US based investment writer Mike “Mish” Sherlock called Sony’s support line to get a repair for his recently purchased laptop computer.
What followed was something from the 1970s Soviet Union – a simple request turned into a twelve day, 34 step odyssey of structural incompetence on the part of Sony.
The tragic thing is Mike’s tale is all the result of mis-matched rewards in Sony’s organisation;
- Sony’s management wanted to increase profits
- Extended warranties were identified as a revenue generator
- A senior manager decided cutting support costs would improve returns
- The technical support is outsourced
- Costs are saved by splitting contracts
- Each outsourcer has a different IT platform
- The outsourcing contracts have quotas and penalties
- Individual staff are penalised for escalating problems
- Support staff have tight performance criteria
At every level performance indicators were met, despite the whole process costing far more than fixing the problem efficiently would have had – not to mention the loss of Mike as a customer – something that Sony can ill afford.
Not surprisingly, the computer ended up being fixed by a local IT guy. Richard almost certainly earns a fraction of Sony’s Executive Vice President Group General Managers, or whatever the title they have to match their compensation packages is, yet he gets the job done.
In Sony we see the Soviet model of management at work – an unaccountable, out of touch cadre of apparatchiks meeting their requirements under The Five Year Plan and are rewarded accordingly.
Just like today’s Executive Vice President Group General Managers with their KPIs and bonuses.
As we all know, the Soviet Union failed in 1991. One wonders when we’ll say the same thing about Sony or the dozens of other large corporations that have lost their way.