No Smoking Gun!

In "The Truth Behind The Click" Panorama promised to shock us by uncovering working conditions at Amazon that have been condemned as amongst the "worst in Britain" but did they succeed?

 

Amazon is not only a massively successful retailer, it is also a huge employer of people in the UK providing work for 20,000 people on the run up to Christmas. As fantastic as that is it doesn't provide them with any excuse for creating working conditions that put people's health at risk or for setting unreasonable targets. The trouble is that I felt Panorama failed to show much evidence of either.

So what were the main arguments? Much was made of people being "treated like robots" and "racing a computerised clock." This is all very dramatic but actually describes the use of a hand-held terminal (HHT) to guide a picker where to go next and give them an indication as to how long each task should take. The work rates were compiled from historical performance levels. Apparently the mental health of the picker was put at risk due to the sound the HHT made when they scanned the wrong pick location or item.

This is all very standard technology. I have been working with HHT's in similar environments for at least 25 years and given the size of the picking area and number of items I'm not sure that there is much alternative to using them to guide the picker. As for the work rate, surely it is reasonable for any employer to set productivity targets and encourage people to achieve them? Ok, I would have expected the targets to be set using work study data rather than past performance and the "encouragement" was a little on the threatening side for my liking but I wouldn't have thought either of these things out of the ordinary.

If the undercover journalist was scanning the wrong thing with so much frequency that the error "bleep" was keeping him awake at night then this probably had much to do with why he was struggling to hit the performance targets on the grounds that if you waste time doing the wrong thing you have less left in which to do it right. And why was he scanning the wrong pick locations so often? They looked clearly enough labelled to me.

The distance walked was also mentioned repeatedly with 11 miles covered in a 10.5 hour shift. Again, having worked in similar environments I would have thought this neither unreasonable or out of the ordinary. After all a brisk walking pace is closer to 4 miles an hour.

So what about the legality of the shifts? Well to my knowledge the regulations demand that night workers do an average of 8 hours in any 24 hour period. Amazon comply. Only if the work "involves special hazards or heavy physical or mental strain" must they be restricted to 8 hours work in 24. Although I'm quite sure that the work is tiring (work tends to be) I really can't see that this applies to what we were shown.

The programme also showed us the impact Amazon has had on a smaller retailer. They might as well have talked about the effect of the Internet on HMV or the supermarkets on corner shops. The retailer talked about "if you can't beat them, join them" but surely therein lies his problem. He can't join them. To survive he has to offer something different, the kind of product knowledge, personal service and outstanding shopping experience that Amazon can't provide.

Anyway, what did this have to do with working conditions in the distribution centre?

Referring to the pressure people are under Paul Kenny from the GMB said that he has "never seen anything like it" and Martin Smith claims that the TU has been "driven underground and has to operate like the French Resistance." Again, we weren't shown anything to suggest that this is any more than sheer hyperbole. I think the TU would have much more to say if Amazon decided to invest heavily in automation, something I am surprised that they haven't already done.

To be honest I really didn't like the way a points system was used to control absenteeism and would suggest that there are better, and more effective, ways to achieve the same thing but that aside all I saw was an extremely large scale business being well, if toughly, managed and run.

In other words, pretty much what I expected.

Written by Mike Gamble: Director JEM Retail Consultants.

Consultant Speak With Forked Tongue!

At the end of the day, when push comes to shove, most professions have their own lingua franca designed to make communication easier. Management consultancy may have the dubious distinction of one that purposely does the opposite by creating a vocabulary of confusing expressions that usually have a different meaning to the actual words used. So which ones make you as sick as a parrot?

 

Having worked both with and as a consultant I often feel that the jargon used, particularly the dreaded three letter abbreviation (TLA) is designed to confuse and exclude the uninitiated who feel too embarrassed to ask for an explanation. Change programmes abound with ERP and WMS, flirt with MMS and WCS and get positively obsessed by EDI and VPN.

As annoying as this can be, at least this shorthand does actually have a specific meaning and failing any other source of information Google can usually provide. Far more sinister is the use of consultancy jargon. I recently worked with a well known IT and e-commerce Director who, faced with any challenge to his preferred way of working, would justify it as "this is just standard good governance practise". This was very clever as although the expression actually means very little (and wasn't true anyway) it places anyone wanting to disagree in the position of refuting a mythical body of opinion that has established the "standard". People tended to stand around and nod wisely in agreement.

Some of my other "favourites" include:

"I just wanted to touch base with you." While superficially expressing a desire to communicate, it usually means one of two things: "I need to ask for something and I know you won't like it"; or "I want to tell you this so that someone else gets to share the blame".

"Let's take this off line." Used by the chair of a meeting to bring an end to a discussion they either don't like or have lost control of. Just be aware that it will probably never be talked about again.

"I'll ping you the deck." Just means "I'll send you the PowerPoint slides (and there are no doubt many of them) by e-mail." Why not just say that? Do these people know how ridiculous they sound?

"Granular" or "granularity." Again, if more detail is required why can't people just ask for it? I suspect that this pseudo technical expression actually means "I can't decide so I'm going to ask for more information I suspect people can't find as a delaying tactic."

"Let me play this back to you" or "What I think you are saying is...." Be warned! This will not be followed, as you might expect, by a paraphrased version of what you have just said to check understanding, but instead by what the speaker wishes you had said, thinly veiled by using a few of your words. If you're not careful then whatever rubbish is about to be uttered will become yours by association.

"We need to keep this on the radar." Lovely expression. Generally means "I don't know what to do about this, but I figure it will come back to bite someone so I'm going to make sure it's you."

"I think we should push back on this." Or otherwise "I disagree violently but desperately want to avoid a confrontation that I know I will lose."

So, consultants are likely to use the language in a truly horrible and generally misleading fashion, but do they do more than borrow your watch to tell you the time (and then keep the watch)? Well under the right circumstances (and, I am bound to say, using the right consultants) then "Yes." Here are some of the benefits:

Focus on the project or programme. The consultants are around to achieve a particular objective, have no day job to distract them and no agenda other than that set by you (i.e. they tend to stay outside office politics).

Wide range of experience and of what "good" looks like. Consultants can bring a greater breadth of knowledge and experience of what can be achieved than that possessed by your permanent team gained from working with lots of clients and in varied circumstances.

They aren't trying to take anyone's job away. Generally speaking people work as consultants because that is what they want to do. They don't represent a threat to people.

Delivery will be on time, within budget, and to the required level of quality (or it will be if you work with JEM!)

I'd love to know from you why you do or don't bring consultants into your business, so please take part and leave your comments in response to this blog. I'll even follow up by adding more entries to the Consultants Dictionary!

Written by Erica Vilkauls: Director JEM Retail Consultants.

 

Falling Standards Or Systemic Failure?

In October 2013 the Guardian reported that "Out of 24 nations, young adults in England (aged 16 - 24) rank 22nd for literacy and 21st for numeracy. England is behind Estonia, Australia, Poland and Slovakia in both areas." This year the overall pass rate at GCSE fell for the first time in the exam's 25-year history as well as the proportion being awarded top grades falling for the second consecutive year. So is our school system failing us?

 

Why would someone who works as a retail consultant be writing about our education system? Well, for a very good reason. Warehousing and distribution is primarily a people business and whether it is to run an operation or deliver a project, I have had the responsibility for putting a team together on many occasions. In my experience it has become increasingly difficult to recruit people that possess the skills in literacy required to write a decent report, and the standard of arithmetic necessary to create a basic spreadsheet.

This impression is backed up by the findings of the Organisation for Economic Co-operation and Development (OECD) who found that in England adults aged 55 - 65 performed better than 16 - 24 year olds at foundation levels of literacy and numeracy. The OECD warns that the "talent pool of highly skilled adults in England and Northern Ireland is likely to shrink relative to that of other countries."


Most people in this country are still educated in a comprehensive school, a system that was introduced from 1965 as parents increasingly revolted against the 11-plus examination and in response to expectations in education that could not be met by a process of dividing children at the age of 11, sending one lot to grammar schools, from where they could continue to university, and the rest to secondary moderns with much more restricted opportunities.

The introduction of comprehensive schools was about more than education, as ending the practise of separating children at so young an age was also aimed at social reform. It is therefore disturbing that other figures from the OECD report that Britain has "some of the lowest social mobility of the developed world" and that in some ways mobility is worse now than it was in the 1970's. "For every one person born in the 1970s in the poorest fifth of society and going to university, there would be four undergrads from the top fifth of society. But if you were born in the 1980s there would be five."

I reported in a previous blog, "Are Our Bosses Worth It" that 15% of total UK income is now in the hands of the top 1% compared to less than 6% in the late 70s. So has the comprehensive school system been a two time failure addressing neither standards of education or social mobility? I put this question to a close friend with vast personal experience of state schools. His answer was clear and I have repeated it here in its entirety:

"My support for the comprehensive system arises primarily from an abhorrence of any system which sets out to divide young people at the tender age of 11 (or indeed at any age) into sheep and goats with all that implies for their self-esteem and their image in the eyes of other people with effects that are likely to be lifelong, and to do so, moreover, by means that have known faults and short-comings."

"On top of that I am opposed to any "system" that awards or condones unearned privilege, including that which allows parents to buy, through schooling, easier access to higher education and to opportunities denied to other young people in the professions and positions of influence."

"You refer to the "Comprehensive School system's failures." I would have to challenge that on the grounds that the comprehensive system has never been tried in this country."

When 32% of MPs, 54% of FTSE100 directors and 70% of judges were part of the 7% of the population educated in private schools you can see his point.

So what are your views? Most of the people reading this will have experienced this country's education system, either personally, or as a parent, or both. Is it time for a radical overhaul?

Written by Mike Gamble: Director JEM Retail Consultants.

Are Our Bosses Worth It?

The economic recovery has "taken hold" according to the Bank of England. Well that is certainly true for the leaders of FTSE100 companies who have seen their average remuneration rise by 14% compared to the squeeze in pay felt by many other households. What makes them worth it?

 

According to TUC General Secretary Frances O'Grady "Britain's top bosses are back to their old tricks as their pay is growing 20 times faster than the average worker." What she is referring to is the increasing use of long term incentive plans (LTIP) as part of the overall remuneration package for directors of FTSE100 firms. Pay analysts Income Data Services report that basic pay at this level has increased by a "relatively restrained 4%" while bonuses have fallen by 8.8% but at the same time LTIP's have increased by 58%.

Steve Tatton of IDS said "These divergent pay trends highlight the complex make-up of boardroom remuneration,illustrating that while one part of a director's pay package may go down, another part may go up. With nearly two thirds of FTSE directors benefiting from an LTIP award in the latest year, the higher share-based payouts clearly made up for any ground lost in lower annual bonuses."

Sounds suspiciously like agreement with O'Grady. But isn't it right that company directors should benefit from good performance? After all the FTSE100 index has increased by over 16.5% in the last 12 months. Or should people at the top demonstrate more restraint when the Office for National Statistics report that average wages have increased by just 0.7% over the same period. Far below the level of inflation.

O'Grady certainly believes that they should "The time has come for legislation to put ordinary workers on the pay committees of companies. That is the only way to bring some sanity to the way in which directors are paid."

This view would certainly have a sympathetic hearing in Switzerland where there is about to be a referendum that would stop bosses earning more in a month than their worst paid employees receive in a year. In this country that would limit some executive pay to around £160,000. Hard to imagine.

The referendum in Switzerland seems likely to fail but isn't the truth that more shareholders should join those of Shell, Aviva, WPP and others by rebelling and voting against the remuneration report?

Whatever the rights and wrongs of this it is a fact that 15% of total UK income is now in the hands of the top 1% compared to less than 6% in the late '70's. With the Markit Household Finance Index (HFI), which measures perceptions of financial well being, at its lowest level since April it is clear that the improvement in the economy has not filtered down and this level of unease may yet damage the confidence of the Bank of England concerning the resilience of the recovery.

So what are your views? Do you work for an inspirational leader who is worth every penny, or are they all corporate fat cats, disproportionately rewarded for the efforts of others?

Written by Mike Gamble: Director JEM Retail Consultants.

 

It's The Most Wonderful Time of the Year - To be in Advertising!

What does Christmas mean to you? Kids jingle belling and everyone telling you "Be of good cheer" or a bonanza for advertising companies promoting images of size zero models in skimpy underwear, impossibly attractive men posing as Aladdin and cartoon animals exchanging presents in the snow?

According to market analysts at Neilson, retailers will throw off the cloak of austerity by spending £390m on advertising over the last three months of 2013. John Lewis launched its campaign on Saturday night, paying £750,000 to take over an entire ad break during the X Factor. Apparently a single ad slot for the final will cost £180,000 despite steadily falling viewing figures indicating that the adverts are probably more entertaining.

Much of the discussion in the press is about the spending on TV advertising going up year on year and a move to social media to engage the consumer. The John Lewis offering, for example, was much anticipated by unbranded ads fuelling Twitter traffic under the hashtag #sleepingbear. But will the sight of Rosie Huntington-Whiteley prancing around in mashed up scenes from fairy tales (or the opportunity to name the Westie on Facebook) reverse 9 successive quarters of falling clothes sales for M&S?

"We think" says Steve Smith from Asda, "it's more important to invest money directly into lowering the prices of all our products instead of producing costly campaigns that just keep the ad guys happy". Of course this could just be sour grapes following last year's ill-judged campaign (more than 600 complaints to the advertising watchdog) but a recent online poll suggested that nearly two thirds of us agree and would rather see the big retailers giving money to charity than spending it in this way.

Having worked at the John Lewis Partnership I know they invest both money and partners' time doing all sorts of great things for community projects. Personally I would far rather see them use the money to do even more of this work than spend it on what looks remarkably like a remake of Watership Down with the strange addition of a bear. As great as the animation no doubt is the whole thing left me (and 68% of us according to another poll) strangely unmoved.

One important point to make here is the reliance on this quarter to make or break profits. In my "old school" merchandising training I was taught two things: spread your promotions over the year thereby reducing reliance on any one period; and don't mark down (people will just panic and buy late in the quarter). I see little evidence of good strategic planning and retailers holding their nerve.

An expensive TV advertising campaign is a poor substitute for a great product range and excellent customer service. Ironically this is another reason that the John Lewis campaign is lost on me: I would have shopped there anyway as they have products I want to buy, when I want to buy them. All the advert has done is to ensure that I will record anything I want to watch on ITV so that I can skip the very thing the retailers have spent so much money on.

So do you look forward to the seasonal tradition of the blockbuster adverts or would you agree that the whole thing has got out of control?

Bah, humbug!

Written by Erica Vilkauls: Director JEM Retail Consultants