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Corporate Culture

Entry 1501, on 2013-02-24 at 11:50:04 (Rating 4, Comments)

Note: the following blog entry is based on personal opinion and anecdotes. I have no real scientific evidence to support many of my contentions. I do think it is a valid hypothesis however, because I believe it's difficult to refute most of my individual points. So, now that you have been warned, here's the rant...

I often wonder why so many companies produce such mediocre products, provide such terrible service, and generally just don't seem to reach the potential we might expect of them. I know that there are a few fairly good products around too, and even with the rather lacklustre service many companies provide most issues are eventually resolved, but it still seems to me that things could be so much better.

If you think the products we have today are good then maybe you are right... but maybe you are wrong too. When Apple started producing the iPhone many people wondered why they bothered because the phones then available were, they thought, perfectly adequate. But what has happened a few years later? Just about every advanced phone is either an iPhone or an iPhone look-alike. Maybe those old phones weren't so good, but we just didn't realise it until a much better one came along.

I'm sure the same applies to almost every product we use. One of my interests is in user interface design and I am constantly surprised at how terrible the user interface for almost everything is. How many people can navigate the arcane menu systems and change settings in their TV for example? And why are so many web sites so atrociously designed, and why is it almost impossible to get any help with these frustrating situations when they do arise?

I think I know why. It's because, in almost every case, large companies simply don't care about their products. The product (or service) is seen as an annoying but necessary ancillary issue to be dealt with on the way to the company's real goal: making money.

I'm not saying a company shouldn't make money. Clearly in our modern capitalist system that is an absolute necessity. What I am saying is that making money should be seen as an outcome of doing what the company is really there for (producing a product or providing a service) rather than it's primary raison d'etre.

Let me give a few examples of where this phenomenon has become apparent. I'm going to talk in generalities here because it's unfair to mention a company by name without giving them an opportunity to defend themselves, but you might be able to guess who I am talking about in some cases.

I work with many software companies in my professional life and many of them provide software which is really expensive. I also work with products of smaller companies (sometimes just a single developer) which are often quite cheap. Which of these products should we expect to have the greatest reliability and which company should be the most responsive to questions and requests for help?

If you have ever had to deal with a large software company you probably already know the answer. Surprisingly it is often the smaller, more focussed companies which create the most reliable and most functional software. And trying to contact one of the big companies to report a bug, ask for help, or request a new feature is usually a waste of time. On the other hand I have had a lot of positive experiences with smaller companies where they have given answers to questions very quickly.

On the subject of getting help I really must mention the greatest travesty of modern customer service: the helpdesk or help phone system. There are probably cases where these can work moderately well, and there are occasional situations where it's possible to get certain issues resolved, but the main problem is that they have become the only solution for many companies, not because they give good results but because they are cheap or they are simple.

Many companies operate technical services which might be open to malicious attack or susceptible to highly esoteric problems, but you would expect the experts at these organisations to deal with those issues. In smaller companies where a person with good technical skills is in charge this usually happens but it's surprising how often in bigger companies really basic errors are made.

For example, email systems might be hacked (just a totally theoretical example, you understand) or software of truly awful design might be produced (by a supposedly talented company). These technical problems happen in big organisations either because the people with real technical skills just aren't there or if they are there they are constrained by the wishes of their "superiors" (I hate that word) for making money ahead of providing service.

Another cause of these issues is outsourcing. Theoretically this should be a great idea because a specialised company or other organisation can handle a subset of the tasks the company contracting it was previously required to perform and, because that's their specialty they should be able to do it better.

But by now you should be able to guess what really happens. That's right, instead of outsourcing to get better results it is done for other reasons: either to save money or to remove responsibility from the company and attempt to evade its responsibility. So, for example, an internet company could outsource it's email services then blame the company it outsourced to for any (almost inevitable) failures. Again, service is forgotten and quick and easy profit is the sole aim.

So why does this happen in most big companies but rarely in small ones? It's because of that greatest modern obstacle to progress: managers. Yes, professional managers generally don't know much about the products and services of their company and they aren't motivated to try to improve them either. Their focus is on greater profits at whatever cost is necessary: reducing staff, making products cheaper, providing the absolute minimum of service, using cheap foreign labour, etc.

The real problem is that this often works (from the company's perspective). Many companies who take this approach do make quite good profits, at least for a while. Why don't the famous market mechanisms operate here? Why don't consumers just change to a company which still does provide good services and products? Probably for several reasons: most of the other companies are operating the same way so there's no advantage in changing, the customer is locked in with some sort of contract, they aren't aware of how poor the service they are getting really is, etc.

And the small companies which might start and are not yet affected by this malaise usually don't get far before they are either destroyed by unfair competition from the bigger ones or are bought by them and assimilated into their corporate culture.

What can be done about this? I don't use products from big companies where I can avoid it. For example, I only use Microsoft and Adobe products when I'm helping other users who use them. Unfortunately this means I have had to but licenses for them so in fact I haven't achieved much there! Also I use almost exclusively use Apple computer products and Apple has grown into one of the biggest corporates of all. But at least there is a focus on innovation and quality of some sort there still.

So in reality there isn't much that an individual can do without making their own life awkward, because we are all quite tied into the corporate system. But at the very least we know what to expect and why, in most cases: poor service and mediocre products because the leadership just doesn't care.

Comment 1 (3446) by AbandonTV on 2013-03-09 at 10:37:02: (view recent only)

“….I’m not saying a company shouldn’t make money. Clearly in our modern capitalist system that is an absolute necessity…”

We don’t really live in a capitalist system. To varying degrees governments control, regulate, manipulate and interfere in trade, industry and the economy through their legal right to initiate force.

“..What I am saying is that making money should be seen as an outcome of doing what the company is really there for (producing a product or providing a service) rather than it’s primary raison d’etre..”
In anting approaching a capitalist system (free market) consumers reward companies which provide the best goods and services by choosing to buy from them, rather than from competitors. If a company gets too greedy, lazy, overpriced, annoying, incompetent (or whatever) customers can make complaints, threaten to take their custom elsewhere or just take their custom elsewhere.
In other words making money and providing the best service are not mutually exclusive. It’s a constant tug-of-war between consumer and producer but that’s only fair. Companies have to be allowed to experiment with business strategies, just as consumers have to be allowed to shop around.

Complaining that company X has a rubbish approach to customer service (or whatever) shows the system is working. As more people express dissatisfaction in this area is opens up a gap in the market for competitors to fill, and this also provides an incentive for the original company to change its business strategy to prevent its customers from leaving.

The bottom line is that people love their Adobe, Apple, Microsoft products and that’s why they buy them. Their widespread use is part of their appeal. Not having to train new employees how to use photoshop is an advantage. And likewise, being skilled with photoshop will give you more employment options than being skilled on some ’boutique’ photo editing software (although that would give you a different kind of advantage). It’s all a case of ‘swings and roundabouts’.

The only alternative is to have a third party ‘regulate’ the industry, which introduces the use of the initiation of force into the equation. If an agency of force (such as a government) started heavily regulating or even monopolising, say, the video editing software industry we’d see all innovation, choice, quality stop immediately and costs start to rise as competition and profit was longer the driving force.

Comment 2 (3447) by OJB on 2013-03-09 at 10:37:36:

I think our economic system is *primarily* capitalist, although it isn’t *purely* capitalist. Presumably in a pure capitalist society the government would have no role at all or, according to some commentators, just the role of police and defence.

Yes, I understand how capitalism is supposed to work in theory. What I am saying is (like all ideologically driven systems) it doesn’t work in practice and it never can. The purely competitive model has been proven to be defective by game theory, for example.

Actually I work in IT and I can assure you almost no one buys a Microsoft product because they love it! They buy them because their employer forces them to, or because their friends use them, or because they are ignorant of the alternatives. Again you quote theory which is totally different from reality.

I understand your reticence in allowing a third party into the equation given the often poor results in the past when this has been tried. That’s why I espouse a low-key approach initially until a better form of control can be devised.

Comment 3 (3448) by AbandonTV on 2013-03-09 at 10:38:24:

“..Yes, I understand how capitalism is supposed to work in theory. What I am saying is (like all ideologically driven systems) it doesn’t work in practice and it never can. …”

I would suggest that allowing one small group in society to have a monopoly on the LEGAL right to initiate force and commit theft is far more of an ideologically driven system. In fact the idea that this could ever produce a functional, prosperous and civilised society in practice is a utopian dream…. it is a fantasy which has been put to the test and for centuries has consistently turned out to be a catastrophic and destructive disaster, up to and including the current times.

At some point we are going to have to finally accept the fact that giving one group the legal right to behave in ways which are universally considered immoral, unworkable and deplorable for the rest of society is actually NOT ‘a good idea’ after all!

“…I can assure you almost no one buys a Microsoft product because they love it! …”

Sure. I agree. But they must have decided the advantages (such as using the same product as friends or work colleagues) outweighed the disadvantages (having to turn down a particular job, or be socially isolated) – otherwise they wouldn’t have decided to make that choice.

We often make *reluctant* choices, but that’s not quit the same as being *forced* to do something. We are being ‘forced’ only by our own desire to achieve the best overall outcome for ourselves in the present moment.

You can’t really build an effective rail network without everyone conforming to a standard gauge. And so whoever builds the first railways pretty much dictates what that gauge will be. It’s to everyone’s benefit to conform to it. This might be annoying but if that’s what it takes to create a national rail network then it’s still less annoying than having to travel everywhere by horse and cart.

But eventually the advantage of changing that gauge (or perhaps switching to a whole new type of transport system) will outweigh the disadvantages of sticking to the existing convention.

In the same way, Microsoft is (in a practical sense) the price the world had to pay for a cheap / universal operating system which *allowed us* to make that transition from typewriters and filing cabinets to computers. I’d call it a necessary evil which facilitated a greater good. It won’t be around forever though….

Comment 4 (3449) by OJB on 2013-03-09 at 10:38:50:

It has been demonstrated mathematically, through game theory, that competitive models ofter produce the worst outcome for all concerned. In the real world we see this with phenomena such as resource (for example fisheries) depletion and climate change. A pure capitalist, free market system is just about the worst possible system in these cases. The world is now getting to a point where we do need to change the model.

Also you seem to concede that capitalism often creates a sub-optimal outcome but you say we should just accept that. Isn’t it time that we admitted that capitalism is often a poor system and there might be something better? I’m not suggesting Soviet-style socialism and, to be honest I’m not sure what the answer is, but maybe the first step is just to admit that capitalism often doesn’t work. At the moment that discussion doesn’t even seem possible.

Comment 5 (3452) by AbandonTV on 2013-03-10 at 15:43:23:

No system can turn reckless, irresponsible and stupid behaviour into great outcomes. But some systems are more vulnerable to flaws in human behaviour and some systems invite the worst kinds of human behaviour - and limit the amount of good which sensible behaviour can achieve.

Environmental/ resource destruction is basically an issue of the commons. How do we protect that which is shared by all and which nobody has direct responsibility for? Government can't be the answer because government itself is the biggest example of this problem. Governments do not suffer direct loses. They have no investments to protect. And they can never be held to account. When political leaders create and enforce policies which lead to environmental catastrophes they still get to retire on a big fat pension, publish their memoirs and receive tax funded personal security for life. It is the people who are forced to pay for their mistakes, perhaps for generations to come.

There is zero incentive for anyone in government to protect the environment, and plenty of incentive for them to give big (and dirty) business special treatment in return for bribes (such as campaign donations). In fact government is THE vehicle (ie a tank with guns) by which dodgy businesses are able to totally wreck the environment for profit. Government effectively insures and regulates these businesses, but not with its own money (it has none), but instead with the people's money (taxes). The BP oil spill, for example, should have put BP and its insurers out of business. Instead the government forced the tax payer to foot the bill and vast profits were made by the clean up companies. You might like to look at who acquired those clean up companies just prior to the spill (and who sold BP stock just prior to the spill).

Governments are the no. 1 culprit when it comes to environmental destruction. Just look at the wars they wage which cover the middle east in depleted uranium and poison ancient aquifers for centuries to come - wars for profit and empire all based on proven lies (such as government/ media "conspiracy theories" about WMDs). Private enterprise doesn't even come close to this kind of destructive power (except where it is able to join forces with government).

And as if facilitating environmental destruction was not enough governments also use phoney environmentalism as a means to consolidate power and wealth and carry out worldwide social engineering agendas - such as UN Agenda 21.

And governments use their monopoly on the legal initiation of force to suppress genuine green tech which threatens their (and their friends) monopoly on energy production (ie oil). It's no accident that energy production technology - in the public domain - has hardly advanced at all over the last century, and is now going backwards! (windmills). We accept "free" information technology (ie the internet) as being the product of a natural evolution resulting from a century of experimentation, yet "free" energy technology was also being patented a century ago. So where is it?! (Actually it is right here).

...Also you seem to concede that capitalism often creates a sub-optimal outcome but you say we should just accept that...

It's not capitalism which is to blame, it's just life. Progress requires investment and investment requires commitment, such as commitment to a particular gauge of railway track, or commitment to a particular software operating system. Every new gadget we buy is out of date by the time we get it home. But that's not the fault of the free market. You just can't have rapid progress without creating a world where most things are out of date!

Personally I do not regard capitalism as a "system" at all. Capitalism/a free market is just *what we end up with* when we stop allowing a single group (such as a government) to have a monopolistic legal right to initiate force against us.

Capitalism is basically adulthood. Adulthood is no guarantee of anything. Adulthood is not a system which controls us from "above". Adulthood just happens when we decide that being free and independent and responsible for ourselves is more desirable than living with our parents and having our lives controlled by them.

And in a similar way when society decides that being free, independent and responsible is preferable to having our lives dictated by governments we will become an "adult society", perhaps for the first time ever.

Becoming an "adult society" may not just be preferable, it may soon be the only option available to us - if we are to survive as a species without blowing up the planet and turning it into some Orwellian nightmare.

Comment 6 (3453) by OJB on 2013-03-10 at 15:44:30:

You said: "No system can turn reckless, irresponsible and stupid behaviour into great outcomes." Not sure that's always true, but let's say it is. In that case which system encourages reckless behaviour? That would be capitalism, wouldn't it? Need I menton the global financial crisis?

So you think governments are the number one cause of environmental problems. I would disagree strongly. You also say we need a "commons" approach but you don't seem to say what that should be.

I do agree that the bail-outs of finance companies, BP, etc, were a bad thing but a natural consequence of capitalism is that we do get corporations which are "too big to fail". There should be a limit on how big any organisation can get.

You think "capitalism is adulthood". Where does that idea come from? I agree we need as much individual freedom and responsibility as possible but I disagree that the idea should be taken to extremes and I disagree that capitalism is the way to achieve that aim anyway.

Quoting an extreme scenario, such as an Orwellian world, as a point against government control is wrong on two counts. First, using an extreme to counter a much more moderate suggestion is misleading, and second, we are already heading to an Orwellian world where corporations control every aspect of your lives instead of governments. I prefer governments - at least we can vote them out!

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