Spotlight: It’s the Culture, Stupid!

A business’s long-term staying power is determined by its corporate culture. Despite this, most companies pay less heed to building a good one, and more to short term profit making. Let’s explore what you as an investor must look at while assessing how cultured or uncultured a company is.

I was recently travelling with my family in a luxury bus from Goa to Mumbai. I call it luxury because it had a working AC and the seats that adjusted a bit. That’s it!

It was a night journey, which began on a bad note (the bus was late), and ended in a nightmare (the bus broke down in the middle of night near a lonely place called Chiplun in Maharashtra). That we were travelling with four kids added to the nightmare. Twice, the bus got filled with smoke from a faulty electrical system, so twice we had to run out with kids and luggage in our hands.

The next bus was called for only after an hour of getting stranded, and this replacement bus was supposed to reach us only five hours later.

I called up a nearby hotel and the manager there was courteous enough to send a cab to pick us up and then arrange one to send us to Mumbai. In all, a journey that was supposed to take 10 hours, took 18. The cost of travel was higher by almost 75%.

“I want a refund for the breakdown of the bus and the harassment it caused the passengers,” I asked the customer service representative on reaching Mumbai. First, he did not have any information that his company’s bus had broken down, and then when he confirmed with his representatives, he agreed on a refund.

“We will refund you Rs 400 per passenger,” he told me. “Just 25% of the total fare?” I countered. “That’s less than half of what it costs to travel from Chiplun to Mumbai in a similar bus! And what about the trouble the entire episode has caused us?”

“This is what the head office has decided!” he replied and kept the phone down before I could say anything else.

I called up their head office, and got the same answer from their senior manager. And the casual way he and his team dealt with the entire situation was equally sad!

“I won’t ever travel with your bus!” I told him. “That’s fine!” he said, and banged the phone down.

“That’s what you get in the name of customer service,” I told my wife who was constantly asking me to calm down.

Well, the bus I was travelling in was from a company called VRL Logistics, a company that recently came out with an IPO, and which constantly talks about how they delight customers! They were in fact recognized as Service Provider of the Year 2013 by some World Travel Brand Awards (says a lot about how awards are won!)

Damn the Customer!
I am willing to bet my money on the fact that if I ask you to name 10 companies in India that have delighted you with great customer service, and 10 that have troubled you with a poor one, the second list will come out faster and the first would not get complete at all.

I am sure the situation is bad across countries, but the unprofessional way companies treat customers in a populated country like India truly deserves a case study (on how not to treat customers) at Harvard Business School.

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