Late in the evening six months ago, my wife and I were driving back to our hotel in the dark when we came upon what looked like an abandoned service station. Since it was entirely dark, we assumed it was closed. This was annoying as we needed milk and some other groceries and it was getting late.
I was also confused. I had stopped there often before, and remembered shopping at the very same service station on Christmas Day a few years ago. How likely was it, I wondered, that a place which opened on Christmas Day would close at 8 p.m.? So, disregarding the abundant evidence that it was shut I took the off-ramp anyway and drove through the lorry park to see if there was any chance of finding some cheesy comestibles.
There is a restaurant
run by an acclaimed chef which went bankrupt and
I am convinced it is because it installed smoked glass windows
Sure enough, beyond the dark and forbidding lorry park, we came upon a 24-hour Asda, which sold everything we needed. Predictably, given the lack of welcoming illumination outside, we were the only customers in the place. I rather got the impression that they hadn’t sold a litre of petrol since nightfall.
‘What’s going on?’ I asked the young man behind the till. I faintly wondered at that point whether the lights had been sabotaged by a gang of criminals who hoped to carry out some nefarious raid while undisturbed by other customers, and that we might have stumbled into a crime scene. ‘Why are all the lights off on the road?’ ‘Oh, I think the last guy forgot to turn them on at the end of his shift.’
That was it. There was no urgent rush to rectify the problem, no hurried dash for the light switch. In fact, when we left, the place was still in darkness.
Now I’ll admit this question of lighting is an obsession of mine. I am forever coming across places which appear to be closed when they are not, simply because they are shrouded in darkness. Coffee bars, late-night corner shops, even pubs and restaurants. There is a restaurant in London run by an acclaimed chef which went bankrupt and I am convinced it is entirely down to the fact that it installed smoked glass windows.
I share this obsession with the late J.J. Sainsbury, founder of the eponymous British grocery chain, whose dying words were (truly): ‘Make sure the stores are kept well lit.’ I sympathise. After all, the most basic rule of business is to make it obvious that you are indeed open for business.
But as I was driving away, a thought struck me. There would be no consequences for the store staff for failing to turn on the lights – despite the catastrophic effect on the store’s takings that evening. Nothing would happen at all – beyond perhaps a mild ticking-off. Yet had the store’s CCTV shown the same employee filching a Lion Bar from the confectionery shelf at 2 a.m., he’d probably lose his job. The former might have cost them £1,000 in takings, the latter would have cost perhaps 80p.
That’s because costs are visible and measurable, whereas ‘opportunity costs’ are not. The current, financially driven culture in business is consequently obsessed with reducing costs and pays very little attention to missed opportunities. As the London Business School Professor Jules Goddard observes, the typical balance sheet contains six cost lines and one revenue line, and boardroom discussion tends to follow that same ratio. Finance departments, which increasingly hold sway over business, can claim credit for reducing costs, which they can control, and yet are not held responsible for any resulting loss in opportunities. Costs are dogs which bark in the night. Opportunity costs stay silent.
The day after we had visited Asda we rang a fish and chip shop to find out if they were open. There was no answer. We happened to drive past anyway and they were patently in business – there was a short queue outside. When we went in, we asked why they didn’t answer the phone. ‘Oh, we don’t answer the phone when we are busy,’ they replied.
In the past three months, I have telephoned hotels, restaurants and pubs and routinely received no reply, even when it is obvious they are open. Seriously, when did this happen? When I was growing up, my parents ran a small business from home. Even when I was 12, not answering the phone was a heinous offence. It meant lost business. Now the problem has become systemic. It isn’t just that you phone people and receive no answer. You don’t bother to phone people in the first place because you don’t expect an answer, or expect to wait for bloody hours because ‘we are receiving an unusually high volume of calls at the moment’.
It is my contention that the telephone is perhaps the most important business technology ever invented. It instantaneously bridges the gap between initial interest and the final transaction. There are still billions of potential transactions which cannot take place without an immediate answer to a question, or an exchange of information. Does your hotel accept dogs? Do you do a gluten-free option? Are you open this evening? Can you fix a leaking tap tomorrow? How much do you charge?
But this fairly obvious insight fell victim to the fashionable belief that there was no need for a business to pay the costs of talking to customers because answers to all those questions can be found online. This led to the belief that answering the phone was a cost, rather than a necessary and valuable component of the conduct of business. Call centres are correspondingly understaffed; websites hide their phone numbers on obscure pages or else omit them entirely. One reason businesses are in crisis is that they are measuring the wrong things.
There is a great deal of media conversation about the need for economic growth. This conversation tends to revolve around taxation, business rates or investment in infrastructure. All very important, I’m sure. But the fact remains that you could easily grow GDP by an extra 2 per cent each year – if only businesses would answer the sodding phone. And keep the lights on. These are the kind of things which never appear on a balance sheet or attract the attention of procurement or bloody HR. But they are slowly killing commerce.
If you really want economic growth in this country, buy any business friends you know a copy of Obvious Adams by Robert Updegraff for Christmas. It is 56 pages long and first appeared in 1916. For the first five pages you will think, as I did, that it is one of the hokiest books you’ve ever read. By the end you will realise it contains a kind of wisdom which has deserted most organisations.
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