Aussie & Kiwi Chronicles - Part 5

Can High Cost Countries Afford Bad Management?

By Pascal Dennis

In my earlier blogs I wrote about my misadventures with Qantas.

A major national airline, indifferent to its customers, wracked by poisonous labor relations, the butt of cynical jokes at home.

Which raises another question:

Can Australia, a high-cost country overly dependent on mineral wealth & capricious mineral markets, afford bad management?

Much enjoyed exploring such questions with my Aussie mates, while sampling splendid wine.

Australia, they told me, is terribly vulnerable to bad management, and to bozo unions & nitwit politicians.

In good times, high mineral prices mask these debilitating weaknesses, which tend to fester.

When mineral prices collapse, as they always do, the economy follows.

A high cost economy cannot afford bad management. Resource wealth is only a temporary buffer, and might even be a curse.

High cost countries that lack natural resources - such as Denmark, Switzerland, Germany, Sweden, and even Japan - seem much more resilient.

Bad managers, bozo unions and nitwit politicians seem to have shorter half-lives in such countries.

(Japan may be an exception, at least with respect to the latter...)

My Danish colleagues tell me, "We realize we are small, unimportant, and vulnerable. We learn to become self-reliant, and to get along."

Or, as my Aikido sensei used to say, "The knife is sharpened on the stone, Pascal-san..."

Cheers

Aussie & Kiwi Adventures, Part 2

By Pascal Dennis

Thanks for your feedback to the question I posed last time:

How can Qantas, a major company in a highly competitive market, be so indifferent to the customer?

You'll recall that, among other failures, Qantas lost my bags - both going & coming home! And provided no easy means of providing feedback or seeking recourse!

Here are some common themes in your responses:

"Qantas doesn't care because they're an oligopoly in Australia."

"Qantas knows the government (i.e. the Australian tax payer) will always bail them out!"

"Service levels, in general, are substantially lower in Australia than in other countries. Knowing no better & having no alternative, Australians think Qantas behavior is normal."

I defer to our readers' insights, and especially, those of our Australian colleagues. If true, these comments provide important lessons for policy makers.

• In the absence of competition, the customer, and the concept of Value, will be forgotten. Waste will increase exponentially


• Accept oligopolies only as a last resort, therefore. Seek to foster competition so that the customer is not forgotten.


• If your market is small & can only sustain a very small number of companies, compel the company to provide, through legislation if need be, hassle-free recourse for customers.

What kinds of waste did I experience dealing with Qantas?

Transportation, Delay, Motion, Over-processing, Defects...

Qantas also experienced these forms of waste, as well as, Work-In-Process (my lost luggage - and me!), and Knowledge.

For Qantas, the latter waste is the worst of all. By scorning customer feedback, they'll never improve.

This is what happens when the Customer is forgotten.

So, for Lean thinkers, the most important questions remains: WHO IS YOUR CUSTOMER?

Best,

Pascal

Aussie & Kiwi Adventures, Part 1

By Pascal Dennis

Just returned from three weeks in Oceania.

Splendid adventures in a beautiful part of the world - a business nomad's delight.

My Aussie & Kiwi colleagues were gracious, kind & understandably proud of their countries.

(Special thanks to my mates Matt Wall of Boeing Australia, and Mike Butler of Fonterra NZ. I hope I can reciprocate when you visit North America!)

Forgive me for leading off with the only negative part of my journey - another unhappy adventure in international air travel.

But there may be some useful lessons.

Qantas, Australia's national airline, managed to lose my bags - both going & coming home!

Other hassles too, which I'll not bother describing, and all on a business class ticket!

When I went to the Qantas home page to share my story - feedback which top-shelf companies would consider invaluable - I found it was impossible to do so.

Qantas makes it very difficult for customers to provide feedback (!?)

A few minutes of web research confirmed that many other travellers have had a similar experience - with no recourse.

Qantas' message appears to be, "Who cares?"

My misadventures surprised neither my Oceania colleagues, nor the various Lost Baggage attendees I spoke with.

"Qantas is the worst..." and "At least they're consistent!" were common refrains.

My Aussie chums questioned the capability of Qantas' CEO & management.

Labor relations are so bad that Qantas grounded its entire fleet in 2011 and early 2012!

How can a major company in a highly competitive market be so indifferent to the customer?

I welcome feedback, especially, that of our Oceania colleagues.

For my part, I was struck by the painfully obvious absence of:

1. Standardized work, and
2. Embedded OK/Not OK tests

At every Lost Baggage desk, Qantas staff seemed unsure of what to do - in the face of a common defect!

Nor did there appear to be easy ways of confirming a Good/No Good condition.

And thereby hangs a tale of importance for Australia's future.

More next time.

Pascal