brains for business

Outsourcing quality

 

At the end of the day, quality is about meeting customer expectations for a specific product, service or experience. For foodstuffs, quality might be all about taste and freshness. For furniture, comfort and durability. And for vehicles, quality boils down to safety. Regardless of new technologies that add driver convenience (i.e., GPS, Bluetooth, satellite radio) or how comfortable the ride, none of these things really matter if you can't survive a crash.

By now Toyota Motor Corporation's quality problems - as in the safety kind - are infamous. With more than eight million vehicles recalled worldwide for a spate of quality issues, the auto maker has confessed to a series of lapses as it galloped towards its pursuit to become the world's number one vehicle manufacturer. In a newly announced strategy, the auto giant will take longer to test new models before they go to market and plans to reduce the number of outside engineers it uses to design its vehicles.

Toyota isn't the first or only company to clamp down on outside parties as a way to regain control over quality.

It's (still) the customer, stupid: part 2

 

[For some reason our June issue of clue did not publish; here it is, albeit a little late...]

A few months ago we wrote about the appalling erosion of customer service, exacerbated by the recession and a relentless drive to curb costs. For most organizations the largest cost is people, and when a company's labor force is trimmed to the bone there is no amount of technology or cleverness than can make up for what qualified human beings can deliver. Just ask anyone who has ever been stuck in IVR (Interactive Voice Response) hell.

There might be a glimmer of hope. 

The illusion of market leadership

 

Unless you're an oenophile, chances are you don't think or care a whole lot about how your wine bottle is corked. Natural cork has dominated the market since the 1600s and the industry provides a cautionary tale to any market sector - or particular company - that takes its dominance for granted.

The trouble with China

 

Search giant Google's very public spats with Chinese authorities over suspicions of email hacking and internet censorship are only two recent examples of challenges faced by Western companies working with and in China. Google, whose own code of conduct is prefaced by "don't be evil," decided it could no longer abide by an agreement to censor the Chinese version of its eponymous search engine. Its decision sets the stage for a much-watched showdown between a global consumer giant and a nation poised to become the second largest consumer market in the world by 2015, after the U.S. 

GDP HAPPINESS QUOTIENT

The French government has decided that the usual measures of a country's Gross Domestic Product (GDP) are lacking. Now - and for the first time - happiness will be a component of the GDP calculus, along with access to health care, well-being and leisure time. No doubt the latter will boost GDP figures; the French enjoy some of the most generous time-off policies on the Continent. Employers are required to provide 30 days of paid vacation, and this doesn't include time off for national and religious holidays.

A spate of suicides at France Telecom has provided momentum for the happiness requirement, even as the suicide rate among its employees is consistent with the society as a whole. Perhaps learning from American politicians who see opportunity in crisis, union officials have seized on the suicides as a call to action. They accuse the telecom giant of a ruthless business culture that's responsible for people calling it quits, literally and figuratively. 

Imagine if every employee who is distraught over a new job assignment, relocation or other perceived slight could air his or her grievance in court - under threat of suicide. One deputy prosecutor has already asked a French judge to rule whether France Telecom could be tried for manslaughter in the case of a recent employee suicide. But with national unemployment in France at 9.6%, just a tick under that in the U.S., you would think that employees who are able to keep their jobs - even if required to make necessary changes for the good of the business - would be leaping for joy, not leaping off buildings.

Leadership dilemma: layoff or lay low

 

Recently the Wall Street Journal reviewed a book about Lincoln Electric, a 115-year old company with a stanch no-layoffs policy. In it was raised the specter that corporate America's near addiction to layoffs is a symptom of poor corporate leadership, holding up Lincoln Electric's spectacular success in the face of what is nowadays a decidedly minority policy.

Apparently the company's stated mission is more than mere words; using phrases like "unwavering commitment to our employees" and "a relentless drive to maximize shareholder value," Lincoln Electric makes abundantly clear that it's not in the corporate welfare business. Rather, it sees a competent, engaged and loyal workforce as an essential driver of good business.

Is strategy dead?

 

Recently, a senior executive at a major management consultancy declared that strategy, as known and practiced in much of corporate America, is "dead." Companies as diverse as Office Depot, Spartan Motors, Whirlpool and J.C. Penney have all but abandoned their previous strategic planning practices in favor of approaches that they say are not only more dynamic, but have led to real business improvement. It's hard to argue with success.

It's (still) the customer, stupid

Amazon. Lexus. Nordstrom. The Ritz Carlton. These are just a few companies routinely lauded for the quality and consistency of their customer service. Unfortunately for most others, service was just one of many things they jettisoned in 2009 in a spate of manic cost cutting.

Keeping it real

 

The recession that started two years ago has decimated companies large and small, forcing many to radically rethink how they go to market. A potent cycle of creative destruction is reshaping not just businesses, but entire industries, and in its wake altering dramatically and perhaps permanently the habits of the American consumer.

Who will blink first?

In the world according to Federal Reserve Chairman Ben Bernanke, the recession has officially ended, but don't tell that to the American consumer. Long the bedrock of the U.S. economy, today's once consummate shopper is savaged by high personal debt, under- or unemployment and - if currently with a job - the fear of losing it.