Church where some of us rehearse, which prompted me to consider the 12 days of Christmas. I wondered why my true love sent such a copious variety of gifts and I came to the (less than obvious) conclusion that they are a metaphor for our times. Let me expand?

12 Drummers drumming: drumming means drumming, as we have now been told, several times. I wonder why we didn’t reach that conclusion ourselves and needed a new leader to clarify it?

11 Pipers piping: he who pays the piper calls the tune. As I pointed out recently, the political class is no longer chosen from a pool of experienced people with different views, that can be challenged, but FROM THOSE WHOSE VOICES ARE HEARD MOST CLEARLY. Shouting and media spend to amplify the message (even patently untrue ones), has won power. And now those with extreme views have worked out how to use social media to get their messsages out without challenge and at lower cost;

10 Lords a leaping: “only 10?” you might exclaim. It seems that anyone who has been to Downing St for coffee (I had water) is now a peer, and a valuable check on our constitution is losing credibility, at the hands of those who have already lost credibility;

9 ladies dancing: they’re allowed to, even on their own. And it’s not OK to grab parts of them just because they’re dancing; nor insist that they stay at home or cover themselves to avoid the appreciative gaze of others;

8 maids a milking: come 2019 Britain will be on her own, so we’d better make sure we know how to do things that others used to do, like milking;

7 swans a swimming: don’t be fooled (again) by these apparently gentle creatures which appear to make no effort, yet still reach their destination. Rather like Boris.

6 geese a laying: and creating little geese. As our little ones stare wide-eyed at the feast around them, spare a thought for their future in which they’ll still be paying for the mistakes of the last decade;

5 gold rings: the ultimate safe haven (except from an Italian referendum apparently), and now the ultimate two-way bet. You can be sure that even if we go to hell in a handcart the price of gold will keep going up, if only to re-furbish the recently nuked Trump Tower.

4 calling birds, who sing in harmony. Our finale was The Beatles’ All you need is love. There are 7.2bn people on the planet at the moment and it will be 9.6bn by 2050. If we don’t use the knowledge that we have gained (a.k.a. civilisation) to live with each other then at the very least we’ll be worse off spiritually, emotionally and materially.

3 French Hens: better enjoy them before they become unaffordable? Well that’s what some would have us think. But French growers need to sell their products too and they won’t take kindly to having their market reduced in order, apparently, to maintain free movement. It’s not very useful without a destination.

2 Turtle Doves, who live all over the world, migrating from one place to another, rather like people, only peacefully.

And a partridge in a pear tree, which I’ve never seen. And nor have I seen a protectionist, fascist inclined, post-truth democracy rear its ugly head, yet.

I’m not looking forward to 12 such gifts from my true love (I haven’t got the space). I thank her for her most precious gift – true love – which I enjoy 365 days a year, and hope that you are similarly endowed.

Happy Christmas.

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The rhythm of business

Published on December 1, 2016

rhythm

It’s been a year of upheavals: I’ve moved house twice this year and helped my aged aunt re-locate. So I count myself a bit of an expert in the removals business. I’m no stranger to hard work – I’ve watched it for hours – and observed that my concern that they wouldn’t finish in time, which built to its peak after about 40% of the time when there was no real sign of progress, coincided with an acceleration to a timely conclusion. Humping stuff keeps them fit. But, like Ed Balls, their movement is not what inspired me to think of the waltz when discerning their rhythm: slow, slow, quick, quick, slow. Or as Chris would describe it – Survey; Box; Load; Drive; Deliver.

Which got me to wondering what else falls to this rhythm? Here’s my list, so far:

  • Building work, where it takes ages for things to get off the drawing board and then everyone exclaims “look it’s already up”. It involves planning permission; finance; building (often from pre-fabricated parts); fitting out; and eventually the final account.
  • Selling, where the search can seem endless until a prospect crops up. The steps are – research the market; form relationships; identify the need; issue the proposal; sign the contract.
  • Business planning where understanding how the business really works is critical. So the steps are – analyse; model; write; recruit; finance.

If I’m right then there are a couple of useful things to take away:

  1. Don’t panic if after 40% of the time you seem to have not made much progress. But make sure that by 42% there are some signs.
  2. When things do seem to be happening don’t take your foot off the pedal and end up with nothing because the last piece didn’t get started in time. At FD Solutions we’re used to people saying that the proposal has been issued so the sale will happen very soon; and that the business plan is in place it just needs the finance. The trouble is that the commitment of others – a contract – takes longer than putting everything else in place. This is because, in my view, even when a person knows that rationally it’s right to buy the product or make the investment, their emotions haven’t caught up. It’s only when they feel emotionally committed that you can execute the plan properly because “thoughts produce decisions but emotions (“e-motions”) produce actions”.

So make sure that you factor this lag into your planning because otherwise you’re likely to run out of money. Which could mean that you’ll have to start the waltz again. Or worse, learn the cha cha.

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Capitalism 2.0

Published on November 17, 2016

capitalism

It seems that in the four years that I have been writing my blog the world has been getting stranger and stranger. I’m not referring to Hillary Clinton’s bid to be the first female president of the USA, but Glenda Jackson’s portrayal of King Lear on a set adorned with plastic chairs, whose manservant turns out to be Ian from The Archers. Oh, and the vote, announced on our 9/11 that the US had Trumped the UK in its decision to blow a rather large raspberry at the Establishment.

Despite my public school education and chartered accountancy qualification I don’t see myself as part of that Establishment. My aim, since experiencing true poverty in Lesotho in 1979, has been to seek to understand The System, to be listened to by it and to help it change for the better.

Some change can be the peaceful result of constructive debate and I have a couple of modest successes so far:

  • The WealthBeing calculator has helped people understand how much capital they need;
  • The Supper Club and Grant Thornton have just issued a review of tax which inter alia proposed an export tax credit, an idea that I floated 2½ years ago.

But these recent electoral raspberries indicate that I’m not the only resident of the Western world who believes we need rather more significant change. Those of you who are my contemporaries will recall the slogan which swept Margaret Thatcher to power – “Labour isn’t working”. I suggest that, 37 years later the fact is that “Capitalism isn’t working”. Like any slogan the truth is rather more opaque. But it contains a fundamental truth – that there are significant flaws in the current system. And we need to fix them, because my experience as an FD, entrepreneur and mentor tells me that if problems are ignored they only get bigger.

And there’s still a lot of ignoring going on. Those who say that Brexiteers are wrong because Britain is the 5th largest economy and it wouldn’t have become so without immigration, miss the point. The flaw is not the total wealth created, it’s about distribution. I think that the reason that people voted for Brexit/Trump is that the methods of re-distribution, on which an efficient free economy is based, are no longer fit for purpose; any more than the assumptions on which pollsters operate are. Whether it be QE, TTIP or a lack of competition in broadband, we are becoming suffocated by bad decisions and regulations, based on the premise that they give stability to the capital markets whose wealth trickles down to us. The “trickle down” theory was discredited in Third World development many years ago and is obsolete here.

The only way to keep capitalism working peacefully is to enlarge access to creation of capital and encourage innovation by removing barriers to free competition. Specifically I propose the following:

  • Infrastructure spending that improves productivity: ultra-fast broadband and at least one new runway are matters of urgency
  • A taxation system that levels the playing field between SMEs and the mobile multi-nationals. Withholding taxes on remittances from the UK would be a good start;
  • Fair employment. Taxation of employees and sub-contractors is significantly different even though in say the NHS people do the same job under different contracts and in transport (Uber, Deliveroo) it’s not clear which way they are actually working. I’m pleased that this is now being reviewed.
  • Where industries are in terminal decline, systems that enable its workers to re-train, to the same level of value adding that they were achieving before. I’m told that manufacturing is about to face a skills shortage and London always needs more workers than are available. Why not move away from academic to technical qualifications and include bursaries at technical colleges for older workers? A diploma in Drone pilotage is more useful than a degree in the History of Aviation.
  • Most importantly, if we are to get anything done we need leaders who understand their electorates. The boundary changes will be an opportunity for constituencies to choose people with real world experience, outside of the Westminster bubble; and a cap on electoral spending would reduce the influence of capital “1.0”.

There have always been battles between owners and their employees but there are now a lot of people pushing at the pillars underneath the ivory towers whom the incumbents can no longer ignore. Lear’s daughters, who now control their former ruler, throw him out into the storm. Does he, who is now mad, consider their ingratitude? No for “that way madness lies”. Let’s have a sanity check before the storm arrives?

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Have we descended to this?

Published on November 3, 2016

us_election

I’m not an aficionado of films but one line that comes to mind in the run up to the US election is from Flash Gordon when his girlfriend cries “Flash I love you but we only have 14 hours to save the world”.

I think we’re close to this predicament now. And from these shores we are about as powerless to influence the outcome as Dale was to divert Emperor Ming the Merciless from his plan to destroy the Earth. But we Brits do have one weapon for which we’re renowned – our creativity, especially our wit and sarcasm. I wonder if this re-working of a popular nursery rhyme can penetrate the Lightning Field 3,000 miles to the west?

Hillary Clinton had a hunch

That she could get to the White House

Off she went (without Donald the Trump,

Trump, Trump, Trump).

Hillary Clinton lost first time

Cos she got beat by Obama.

President planned a healthcare event

Bump bump bump.

 

Eight more years

She danced to the Democrat band.

When Hillary led the big charade

She looked so proud and grand.

Then came tricks Her server to perform

The FBI looked her straight in the eye

And she cowered in the storm.

Electorate had been hurting

For a long time

It woke one night in a financial fright

And thought to make them pay.

So Cruz, Bush et al they hit this bump

And primaries looked like a circus.

Low they went led by Donald the Trump

Trump Trump Trump.

 

Hillary Clinton packed her trunk

And roundly beat Bernie Sanders

Off she went to meet Donald the Trump

Trump Trump Trump.

Hillary Clinton emptied her trunk In fighting to be POTUS

Can she win and dump Donald the Trump

On his rump?

Sometimes rational argument is not the right approach. Especially when there’s an elephant in the room.

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After Brexit, Robots

Published on October 20, 2016

robots

On June 24th I was asked by a technology magazine for my reaction to Brexit. I think I heard myself say that the solution to a lack of immigrant labour for seasonal activities such as fruit picking is… robots. I don’t think that there is a robot capable of such an activity at the moment but robots are going to do more and more, it’s inevitable. It’s so worrying that even capable business people have shared their fears with me:

  • Will they dislocate society by creating more unemployment?
  • Will they reduce economic activity – GDP – because robots don’t spend money as workers do?

Initially I think they will displace jobs. All machines displace human activity, that’s one reason why we create them. But they create new activities too. Imagine the delight at being the first train guards, 150 years ago. But it is beyond my imagination to see some jobs being done by robots:

  • Hairdressing is too intimate, almost a ritual intercourse between cutter and head owner;
  • Analysis of a company is always unsatisfactory, in my view, until you have reconciled the figures with your assessment of the managers;
  • And how could we ever live without handmade biscuits…

The removal of wages and their replacement by capital equipment is part of a trend that has been accelerating in the last 50 years – the concentration of wealth in the owners of capital rather than the providers of labour. Wealth attributable to labour has moved from 66% in the Fifties to less than 60% by the mid-2000s. This has been disguised by the reduction in poverty in the developing world and the consequent reduction in costs for consumer/workers in the West. But that boon is over and people can see it when they shop. I think that the degradation of jobs is at the heart of the Brexit vote and it’s an issue which will become more acute with the advent of artificial intelligences.

I don’t think that we can bury our heads in the sand any longer. We need to invest in re-training and that will need some tax revenue. Surveys show that the current tax regime never collects more than 40% of GDP and that’s why I subscribe to the view of Thomas Picketty that we should add a capital tax. I would exclude pension funds; and SMEs and houses up to a certain size because “the first million is always the hardest”. In my view taxing capital in this way and re-training workers strikes a balance between enabling wealth creation and re-distributing it – a new social contract perhaps?

Of course the reluctance of all of us to pay more tax is ever–present. But if it got the railways working smoothly, and removed wildcat strikes by taxi drivers et al, as well as creating new, desirable jobs then it might be accepted by resident capitalists. There is still the risk that a large non-resident corporation could claim that their robots are Irish and should be taxed at the rate it has agreed with that Government. But at least now we could revoke their Robo-visas and send them back.

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What’s the difference?

Published on October 6, 2016

customer_service

We’re all used to the fact that dealing with big companies – you know the ones where you can’t speak to the boss – is often unpleasant. They’re so big that no-one is big enough to matter; asynchronous communication has been replaced by unidirectional communication: emails are from “Don’t reply@” and phone numbers are private. Rather than grant a customer the right to query something, they prefer to use resources advertising the fact that they are a listening bank/store, creating FAQs that are banal and we are left to suffer. It’s usually the opposite with smaller companies which are keen to prove that they’re better than the competition. You can probably spot which of these examples that I have suffered/been delighted by recently are the big companies:

  1. I gave notice to the satellite TV company that I was moving out of my London flat and only needed to keep my Monmouth account. They told me I would have to pay the full monthly charge, keep the box with its unseen recordings (are all these recording devices 75% full now or is it just me?) but never use it or else pay £80.
  2. I gave notice to the internet provider too and told them that I would only need the one account in Monmouth. They waived the notice period.
  3. I gave my gym two weeks’ notice but they insisted on the full month. I queried whether I had had the full service given that the pool had been shut for about 10 days in the last year; and they managed to run out of towels! I know that there are unexpected surges, but towels?
  4. I took a rug back to the shop because it was the wrong colour. I’d accidentally thrown the receipt away the night before. I offered to email it but she exchanged it anyway.
  5. The new winch on my boat stopped winching. I got into port and emailed the site at 8.30pm. By 9.30 I had a director on the phone and by 2pm the next day I had a new winch, even though I was 400 miles from where I had bought it
  6. My ironing gets done weekly but the provider would only do it off-site. I asked for it to be delivered back in less than a week and got a delivery charge. I queried it, on the basis that it wasn’t on the price list, and arranged for the cleaner to drop it off on the way past. I got another delivery charge.

The first three are publicly quoted. The fourth is a big partnership and the last two are private. So it’s not always a question of size: any organisation can look after the customer and anyone can put themselves first. So what’S the deciding factor?

I think it starts with S. Prices usually follow an S curve: low as the business enters the market, rising as the product’s demand rises, then levelling off as demand catches up. It’s in the middle phase – where companies think that they’re in control and lay down the rules in ways that are patently unfair in order to maximise profit – that the business plants the seeds of its own destruction, destroying customer loyalty and enabling competitors into the market who don’t have to try that hard to provide a better service than the one now offered by the incumbents.

This was always a problem before mass communication but is more acute now. Some businesses get this and are using their resources to maintain and improve customer service. It’s tricky in the ever more complex world where allowing customer service representatives the power to waive fees is close to enabling employee fraud. But it is possible and so I plan to stay with BT. But don’t tell Sid.

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