Sunday, September 30, 2012
The Problem of Mass- Just ask General Motors!
Jim Carver - Blogger @ Cleveland Plain Dealer
We’ve seen the history of mass during the Industrial Revolution. It has taken the form of: production, factories, transportation, food, retailers, riots, consumption, marketing, start-ups, dotcoms, healthcare, layoffs, moving overseas and closures. Anyone see a mass pattern here?
During the 1960’s, it was common to find several gas stations at any major intersection in the United States. They attempted to offer free drinking glasses or soda (6 packs, 12 packs, or even a case) to compete for your business. Many offered full service car repair. The service stations paid employees to wash your windows, check your oil and pump the gasoline.
Near the end of the long tail, service stations offered free 2-litre for enticement, but the auto services and attendants began being replaced with mini-market stores inside the business. Check your own oil, wash your own windows, pump your own gas or air into your tires (no longer free). The money was being made from the food and merchandize sold inside the market, not the gasoline product.
Gas card have become the only form of enticement and serve as a form of customer tracking, while some outlets feature a car wash. Few gas stations offer any type of mechanical service.
Slowly gas stations in cities became less prevalent. The economics of the industry changed. Retailing to the masses was no longer sustainable.
Many of those street corner businesses have been replaced by drugstores. Where you find one pharmacy, you’re likely to see another close by.
The same with big box stores replacing grocery stores, hardware and retail stores. Businesses designed to market to the masses by offering one-stop shopping.
Healthcare is another industry falling into the mass trap. Many healthcare businesses are expanding, merging systems to reduce cost and increase services. This reduces the competition and one company is committed to serving the masses.
The biggest problem of scaling to mass is- it just doesn’t last. One large change in economics, technology or market share can bring a giant to its knees. Just ask General Motors.
The problem of mass:
· Lower wages (unless unionized).
· Loss of personalized service. Mass is about numbers, not people.
· Customer service suffers. Familiarity is gone. Nobody knows you.
· Quality becomes lost in the focus of mass (replaced with a chant).
· Lack of standardization of employee roles becomes a morale issue.
· Consistency from employees between roles, location and businesses differ.
· Growth is all that matters.
The biggest problem with mass is once the threshold of growth is met, the scale of the business becomes about reduction. Then the pain begins. When you cheapen something to obtain mass acceptance, offering less at the lowest price is the only option. The race to the bottom is all about someone else doing something cheaper!
It’s far better to offer services of exceptional value with customer and employee satisfaction to sustain or grow a business. Natural growth built on a sound business foundation is far sturdier than scaling to mass.
It’s no secret.
Just ask General Motors!
Until We Meet Again,