Taking a few steps back now, what have we learned from this first look at the consequences of the customer’s victory for organizations? First and foremost that an appeal is being made to the organization itself and not just a few of its members (the marketing division or the front office). It is not enough to send a few good soldiers off to the front lines to face head-on the ever-increasing demands of customers. Bravery and loyalty are quickly spent if the organization does not follow, or if the soldier deserts to join the army of consumers: this is a classic mechanism which has been with us for some time now.14Whenever members of an organization are in contact with the environment and the organization does not allow them to satisfy that environment, they then become its representatives, its lobbyists at the heart of their own company or administrative structure, which they will then criticize even more vehe- mently than the customers themselves, proving in this way how flexible they are when faced with a sclerotic bureaucratic body, insensitive as it is to the expectations of the general public. In this relationship, these members “sell” themselves against their own organization. For a long time it was believed that this model worked only for administrative structures, especially those in France, but today, in fact, we see that it is spreading as a result of the pressure which customers are exerting on organizations in the competitive sector, organizations which do not understand what it is they are being asked to do. Further on in this book, we will re-encounter this problem in the air transportation indus- try, as well as in banking and insurance.
Furthermore, organizations differ in the way in which they manage problems, for they are not all equal in their ability to confront them.
This observation is central to this book. However they might deal with these problems, we might add, there is always a human cost which companies are more or less able to reabsorb. Although we have yet to discuss the profound nature of this cost, its presence is a sure sign that The Customer’s Victory 37
the worlds which are being rebuilt around the customers, attempting to meet their needs, are de factomore uncomfortable than those which were in place when customers were of relatively little concern, or when solutions were sought in ways other than a major organizational change. This is not a disinterested observation: it brings up the issue of opposition to change, not as a psychological problem – that would be a natural, “cultural” tendency of individuals to resist change – but as a practical and very concrete behaviour, calculated in terms of the cost-benefit relationship. The “less” we are involved, at least in the transitional phase which we see today, is also a “less” in terms of advan- tages, comfort and possibilities to live in a world where there is much pressure.
When this idea is taken a little further – less comfort in the most general sense of the term – we begin to see just how important the man- agement of human resources is in an organization’s struggle to adapt to the customer’s victory.
First, since the environment is increasingly hostile, if the company does not want to settle for “squeezing the lemon” and then throwing out the rind, it must manage careers as a function of this new deal. If not, the human cost becomes quite considerable, and even if the cynicism of those involved – and we know how corrosive that can be for organizations – allows them to accept this human cost, it will in time have serious repercussions on the business itself, whose members experience the company exclusively in a utilitarian mode. There are many today who are quick to point out the dangers of such a relation- ship: Robert Waterman’s advice to “put your people first” is by no means at odds with customer satisfaction, it is rather one of the conditions for it.15This is echoed by the words of a particular human resource direc- tor, who, at a meeting with his company’s board of divisional directors, compared the work environment to a sporting event between profes- sional athletes under constant pressure, who must, by definition, be even better during an actual event than in training. One participant in this meeting asked the human resource director for how long one might expect to remain a top-level athlete, and what one would be expected to do later on in the company.
The second major aspect of human resource management concerns the criteria for the management of individuals – how they are evaluated, promoted, remunerated, and so on. These become, as in the case of the British catering company, keys to behaviour modification, and it is always surprising to note just how many businesses have still not
bridged the gap between their overall corporate strategy in the matter and their ability to generate business and serve their customers. Make no mistake: this is not meant as a throwback to the old Taylorian obser- vation that individuals at work are motivated exclusively by monetary con- cerns. There are many other things which can be offered to make the new constraints more acceptable. The catering company was a good illustration that the actors’ autonomy, when properly regulated by the organization – here by profitability and the number of meals served – can be a powerful lever in getting the company to meet the needs of the customer.
One might object that it is precisely this quest for unbridled auton- omy which keeps public bureaucracies from learning anything new.
This is true, but those bureaucracies are characterized by a large gap between how careers, salaries, and so on, are administered, on the one hand, and the business outcome, on the other. Hence there is no com- pensation for autonomy here. It is not a constructive term of exchange at the heart of the leader–customer representative–customer trilogy.16 We have finally begun to glimpse the problem of the “fuzziness” of cer- tain organizations, an aspect which it is not worth contrasting with clar- ity, in which there seems to be no special virtue, but with monopolies instead. This explains our hesitation to follow the pundits of re-engi- neering in their passion for processes. Of course, on careful reading, they themselves reveal this hesitation. Hammer and Champy write:
The fourth key word in our definition – of reengineering – is “process”.
It is also the most important word, the one which presents the most serious problems for company directors … An operational process is a series of activities which, based on one or several entries (inputs), pro- duces a result (output) representing some value for the customer.17 Two hundred pages later, the authors back off from this, enumerating the errors which lie in wait for a re-engineering programme: “[one of the errors] is to look only at the processes, to not take into account the new systems of evaluation, the redefinition of hierarchical powers, the transformation of the relationships with personnel”.18 In fact, behind processes, even with the slightly different meaning offered here, there is cooperation between the actors, which escapes precise definition, which is an unstable equilibrium, a policy within the organization itself.
Cooperation cannot be decreed, nor can it be codified into a set of rules and procedures which would form “the layman’s guide to the appropri- ate method of cooperation between members of the association”.
The Customer’s Victory 39
Conversely, it assumes that once a favourable environment has been created (through personnel management, or exchanges in autonomy, for example), the organization will agree to go no further in defining itself, nor even in attempting to understand its own mechanisms. Now we understand why these fuzzy organizations very rarely accept that their “culture” should be rendered explicit. They fear the reification of that which must remain implicit. And they know just what they are doing.
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3
What is a Bureaucracy?
To take an interest in bureaucracy is not to look back at the past, but towards the future. The central hypothesis of this book is that the end of bureaucracies, as they will be defined in a few moments, is the num- ber one hell to face in the transformation of companies and organiza- tions in coming years. It is no secret: there is not one management textbook or analysis of world trends that is not keenly interested in the end of bureaucracies, regardless of the author’s point of view: “Today in the realm of organizations we see and suffer from cumbersome bureau- cracies which, more than ever, are signs of the poor management of meaning.”1 To which Waterman adds a more precise definition: “The problem is as follows: the bureaucracy, our most traditional form of organization, was created to manage the day-to-day problems of organ- izations: the sales department sells, manufacturing manufactures, and so on. So long as economic activity does not change too quickly, bureaucracies get along fairly well. But things are changing quickly.”2So why has this disjointed, compartmentalized mode of functioning taken the upper hand over other forms of organization? Robert Reich explains it as follows, based on the American situation:
American bureaucratic companies were organized around the model of military bureaucracies for the efficient deployment of plans devel- oped well in advance. It is perhaps not by chance that war veterans who entered the major American companies in the 1950s very naturally re-created at the centre of these companies the military model of a bureaucracy. They were set up along the lines of a military hier- archy, with chains of command, control methods, rank, divisions with division leaders, and procedures outlining the decision-making process. If you have a question, check the manual!3
After presenting Reich’s thesis, Rifkin adds: “The managerial system of business organization is a giant oaf, a powerful producer capable of creating sizable quantities of standardized commodities, but lacking the flexibility to make nimble adjustments so as to adapt to rapid fluctua- tions in domestic or global markets.”4