Review of The Good Jobs Strategy

If you missed it in the sidebar, there is this review of The Good Jobs Strategy, by Zeynep Ton by David Foster. Business decisions even outsiders and nonprofessionals can to relate to.

But, with the growth came problems. There was a lack of discipline in the stores, in how the stores communicated with headquarters, how the company selected its products, and how it communicated with suppliers. “In 2000, bills and invoices were still processed by hand, and headquarters communicated to 1134 stores via fax because there was no companywide email.” In 2008, two senior IT executives (newly hired from Walmart) concluded that Home Depot’s IT systems were about where Walmart’s had been in 1991. In summary, HD had become “a classic example of a service company that did not fully appreciate the role of operations in making customers and investors happy…Operations are all those factory-like activities that a business has to carry out in order to provide whatever it is that it sells. ..In a retail store, for example, operations involves things like having the right product in the right place, having a fast checkout, and having a clean store.” Zeynep Ton says that internal measurement systems often don’t focus on such matters–at one retailer she worked with, “Twenty percent of the (store manager’s) score had to do with the store’s customer interactions.” In this chain, “mystery shoppers” would score the store on things like how the employees greeted customers and made eye contact. But, she notes, “kindness or friendliness won’t make up for operational incompetence. ..It is hard for your dry cleaner to make you happy if you can’t wear your favorite suit to an important interview because they didn’t get it cleaned on time.”

I have a pet peeve that the customer satisfaction surveys that get sent out for every oil change and emergency-room visit are useless documents.  We have them from time-to-time at my hospital. Stop and think for a moment what kind of questions one would ask customers at an involuntary psychiatric facility, and what the meaning of any statistics would be, with the mixed data of people who got better and those who are still psychotic or personality disordered.  We thought we would do better when we did exit interviews instead, because trained professionals could make the necessary distinctions between responses.  What went wrong there is that half the people interviewing were incompetent folk who couldn't be fired because they were state employees that no one had bothered to make a paper trail about. This was seen as a good spot to put them out to pasture, where there would be no visible damage.

Then, finally, when we had the data from the competent interviewers, that might have told us something useful about how we treated customers and what we could do about it, we simply ignored it.