Wednesday, August 31, 2011

The Colliding of Worlds

For those that aren't aware, once upon a time, I was a partner in training for my family's corporation. Our corporation was valued at $32 million and had over 400 employees. It was so successful and profitable that it gained the interest of a large oil corporation who sought to acquire it. My father, not willing to give up his baby, refused and the end result was, essentially, the death of the business. Big oil companies apparently don't like "no" for an answer. One of the things that I was in charge of in my position was public relations. Any customer complaint filed with the Better Business Bureau ended up being handled by me. A single unhappy customer doesn't seem like much but they also tend to be the most vocal. A customer who is content with the service of a corporation is not likely to say much at all. In contrast, a customer who is disgruntled--especially if it was rightfully so--will shout as loud as they possibly can. We learned, through, experience that it was far better to handle issues with disgruntled customers quickly and efficiently. We didn't have to bend over backwards and give them the world. We just had to resolve the issue in an expedient manner to bring them back to contentment.

Because of all this, I tend to very critically examine corporation's behavior in regards to public relations. I wouldn't say that I set the bar high for what is appropriate behavior though. I have just learned through the eyes of all those former disgruntled customers that there is an unspoken standard that we, the consumers, expect when we engage in a business transaction with a corporation or even a small business. We expect some level of professionalism, mutual respect, and, most importantly, that our concerns and complaints, should they exist, are at the minimum responded to in a timely manner. If one goes to a restaurant and the waiter there is rude, abrasive and doesn't bring your food out for an hour, the general response of the customer is to lodge a complaint with the manager. The expectation at that point is at least an apology for the waiter's behavior by the manager. If they do not respond or are equally rude, then, odds are that customer will not return again.

This is how the free market works. If a company behaves badly or produces a defective product, they will lose customers and losing customers means losing money. This required standard of behavior is, therefore, found nearly across every industry. This is also the core reason of why so many large corporations have some form of corporate social responsibility program, although a lot of CSR programs tend to be mistakenly treated as public relations programs. The only organizations that seem to escape this kind of general standard of behavior, however, are those that illicit, by precise definition, fanaticism within their consumers.

Fanaticism, as previously defined, is a belief or behavior involving uncritical zeal. It is without logic or rationality and frequently, fanatics will engage in multiple cognitive biases in order to anchor their beliefs in the greatness of a corporation. Some may even react with hostility should another speak poorly of their source of fanaticism. In a recent study, MRIs found that the areas of the brain that were lit up in an Apple product fanatic were the same as those areas lit up by a religious fanatic. In a sense, fanaticism whether it be political, religious or over a corporation, is a fundamental change in the way that the brain processes information. I would hazard to say, as such, that it could even be construed as a mental illness.

The problem with fanaticism towards a corporation is that fanatics are highly vocal and highly defensive of the corporation without any critical thought. It creates a situation in which, in turn, the executive officers and their employees may also be prone to cognitive biases. Corporate fanaticism can result in corporate group think errors and wishful thinking in that their company, no matter what the mistake, can do no wrong or that they are somehow above the general standards of business behavior. What it means to you, the customer, is that you may not be treated with the according respect, promptness or perhaps even ignored entirely that you would normally expect in a business transaction or should you have a complaint. It allows for the quality of the product or service to decline as even gross errors are quickly discarded by both corporation and fanatic.

Fan boys may be good as being cheerleaders for their pet companies but, overall, they are bad for business. The reason being is that not every consumer of a product or service is a fanatic. Fanatics, despite all their vocal nature, are actually the minority. Consistent failure to produce a quality product or engage in expected business behavior may be ignored by fanatics but it is generally not ignored by the average consumer who may not feel compelled to express their dissatisfaction. A positive corporate reputation is very difficult to develop but also the most easily tarnished. Group think within an organization can quickly lead to tarnished reputations and a loss of market share.

A good example of the negative effects of group think within a corporation would be Toyota Automotive. For decades, Toyota had had the reputation of being an automotive manufacturer whose vehicles were regarded as being both high quality with high safety standards. As such, Toyota dominated the automotive manufacturing market and their competitors market share accordingly declined. Because of their excellent track record, Toyota began making changes to increase their profitability. After all, they made an excellent product. They could do no wrong. The end result put multiple customers in profound danger, which was catastrophic for Toyota as well in that they lost a large portion of that dominating market share.

Toyota is an extreme example of the problem with fanaticism and corporate group think. Not every industry is going to be putting their consumers' lives at risk should they fail to produce a quality product or service but they still can damage their consumers' lives through financial loss. In the case of Valve Corporation, we are purchasing goods that are strictly under their control. We become unwitting investors in the corporation as our access to those goods are frequently limited to Valve's continued existence. Think of how many games acquired through Steam are capable of running in offline mode or even how much money you have effectively sunk into Steam acquiring those games.

We all hope to be treated fairly by Valve Corporation even if we don't actively consider these matters but, in reality, we should be concerned when there is a consistent deficit in responding to consumer concerns. They essentially have the ability to take away access to our thousands of dollars sunk into a game. I recently had a problem with accessing money placed into a Steam wallet on another account and it took at least a month and several support tickets for Valve to fix the problem. We joke about "Valve time" when we shouldn't considering our individual investments into their service. We should instead hold them to those same expected standards that we hold for all of our other business transactions.


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