Chris Johns
Why nothing works any more
In one of our more popular podcasts (in terms of downloads), Jim and I recently discussed why so much of daily life is so difficult. ‘Nothing works any more’. We are all subject to ‘time taxes’. The sitting in traffic, hanging on the phone listening to a robot telling us ‘your call is important to us’, lining up at airports, sitting on planes that don’t go anywhere for hours for no obvious reason. The horror we feel if we need something from our bank, phone company, gas or electricity utility: finding the hours that we know it will take if we have to phone any of these companies.
Queues everywhere for healthcare - even those that use the private sector in the U.K. are often told their money will shorten the wait but in no way eliminate it. The way so many public and private sector institutions fail basic tests of competency. Infrastructure - broadly defined - is no longer fit for purpose.
Honourable exceptions do exist. The staff at my local Tesco superstore provide excellent service with smiles and (I think) unfeigned friendly chats. By contrast a recent visit to a French supermarket saw ‘help wanted’ signs all over the place and massive queues at the few checkouts in operation.
Try phoning British Airways with a query: you will lose the will to live. Try making an insurance claim. Figuring out mobile phone roaming charges if you are a Brexited U.K. visitor to Europe is like grappling with the mathematics of quantum mechanics.
As a Brit, I departed Nice airport the other day and the passport officer barely looked at my passport and didn’t stamp it with my leaving date. The French authorities will now think I have exceeded my 90 day limit and could sanction me accordingly. Recently I had to close my Irish Revolut account and open a new U.K. one - supplying all the usual passport, DNA and semen samples that they already possess (not Revolut’s fault of course, just regulatory nuttiness). I need to change my driving licence: contacting the DVLA will involve visiting the many circles of hell. I dread the approach of 2027 when I will have to renew my passport.
So many businesses have adopted the practices of airports. They operate on the principle that life would be so much better if only they didn’t have customers. We all marvel at the glitzy shopping centres that reluctantly offer basic facilities for getting on and off aeroplanes. Businesses that have completely forgotten their core function. And consequently utterly neglect it.
Norman Tebbit (a senior minister in Margaret Thatcher’s cabinet) once famously complained at about not being able to get anyone to fix his garden gate. He must marvel today at the universal lack of skilled trades people. Or relatively unskilled workers. Try getting any competent work done on your house - at all or at a reasonable price.
Technology has no doubt wrought great benefits. But when it doesn’t work it just adds to the complexity. Nothing can be repaired unless you have had decades of training in sophisticated computer systems. Just try opening the bonnet of your car and see if you recognise any of the components. Please don’t attempt an at-home car service.
It might (fairly) be argued that these are all first world problems. People on benefits have to undergo tortuous and Byzantine rules and regulations, bureaucracy and paperwork before not getting what they need and deserve. I’m not on a flight to Rwanda or (yet) been invaded by Russia. But still.
Resilience and contingency have been eliminated from the business lexicon. Nothing is just-in-case, everything is just-in-time. We’ve learned to our cost that the slightest interruption to one part of extended global supply chains causes shortages. Just-in-time management practices were all very well when risks to supply chains were low. But even with low risks, the drive to cut costs was taken too far. The system was too fragile, even prior to the Ukraine war. A revanchist Russia has elevated risk for the foreseeable future and has rendered much business practice utterly redundant.
It’s not just about supply chains. Cost cutting became the single most important criterion for managerial advancement. Short-term management practices have many drivers. The tenure of too many c-suite executives is woefully short. A CEO knows he has to get results quickly; she is in a race to amass as much of a rise in the share price as possible and to cash in those share options before the sack. The stock market itself is partly to blame: the average holding time of investors has shrunk to seconds (really). Cash generation is king and investment - capex in the jargon - is a dirty word as it consumes precious cash for uncertain rewards at an unknown date, often far in the future.
Cost cutting is fine but you can always have too much of a good thing. Trimming organisational fat is generally a good idea but it does eliminate spare capacity - if things go south you are in trouble. Cost cutting carried too far will cut into the muscle of an organisation, weakening it even if things do turn out ok. Cost cutting carried too far can lead to structural failures when the business comes under the slightest of pressure.
The U.K. economy is not alone in experiencing a shortage of workers. Lots of reasons are suggested but it’s a bit of a mystery. One of the biggest puzzles is the disappearance of older, 50+ workers, from the labour force. I think this is linked to cost cutting in particular and the corporate environment in general.
Working is rarely fun: congratulations if you love your job. But for many people, particularly those that have been working for a while, the relentless pressure to do more with less has become too much. With each new management initiative, always in gobbledygook to conceal the horrible message, comes a deterioration in working conditions. Even higher pay sometimes cannot compensate for corporate bullshit, for a horrible working environment. I despair at the number of times someone has ‘reached out to me to achieve amazing outcomes on a go-forward basis’.
It’s not just about older workers, often reasonably paid, who have decided that modern corporate life is just too awful. Lower paid, often younger, people have to cope with the same - often worse - working conditions. If they can, they have decided to do something else, at least for a while.
Hence the ‘help wanted’ signs all over the world. And organisations that fall over in response to the slightest headwind.
*edited to correct the earlier claim that Norman Tebbit is no more. My apologies.
Corporate BS: Why nothing works any more
Sadly accurate😢
I agree, and the effects go further.
This culture of stripping down of the cost base through similar activities described by Chris has had a deflationary pressure on prices. In my view, the deflationary effects of that culture played a role in justifying the loose monetary policy over the past decade.
Globalisation, automation, size-flation and races to the bottom with respect to quality. It effects many goods and services, but not all. For example, can we say these hit the property sector since the Great Recession? Probably not.
The basket of goods making up the inflation indices are a mixture of what has been hit by this phenomenon and what hasn’t. So in aggregate we have had deflation in some costs and inflation in others.
Lots of really cheap flights and cheap clothing to bring with you but no roof over your head when you return.