Empowering People

Harvard Business Review posted what I thought was a good business article some time ago. It focused on adaptability. In a nutshell, it believes that in the inter-connected world, companies that adapt quickly is the new competitive advantage.

Adaptation, according to the authors, is built on four pillars: Reading a signal, experimenting, managing the morass of intra-company and industry framework,  and mobilizing the new strategy that comes from it. Today, these four things have to happen very quickly.

One line caught my eye: "Perhaps most important, they have learned to unlock their greatest resources—the people who work for them."

Yesterday (and yes I realize this has been beaten to death) United booted that fellow off the aircraft and is in a heap of trouble. It probably could've been easily avoided.

Employees are empowered to implement policy, not think on their feet, or use game theory. In fact, in a lot of large companies, employees thinking on their feet is discouraged (especially in litigious countries, like the US).

According to corporate policy (or legislated, depending on what country you're in) the airline can go up to $1,350 for cash outlays for 4+ hour delays, but much more with flight credits (because the marginal cost of a flight half full approaches zero). For long stays it's even more.

When an enterprising employee is empowered, he or she could auction off thousands of dollars of flight credits for a seat; in this case to 150 or more passengers. Someone(s) will take you up on it, and it might even be turned into a customer service win.  Instead, hamstrung, he or she delivered customer service horror, and a brand hit.

This lack of empowerment that a lot of folks talk about really hits home in racing to me.

They shall remain nameless, but I've talked to front-line or mid-management employees in racing who understand gambling quite well. They want to read signals, experiment, implement, based on their knowledge of what's happening in the trenches.

I guarantee there were people at Santa Anita who cringed when the TOC and CHRB were upping the juice. I am sure there were people at Twinspires who look at data, see what rewards do, see what winning more money does to their customer base in terms of betting volume, who wondered why Churchill was raising the rake. We can use copious examples throughout racing history, with its numerous policy violations.

They unfortunately aren't empowered to do anything. They might read a signal and bring it somewhere. There may be the experimentation phase, allowed by a senior manager. Then, even if it works, it hits the c-suite, and the c-suite looks at the third pillar - the morass of stakeholders - and it dies.

Racing employees who understand and want to do something are United flight attendants who aren't allowed to go over a set amount for a cash credit; a credit to potentially thwart a multi-million dollar company problem.

As someone who chats with horseplayers and customers often (and am unapologetically biased towards them) I tend to hear this : "People are so dumb in this sport. No one understands us"

I think there are scores of people who understand customer issues. Scores. But they aren't empowered to do anything about it.

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