How often to we hear that one part of an organisation will not allow another part to deliver a service because the policies and procedures get in the way of common sense?
He is a local example of what happens in practice.
I have been talking to a motorcycle dealer recently about the option to change my bike.
Now the sale team have been really good at giving me access to ride the bikes that I wanted at a time that suited me. They have fed me coffee, and spent time trying to understand my needs.
Despite their best endeavours the dreaded computer systems managed to get in their way at regular intervals. I have been asked for me address, and email address on a number of occasions, by the same two people for different computer systems!
In conversation the other day I found out that because this particular branch of the dealership is too successful they register some sales via their other dealerships. You will never guess why – because the supplier sets the dealers targets on an annual basis to sell units.
If they appear too successful then the supplier increases the targets to the point that the dealership begins to lose revenue! so, the dodge is to register units at different dealerships to disguise the success on one branch.
This makes good business sense for the dealer who is bound by the stupid rules of the supplier, who doubtless thinks that it is being clever.
The rub for the dealer in question is that this means that they have to travel backwards and forwards up and down the motorway to register vehicles at different locations to bend the rules set by the supplier.
Step back and hopefully you can see the madness in this target. The waste and additional cost that is incurred by the dealer to bend the rules to maximise the income from the supplier and manage the outcome performance at the year-end. Not to mention the impact upon the customer!
This is sadly not unusual in businesses, who for reasons best known to themselves put in place silly rules and procedures in an effort to control the market place.
In reality of course the same number of units is sold in the market place what ever the supplier decides, but because the rules the dealer has to manipulate the data to make the system work.
So that’s seems pretty normal, but then the stupidity really starts. I have received a great service from the guys at the front line trying to sell me a bike, they have done what they can to help me make an informed choice about a replacement bike.
All is going well, until I receive a call from my nice sales guy to tell me that I must pay a bit more cash over as a deposit because ‘ the workshop aren’t very busy today and want to work on preparing my new bike’ sounds good I thought, but then the bombshell.
The workshop won’t start the work until I have topped up my deposit to cover their costs!!
Guess what the sales team don’t run the business the workshop does! Now in truth it’s not the fault of the workshop manager. It’s his boss.
You see even though this is a small dealership they have very clear lines of demarcation. Functional specialisation on steroids.
They clearly have separate profit centres. If the workshop do work for sales and it does not follow through to a sale then the workshop loses out financially.
So the system quickly begins to breakdown from a customer perspective. What starts life as great customer service ends up as a trade-off between sales and the workshop and guess what – the customer loses out big time.
Now it does not have to be this way. It’s a relatively small business, it has two locations. The systems in place plausibly look like they are adding value to the business, but in truth they all run around with bits of paper and talk to one another all the time, so what’s the need for a CRM style system.
Functionalisation is driving cost in to the organisation. I know from the relationship that I have built up that the margin on the sale is not huge, so why burn profit undertaking bureaucratic nonsense that makes life worse for the customer.
And as for the supplier of the product – well it is a great product, but its relationship with its dealerships is based purely on number of units, and yet its philosophy seems intended to be more customer centric. The lesson here is about the unintended consequences of targets against longer term vision.
In the end I take delivery of a vehicle that does not have all of its accessories fitted. Some did not turn up in time, other bits are still awaiting for collection at the other franchise.
I need to spent time at some point going back for rework. In effect lost time and effort for the workshop who did not get it right first time, because the parts did not arrive at the right time.
Great product, with enthusiastic people trying to do the right thing within a system that makes it difficult to get it right first time: can the leaders spot the room for improvement I wonder?
Do you see parallels in your own organisation?
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