COMPANIES THAT FORGOT THE CUSTOMER.........
Facinating that the lead article in this weekends The Australian Financial Review is so scathing of Australia's corporate culture.
More specifically that of QANTAS, Coles Myer, Telstra ect.
Those who have been around pprune for a while will no doubt be aware of how QANTAS operational staff are desparing of the abuse and neglect being inflicted on our national icon.
The article describes the term "short-termism" and is described by the business council of Australia as major problem.
Their report concludes that "short-termism" is, "increasingly a driver of market behavior and a potential constraint on longer term value creation"
On pprune we have more correctly defined the problem as the, "executive performance bonus".
Hell, the BCA it seems agrees and goes on to say, "it may be that short-termism is the result of rational decisions made within an incentive framework that skews the decision maker's focus towards the achievement of short term rewards, even to the detriment of long term returns".
It goes on to explain how reinvestment in aircraft at QF has been constantly delayed to avoid the disincentive of market reaction to spending programs.
At pprune we have correctly described the term as "pigs at the trough". This term descibing the actions of Senior Executives gorging themselves on bonuses derived by maximising short term profits before they move on to their next gig. Leaving the company a basket case.
The article explains, "the overriding imperative in these [QANTAS, TELSTRA etc] cases has been to demonstrate to the market that management is focused on keeping costs down.
The distortion was compounded by executive renumeration schemes that set cost reduction targets as hurdles for bonuses and other incentives.
In a very direct manner, business manaagers were being encouraged to gorge themselves on the carcases of sacked workers.
Maybe you miss your revenue target but at least you meet your cost cutting KPI's."
Rings a bell doesn't it for those at the rat?
The whole article makes facinating reading especially since it comes from the same publication that only weeks ago was hailing Geoff DickSon as the new messiah.
If anyone has an account that allows the link to be cut and pasted it would make interesting reading for the general public.
It'll also be cathartic for those of us at the coalface who still care enough to bemoan our continuing and tragic slide into mediocrity...................