Enemies of enterprise?

Because of the work I do, I meet quite a lot of people who have set up their own businesses or who have made the perhaps more difficult step of turning a small business into a medium-sized one. When I ask them what the major obstacles are, most have the obligatory rant about government bureaucracy and the inland revenue. As I’ve said before, there is something almost tribal about this. You can’t be a proper business man or business woman unless you moan about the tax office.

However, for most of those I have spoken to over the years, the aggro they have had with government departments is nothing compared to the runaround they have been given by the large private sector monoliths and, more specifically, the banks and utility companies. On Radio 4’s Today programme this morning, government minister David Willetts suggested that cartels are operating in both these sectors. This will come as no surprise to those business owners who have had to deal with them. There may be a variety of suppliers but they all seem to adopt the same industry standards, with systems and processes that can’t (or won’t) adapt to customer needs.

As well as the banks, who seem to be universally detested by those in medium-sized businesses, particular vitriol is reserved for telecoms and broadband suppliers. This is interesting because, although there are dozens of suppliers, they have tended to behave in a monopolistic way. The same expensive help-lines, the same inability to go directly to second line support after having logged your original problem. And the same barriers to prevent customers changing suppliers. There might have been several players in the market but, to the customers banging their heads on their desks, it felt as though they were all in cahoots. It took a couple of rounds of regulation to get any improvement in the service.

A couple of years ago, Simon Caulkin noted that, while the Cold War might be over, Soviet-style centralised planning is alive and kicking in the private sector oligopolies. In service organisations, retaining control and reducing complexity means, as far as possible, designing out the customer. As John Seddon says, designing out the customer leads to ‘failure demand’. But, if all your competitors do things in the same way, then why worry? The customers can only go to another supplier which will subject them to the same treatment. Most, therefore, will just grin and bear it. The smaller businesses, without the financial muscle to exert any influence, usually just seethe in silence.

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6 Responses to Enemies of enterprise?

  1. Pingback: Enemies of enterprise? - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Anon says:

    I like the reference to communism. I worked at an investment bank where slogans exorting the workers to ever higher standards were on every screensaver and on every wall. It seemed to me, as the revelations of the latest huge losses and the lies in the official accounts became clear, dissident vices having been silenced by expulsion or transfer to corporate Siberia, that far from having been defeated, Soviet-style communism had in fact conquered the world.

  3. The phrase ‘Designing Out The Customer’ makes it sound like a concious decision, but I think in reality it is an unintended consequence of trying to increase efficiency.
    Increased efficiency sounds like an unequivocally good thing. We all want efficient service, don’t we? However, too often, businesses see greater efficiency purely in terms of reduced costs, and getting more from resources. This we can call internal efficiency. Customers, on the other hand want good service, promptly at a time that suits them – you guessed it that is external efficiency and to achieve it there has to be some slack in the system.
    Managers too often assume that when they achieve their internal efficiency goals the customer experience will improve, but the opposite is usually true. An externally efficient organisation would say: Phone this number, we are waiting for your call. Internally efficient organisations say: Your call is important to us, please continue to hold. As a customer, or user of a service which of those organisations would you describe as efficient?
    What’s more when you factor in the Failure Demand described above internal efficiency often equals false economy.

    • Bina says:

      Beautifully put Mr Knox. I’d also say that when ‘internal efficiencies’ are really examined, they are nothing of the sort. Monitoring, ticking the boxes and all that other non-productive work is a huge cost that is never properly accounted for.

      • Rick says:

        I agree. I don’t think people always set out to design out the customer but by designing out the complexity, that’s what they end up doing.

        Designing out complexity makes sense but in service organisations, the customers are part of the process and that’s where the complexity comes from.

  4. Pingback: Convergent evolution or cartels galore? » 21stCenturyFix.org.uk

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