How companies fall apart and exit business? Inventing, developing and supporting products are connected to employees supporting it. Written by Venes Alic.
Violet and Klaus walked into a donut shop. Violet was carrying their baby sister Sunny. As they were looking for donuts, the cashier fell asleep behind the register. Since there were no donuts left in the store at this time, they went to Walmart to buy diapers for their baby sister. After walking two miles to get to the other side of Walmart, they found an empty shelf.
From there, visibly irritated, they went to Kroger to get On The Border Salsa Con Queso, four jars of it. This time they were ready, with their phone in hand, the native iOS app open and telling them it was available, they found the correct shelf and, yet, no On the Border Salsa Con Queso. Even more visibly irritated, Violet, Klaus, and Sunny started swearing a lot (Sunny was bubbling). The Christmas Eve dinner and visit by their uncle Count Olaf may have to be canceled.
CAN YOU HEAR ME?
Needless to say, they ordered some comfort food through the McDonald’s app. When they showed up at McDonald’s drive-thru, ready to share the code and/or number, Violet, Klaus and Sunny were notified that their order did not come through and that maybe there is an issue with the appcommunicating with data servers. Oh, how I wish I could tell you that this is a story with a happy ending, but this is not one of those stories. It is a story about a series of unfortunate events people encounter when shopping, in apps and/or in person, a direct indication of disruptive innovation being disrupted from the inside, leaving customers hanging, and money left on the table for unsold products.
While donut shops struggle with balancing demand and availability, it is the big corporations that have difficult time finding focus in this time of, almost, unlimited disruption. Smaller players are taking bites out of the market, as if it were a doughnut. Start-ups, with money in their pockets, focus on specific segments of markets and improve it. They create service where there was no service before, trim all the weight and unnecessary technology that could hold them down. A fresh outlook at the old market.
DYSFUNCTIONS OF A COMPANY: IT’S THE APP
Robinhood, the app, with its $0 fees and $0 account minimum (at the time of writing this article, some restrictions may apply, continental US only…), was able to disrupt stock trading markets and the giant corporations that were managing it for decades. While the giants of the trading industry were trying to bring their phone systems into the 21st century, Robinhood jumped over technology and went directly for jugular, where it hurts the most, the fees and cost of transactions. Just like David bumped Goliath gently, centuries ago, who fell down with plenty of noise (the giant fell down, I repeat…) Robinhood was able to focus all of its force into a single point, and disrupt.
With so many small companies taking a bite, long-time established finance companies started considering its own, slow and painful (it is never fun, really) Death by a thousand cuts. While the big companies are able to manage their long-time clients and frequent phone callers, the new generation, millennials – want all the attention and give none, was
difficult to reach unreachable with old methods. So, the giants tried to imitate smaller players and…innovate. Y’know, like Goliath joining David – if you cannot beat them, join them. But this is where problems start for companies old enough to learn new tricks.
DYSFUNCTIONS OF A COMPANY: TRIBAL MANAGEMENT
With deeply entrenched management, divided into tribes of corporate structure and years of following orders, they are experiencing a very basic…lack of ideas. The workforce, trained to answer phones, cannot easily adapt to new timelines. Think McDonald’s for a minute. That’s actually how long it takes to get a burger and fries at McDonald’s, a minute. This giant corporation perfected a new service that everyone tried to mimic. Fast service. Similarly, FedEx went for overnight delivery and Amazon started a same-day drop-it-at-your-front-door-and-pray-it-does-not-break service. Expectations for delivery became very high, almost overnight.
So, enter that McD drive-thru with orders placed online or through the app. It may not work. Companies may call it a bug, hick-up, or connection issue, but the bottom line is, so pervasive in the corporate world, that it does not work.
Yes, but, Venes (the person behind these words, a writer and video maker, tends to write about McDonald’s), what about Mcdonald’s? Once in the drive-thru, you can always order your meal, even if there is an issue with the app, right? Should not be a big deal? Because that is how it always worked. This is where we would enter the domain of those silo workers, entrenched in corporate culture, not ready to move with the world.
DYSFUNCTIONS OF A COMPANY: THE DISTANCE BETWEEN THE CONSUMER AND PRODUCT
While in this case, at the McDonald’s drive-thru, the distance between the consumer and the product is very short, in many cases it may be a bug on a website affecting consumers, and the distance may be bigger, requiring customers to make a call and seek an explanation. Let’s say a website does not load and there are 60,000 consumers affected. It definitely happened. That is a lot of people calling your company, destroying your phone lines, and the backup argument: “Well, they can just call us, we’ve done it before.” With volumes of consumers using online services and having expectations of everything working properly, there is very little space for old lines of thinking that, yes, it may work.
With internal communication departments being overwhelmed and unable to cover all the changes around the company, it is not unusual for companies to start falling apart internally first. With so many departments trying to adapt and change, the overall strategy of sharing information also falls apart. You just cannot explain Twitter or the Internet, it has to be experienced. While people were able to learn more about the Internet by using Facebook, there is just far more that needs to be covered and consumed. And with no new experience in place, things fall apart.
THINGS FALL APART
Chinua Achebe’s Things Fall Apart was published in the 50’s when most of today’s corporate leaders were born. In its narrative, Achebe went over similar structure deconstruction. The whole society was affected and forced to deal with external influences. Traditions established generations ago were about to be abandoned.
Many companies, in a desperate attempt to prevent deconstruction, find change inevitable. They look for ways to make it work to their advantage. The execution part of it is where they fail. Yes, they can try to innovate when everyone around them is innovating but internally is where they are unable to get over traditions established generations ago. Internal communications boards get filled with representatives looking for clarification and guides on the newest products, and that information is missing, like doughnuts at the doughnut shop around noon, and On The Border Salsa Con Queso at Kroger. Basically, the companies are both disrupting and trolling themselves internally.
It is not just your local stores losing money due to a lack of communication between devices and humans. It is not just the contractor failing to deliver exactly four jars of On The Border Salsa Con Queso to local Kroger. The communication divide between companies and consumers is getting wider and wider. Wider than the distance between the speaker and your car in McDonald’s drive-thru. More options are being added to phone trees, but fewer people are there to answer them. The lack of basic understanding of services by own employees makes companies extremely vulnerable.
DYSFUNCTIONS OF A COMPANY: WRONG TRAINING, WRONG DATA
The company I worked for was so proud of their next product: 5 gigabytes of storage for your personal documents, with the ability to share documents across a limited number of devices. Definitely an unfinished product. Zero support. There was a presentation about the product. The representative explaining the product was, clearly, not understanding it, none of it.
He proudly lifted up his arm, extended all five fingers on his hand, pointed them towards the audience, and proudly said that service offered “five MEGABYTES of space!” Really, five megabytes of space? So exciting. Those minor differences between Mega and Giga? Not a big deal. That representative will later walk around the company asking “Hey, how does this [expletive] thing work?” He will swear like Violet, Klaus, and Sunny in the middle of Kroger out of On The Border Salsa Con Queso.
THE SCALE PART
More than anything, a point in defense of corporate thinking, companies will approach anything from the scale point of view. It is like the ultimate line of defense, the bottom line like no other, so pervasive in the corporate world. Someone has to sign off on it, put a name on a piece of paper, and fax it (yes, I know, corporate). After that, they hope for the best and claim “Yes, we can do it”. The fear of responsibility is so pervasive in the corporate world. Pushed from the very top to the bottom of the chain, makes managers rethink everything.
For example, a basic supply of utensils for all kitchen areas on a corporate campus becomes a gruesome dilemma. Should we provide paper plates, plastic forks, spoons, and knives to our 6,000 employees on campus?That’s 6,000 plates and plasticware for beloved employees, per day, roughly. Whenever the management provides leftovers, should the employees be allowed to have paper plates and utensils so they can eat leftovers with some dignity? Well, do employees and their work experience matter to you? If you say no, what kind of message will it send to the employees? Should they care about engaging with customers now? Five MEGABYTES, yo!
DYSFUNCTIONS OF A COMPANY: COMMUNICATION EDUCATION
It would be easy to state that these were just communication issues. The issues were resolved by quarterly computer-delivered mandatory training. Or by building an app that explains things. However, the issue is much deeper, related to user experience for both customers and employees. Pushing a product out is not enough. It needs to come with built-in infrastructure and the ability to clearly communicate to all. Advertising is, believe it or not, always focused on communication. User experience is a must. Advertising tested the Five Whys (five MEGABYTES of space!) a long time ago. Basic, like a doughnut reduced to flour, sugar, and fat.
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