Mad Management: Industry Revival needs demanding customers and great management

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The best friend of an organisation is a discerning customer.

By discerning I mean customers who will not accept products or services unfit for purpose. The downfall of UK manufacturing was, in my judgment, aided by the British customers who, when I first arrived here from Africa in the early 1970s, were paying for mediocre food and attention in cafes, unreliable cars and motorbikes, and dismissive service in most shops and trains. And no-one complained to the companies, although they did to their friends and the papers!

I remember watching customers in some of the large department stores wandering around with arms full of dresses or shirts looking for the cashier

Then came the Japanese. Drivers were amazed when their cars started first time, every time, and never broke down. They were even more amazed by the silent running of the Japanese luxury cars. Motorcyclists were delighted with starter buttons on their Hondas and Yamahas. Many of us riders still bear scars on our calves from kickstarting and then getting a kick back from the lever that seemed to be designed solely to inflict maximum damage to your leg. The British (and USA) motor industry never stood a chance, more of which later.

Our shops then seem to be designed just to display goods, not for customer service. I remember watching customers in some of the large department stores wandering around with arms full of dresses or shirts looking for the cashier. Cashpoints seemed be as elusive as red squirrels in Windsor Great Park. Service was often brusque and, at times, rude. I remember some M&S employees telling me that when some of them were bored they would deliberately step on a customer’s foot and chuckle silently when the customer apologised. This reflected their view of the importance of the customer.

The best organisation is one that is understood and managed as a system, the aim of which is customer satisfaction. Could you run a successful company if that was not your aim? The answer is not for long, unless you are an energy or mining company or the like, where neither the price or the demand is determined by your performance. (The users, however, may have to pay a high price for a mediocre service, as we have seen in our gas and electricity industries.)

If the goal is to meet the users’ real need then, firstly you need to establish what that is and secondly, design the best processes to deliver to it. And you need to demand feedback on how you are doing because the British method of giving feedback is usually “walking away and not coming back”. In fact, to this day we are still bad at it. A good example is the annual nightmare for both manager and subordinate called the yearly appraisal, usually an embarrassing fudge and probably about nine months too late anyway if there really is a problem. By default, therefore, British customers have colluded in the downfall of much our industry, but nowhere as much as the leaders!

We need therefore to solicit feedback, hence the growth of customer focus groups and conference feedback forms etc. I recall getting some really useful feedback from an InterCity (remember this great railway company?) business customer focus group. It took the typical English route which began as, “Well, if you really want to know”, followed by low key mutterings of frustration culminating in an explosion of rage. The cause? We had put together a small group of season ticket holders who discovered that all the incentives on offer were there to attract new passengers, not to reward loyalty.

And, of course, this induced the deployment of another key skill in the improvement cycle – receiving feedback positively. This took the form of a grovelling apology from the marketing director and effusive thanks for pointing this out, and then the master stroke: “What kinds of incentives would have genuine value?” They did not know, so it was agreed that InterCity would pass a few ideas by them and see which had the most value. That was enough.

Back to UK manufacturing management: did they solicit feedback from the customers? Not really. It seemed the strategy was to bludgeon potential customers into submission with marketing campaigns that always seem to demand that they “Buy British”. To complain might be unpatriotic? But there were people they should really have listened to: their workforce. There were middle managers and engineers as well as shop floor workers who knew that quality had to be improved and demonstrated it. They were ignored.

It is said that when the engineering offices in the empty Triumph and BSA factories were cleared out they found engineering drawings of motorbikes that were just as innovative as the Japanese, which management turned down because of the re-tooling costs inter alia. Thus did the industry drop from a USA market share of 60% for big bikes in 1968 to 6% in 1974, while Honda climbed from 24% to 54%. This was a trend across the manufacturing piece.

Good news though - John Bloor, the visionary Derbyshire entrepreneur, has revived Triumph as a global triumph; an effective management system, terrific bikes, profitable company. The employees are valued as “the heartbeat” of the company. It shows.

Britain has always had great engineers. If only they had had the leadership to match! James Dyson is a good example of both. When they do match, we are world class. What were our former captains of industry good at? Cutting costs, paying dividends, especially to themselves, and catalysing a confrontational labour culture. Sounds exactly what Jeremy Hunt is doing today to ruin the NHS.