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Home » Business And Finance Articles » Blame Management For Poor Service

Blame Management for Poor Service

Buried in the publicity of a nasty airline strike was a vivid example of how misdirected management's service improvement efforts can become. To improve service, the airline ordered all attendants to attend three hour "Commitment to Courtesy" classes without pay. "They told us the reason we were losing money was because we were rude to passengers," said one attendant.

How reasonable would it be to hold a shipping dock worker responsible for the quality of the goods in the boxes he or she is shipping? Not only would that be unfair, it would be bad management. A good manager would argue, quite rightly, that the manufacturing process should be traced back to find the ultimate source of the defects.

So how reasonable is it for managers to hold the final deliverer responsible for the quality of the products or services he or she is delivering? The person on the front serving line is a symptom carrier, not the source of the problem. While he or she may be contributing to low service delivery, blaming him or her is not only unfair, it's unproductive.

The basic problem is that people are visible, but the systems and organization culture by which group and individual behavior is shaped are largely invisible. So when something goes wrong, it's easy to trace the problem back to whoever touched it last and lay the blame there.

If you put a good person into a bad system the system will win. This has been proven so often that it has become a truism in the quality improvement field called the "85/15 Rule". The 85/15 Rule shows that if you trace errors or service complaints back to the root cause, about 85% of the time the fault lays in the system, processes, structure, or practices of the organization. Only about 15% of the ricochets can be traced back to someone who didn't care or wasn't conscientious enough.

I've seethed in the seats of all too many airport gates waiting for a late aircraft, or scrambling to find an alternate way home. Having a flight attendant then give me a bag of peanuts and a big courteous smile doesn't turn me into a satisfied customer. I often feel sorry for the attendants (and the harried gate agents) while plotting my revenge for the faceless bureaucrats and managers that can't get the organization's act together.

Frontline servers often provide delightful service in spite of, not because of, their organization's support and systems. Given the many obstacles, it's a minor miracle that service is being provided at all by some exceptionally caring employees!

Many manifestations of the "our workforce is to blame" assumption stem from the all too common, but badly misguided, inclination to begin error "seek and destroy missions" by asking "who" rather than "what" went wrong. Symptom carriers of the organization's system and process problems are hunted down and hung by the neck. The result is a culture of fixing the blame rather than the problem. A culture of fear, cover your backside, and finger pointing.

If senior management truly wants to find the source of their organization's declining service levels, the best place to start is with a long and deep look in the mirror.

And here is another random article you might be interested in...

The Allure of Dividend

Investors wanting to pick undervalued stocks need to look closely at dividend. For one thing, dividend drops money straight into your pocket. Your stock price do not have to rise to make profits. Another thing is that only company that have extra cash will give dividends. This requires them to be highly profitable. Investing in profitable companies will breed success if investors buy them at the right price. Finally, once initiated, management will fight its best not to abolish its dividend. Case in point was Schering Plough Corp. (SGP). It spotted $ 0.22 dividend per share while it hasn't been profitable in 2003.

One final allure is the possibility of capital appreciation. A lot of times, companies with a high dividend yield, has a lower valuation than others. For example, some companies are offering a dividend yield as high as 6%, which is higher than the yield of treasury bond. One such company is Flagstar Bancorp (FBC) with 6.1% dividend yield. The common stock gives $ 1 in dividend, while its earning per share is predicted to be $ 1.70 in 2005. Earning was as high as $ 4.00 per share in 2003. Assume that FBC can earn $ 1.70 per share forever, then its share price can rise to above current price of $ 16.50.

Having said that, investors should be careful of dividend trap. Some companies may cut future dividend due to deteriorating condition of their financials. That is why it is extremely crucial to predict the fair value of the common stock before investing in them. Dividend is just part of the equation. Case in point was the former AT & T Corp. (formerly traded with symbol T). It used to be valued north of $ 100 Billion and was giving out decent dividend. Now, it has fallen to less than $ 20 Billion, while the dividend too has been cut.

Here are several dividend payers that might spike your interest:

SBC, Bellsouth and Verizon Communications. They are all in the telecommunication sectors and offer dividend yield of 4.4 to 5.4%. Stock price has been going nowhere for the past year due to investor skepticism of competitors undermining their dominance in the telecommunication market.

Pfizer, Bristol Myers Squibb and Merck. The pharmaceutical sector has been battered in recent years. Merck's legal problem with Vioxx also creates negative sentiment towards the sector. These three companies have a dividend yield of between 3 to 5.6%.

Bank of America, Citicorp and Washington Mutual. The banking sectors have been known to give generous dividends. Currently, they are all have a dividend yield of between 3.90% and 4.8%. But with the federal reserve still in tightening mode, I feel that bank stocks can be bought at an even cheaper price sometime in the future.