Caught
Just once, earlier this year, Uber wouldn’t accept my booking. At least not until I uploaded a photo of myself wearing a mask. The app guided me through the process, and it took less than a minute.
I was perplexed as to why.
So, when I got to my client’s offices, I mentioned this to the group I was running a strategy workshop with and one of the participants said that I was singled out, because I’d been reported for NOT wearing a mask on a prior trip.
Now, he was right — since the end of mask mandates in my state, I’ve often NOT carried one with me, and sometimes forget to wear one on public transport - and in Ubers. But an Uber driver had ‘pinged’ me and now I’m recorded somewhere as a non-compliant rider.
This is a great example, though, of what my regulatory authority clients call “risk-based regulation”: it’s where they tailor their use of enforcement based on the severity — and behavioural drivers — of non-compliance. Presumably, only a small percentage of people like me exist - and are reported — therefore it doesn’t make sense to ‘penalise’ or obstruct every rider.
I’m curious to see how long this stays in place (for me) — I predict that after three rides, if I’m compliant, I’ll be back to being treated as a normal, law-abiding citizen by Uber.
Question: How do you develop interventions that target your highest need customers only?
Recovery
The best art provokes a feeling, just as the best literature does, and one of the best novels this year for me was the disturbing but wonderful, “The Diplomat” by Chris Womersely (Disclosure: The author is a friend). I can’t reveal too much without a plot spoiler, however, I can say it’s a novel about heroin users who are also artists. Or is it about artists who are heroin users? Or perhaps just people who (occasionally) produce art, and (regularly) use heroin.
What the book is really about, though, is the path of failed potential.
But, the thought that recurred for me after finishing was this: “How bad a set of circumstances can we actually recover from?” The characters are tragic and flawed, and I won’t reveal if redemption occurs or not, but I warmed to the narrator and keenly wanted him to rise above his dilemmas and limitations.
The relevance to strategic thinking in organisations is this: we all fail, and sometimes fail badly. One of my clients, right now, is debating whether their strategy should include closure as some directors hold genuine doubts that they can elevate their services to even a competitive level, let alone one that is distinctive or unique.
Question: How do you make decisions about recovery potential when you appear to be in the deepest pit of failure?
Why can’t I be an exception?
And, at year’s end, here’s a story about the TAB. The “Terrible Aussie Bank” that is.
This bank has pretty much all of our business: my wife's and my business banking, our personal accounts, and property mortgages. A few months ago, an automated mortgage payment on an investment property didn't go through and, two weeks later, I got a letter (on paper) and a text message notifying me. I immediately called and by the end of the day the payment had been made.
I then started receiving a series of letters demanding full payout of the mortgage owing to 'arrears' on payments. Then the bank's lawyer’s letters started, similarly demanding fully paying out the mortgage. With two weeks deadline to pay. Complaints to our 'relationship manager' about this heavy-handedness were met with "I didn't know about this".
They backed off, and apologised (verbally) but, as it happens, we then wanted to buy a further property and the Terrible Aussie Bank said that we are a bad credit risk because of 'late payments'. They wouldn’t reverse the blemish on our credit record, they say, so they wouldn’t lend us money.
This is a case of automated policy acting against business success. We were flagged as a ‘false positive’ in their system and nobody appears to be empowered to reverse this.
Time to switch banks (again).
Update (DEC 2022): I wrote directly to the CEO of the TAB. To my surprise, I got a response. Within hours. Personally written. I’m in no doubt it’s not him writing it, but the letter served to escalate the issue, get a human (with a name and a phone number) to deal with it, and after a week or two, all was resolved. Still. Shouldn’t have happened in the first place.
Question: How can you build a system that makes exceptions to policy that recognises customers who are good for your business overall but might mis-step occasionally?
I’m on holiday until late January, so the above is a ‘summer edition’ of past 5 Minute Strategic Mindset segments that have been popular with readers. I look forward to being back with you shortly, however, if you’ve enjoyed reading, please click the ‘heart’ so it keeps the 5MSM pulse beating.
See you next Friday morning,
Andrew
The first and third scenarios both involve a business's automatic threat of denial of service if the customer's non-compliant behaviour isn't remedied, so it was interesting to see how your question tackles a different aspect in each case. It certainly got me thinking!
It seems to me that in both cases the business is weighing the risk posed by the non-compliant customer (safety of employees and other customers in scenario 1, potential financial loss in scenario 3) against the value of the "offending" customer. Uber values their customer and seeks to steer them towards compliant behaviour; the "TAB" clearly does *not* value their customer and aims to sever the relationship even when the non-compliance has been quickly remedied. What the TAB has overlooked is another key aspect of risk: reputation. Uber enhances its reputation by sending an implicit message to the customer that they can have confidence in the safety and reliability of their service, driven by the customer's cooperation in achieving service-wide compliance. The TAB damages its reputation by being rigidly and unnecessarily punitive, with the implicit message that it sees all non-compliant customers as recidivists.
Strategically, it's useful to remember that risk is defined as "the effect of uncertainty on objectives" – not just negative effects, but also positive ones. Can the uncertainty of a customer's non-compliance be turned to *advantage*? Uber seems to think so: retaining the customer while eliminating the non-compliance is a no-brainer. The TAB's strategic thinking, in contrast, is clearly flawed: they believe it's in their interest to remedy the non-compliance and then encourage the customer to take their improved custom to a competitor. Doh!
Thanks for stimulating some deep thinking during the holidays :-)