Monthly Archives: August 2013

Death by accountant

Some people are not very good at their jobs. Accountants are one of the critical roles in a successful company. If they are good, the company can flourish. If they are bad, it can die. I have come to the conclusion that the worst employee a company can have is an accountant who thinks they are clever but is actually an idiot. If they work with an equivalent self-regarding idiot from marketing, they can destroy a company. Again, many marketing people are essential and very talented, but some just aren’t.

Permit me one rant as a good example:

My dishwasher just broke, again. It is Hotpoint. I wasted a fortune and six hours of my time to get one of their engineers out to fix it, under guarantee, then another to repair the damage he’d done by doing it wrong. Total repair time was 3.5 weeks because they don’t have enough engineers. They cost money apparently. The 6 hours was because an accountant had decided that they should use fewer staff in the call centre to save costs, and even though their customers probably earn more than a call centre staff member, that would be their money, not Hotpoint’s. It’s OK to waste customer’s money and time, even if they never want to buy from you again as a result. And I won’t!

I would normally have trashed the dishwasher, but the girl in the call centre assured me that this model should last for several years after the repair, and they’d give me a 3 month extended guarantee. So I did. Big mistake. Now, 3.5 months later, it has broken again, £110 for 3.5 months dishwasher, not good value at all. This time I decided to fix it myself, but I’d watched a TV program about people who had dishwashers repaired by independent engineers and they wouldn’t work because they weren’t allowed the codes to reset the machine. An accountant had worked out that that blocking independent fair-priced repairs would guarantee high-priced work for their own engineers. However, this is a broken hinge, so might not be part of the control system. I found the broken part, a far-too-thin for the job bolt, which had sheared due to normal everyday forces on it. The thin bolt is cheaper than a strong one, saving several pounds a year for Hotpoint, and designed to last past the initial parts and labour guarantee. After that, the few pence for the bolt is covered by the 5 years by the parts guarantee, but changing it is a £110 call-out fee. Savings are minimal, the potential extra high value work for already overloaded engineers is actually minimal, but the cost of no more sales of white goods ever again to that customer is large. The outcome is a small short term gain, followed eventually by death as customers blacklist them one by one.

This kind of accountancy decision happens everywhere. Identifying tiny savings here and there presumably wins a little praise from a line manager, perhaps an extra bonus for the staff that thought it up, but who  checks the cost of losing the customer by thoroughly annoying them? That usually isn’t one of the beans that gets counted.

Comet went bust a while back. I remember going there. They had a price guarantee on all their products, so why would anyone need to go anywhere else? Well, an accountant and a marketer decided they could offer a price guarantee to fool all their dumb customers by adding a different letter at the end of each product code, so that they could claim that it wasn’t actually the same product, so the comparison didn’t count. So all their customers stopped buying from them. Death by accountant.

A few of our local restaurants suffered presumed death by accountant too. They were doing very well, filling the place, with lots of happy customers. One day, they look at the books and an accountant explained that if they sold lower quality food, or smaller portions, then profit per meal would be higher. But they presumably didn’t take into account the effect on sales volume of selling lower quality food or reducing portions. Customers stop coming and buying, so they went bust. Death by accountant again.

One or two well-known supermarket chains frequently tried for far too long to fool their customers with fake half price offers and selling large packs at higher price per kilo than small ones. Then it seemed to catch them by surprise that people were going elsewhere. Their accountants and marketers presumably think that customers don’t ever realise the tricks and don’t mind having their intelligence insulted and their time wasted calculating value every time they visit. Their accountants and marketers are actually by far the most valuable employees to their competitors, who see their market share increasing rapidly at their expense.

Telecoms companies, TV companies and many others who sell contract based services take confusion marketing and trick contracts to extremes, with relative novelties such as putting everything possible on their sites except links to let you end a contract, which they make as difficult and time consuming and error ridden as possible. Tricking customers by auto-renewing and making sure that the auto-renew engages a month before a contract expires, and not letting the customer know near that time is tantamount to fraud, but is apparently legal. As long as they mention it in the small print once during the entire life of the contract they can avoid punishment. Obviously their customers don’t check every service they have every week and enter diary reminders to check years ahead on everything they buy, so this is very deliberate trickery. It might make a short-term win, but once a customer is fooled once, they are very likely to avoid doing business with that company again. It may take time, but those customer migrations will eventually be death by accountant too.

Automatically increasing insurance and hoping customers won’t check also trades short term wins against long term survival. The problem seems to affect many industry sectors. This suicide-by-accountant trend seems to be an epidemic at the moment. It must surely end soon, because customers are proving that they are willing eventually to migrate their custom to companies that treat them better. Those accountants that are praising their own cleverness today are actually accumulating a huge volume of angry customers who will happily leave them to die when the market inevitably provides such a sensible competitor.

Customers aren’t stupid. You can treat them as fools for a while, but eventually they will resent it. Then you’ll lose far more than you ever gained.

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The future is magnetic

‘It works by using magnets’ has been a description of many a perpetual motion machine. Magnets bring out the nutter in people. But they are incredibly useful, and I say that as someone who thinks ‘incredibly’ is used far too often these days.

Magnets are very good fun as toys but you need to be a bit careful with them. I have had a few accidents with them, the most recent playing with magnetic ferro-fluid, which I can vouch makes a real mess of your hands for several days. I also have some levitation toys that are extremely good fun.

http://www.telegraph.co.uk/technology/news/10235261/Inside-the-Hyperloop-the-pneumatic-travel-system-faster-than-the-speed-of-sound.html describes a futuristic high speed rail system. Well, it isn’t all that futuristic, the idea is 100 years old. But it hasn’t been built yet so it is still in the future, and is at least 10 times better than the UK’s pathetic high speed rail proposal which only floats at all if you use extremely misleading figures about costs and benefits. That is worth a small fraction if what is claimed and like all government projects will cost three times as much as claimed.

I am a big believer in magnetic train propulsion, and levitation, not least because they are proven tech. Putting the system in a tube and using rail gun tech will reduce drag enormously and allow far higher speeds. Remember, in free air, drag goes with the square of velocity and power is drag x velocity. In a tube, air can move at the same speed as the train, so drag can be reduced to almost nothing. So with low friction thanks to levitation and low drag thanks to the tube, supersonic speeds are doable. Other groups have suggested vacuum tubes, but that is not as sensible thanks to increased engineering difficulty, with big cost and safety issues.

I proposed a linear induction bike lane several years back which of course is a sort of magnetic propulsion. Nobody has built that yet.  The Car in my recent sci-fi book levitates magnetically on a plasma cushion. That sounds futuristic but it was proven in principle in 1964 and is easily feasible with 2092 technology. The lift to the heroes’ base is magnetic, some of their weapons are magnetic, their pet drone orb thing and their holographic disks all rely on magnetic levitation based on plasma. I even invented magnetic carbon muscles for my heroes’ suits. They would use tiny graphene coils in a folded structure in the material to achieve strong contraction and super strength at low cost. One of the social problems they had to contend with was use of smart electronic drugs in conjunction with deep brain magnetic stimulation.

There is a lot of pseudo science that gives magnets a bad name though. Stuff like magnetic bracelets that some people wear who really ought to know better, that allegedly align the iron in your blood, and somehow it doesn’t immediately go back to random as soon as it has passed by, or magnetic descalers that align the water molecules or something, or the fuel treatment magnets that magically add lots of extra energy to your petrol. These are the stuff of nonsense. So are all things that claim perpetual motion.

But cars, trains and bikes, yep, they can all be made magnetic very usefully indeed. And carbon muscle fabric. And all sort of levitation systems. The future is magnetic, even if a lot of nutters say the same thing.