Why "Industry Standard" is a Dumb Excuse

I ordered a PC online from HP last night, as I had bought one for my mother and was quite happy with it. Well, after I ordered it, I realized immediately that it would not ship until November 10th, and I did not want to wait that long. So I started a journey to cancel the order.

Here is what it entailed:

1. I spent about 30 minutes going through the emails from HP and their website and found no specific information about how to stop the order before it was shipped -- even though I had just ordered it minutes before. Note that after looking for another 20 minutes the next day I eventually figured that the website does address the problem -- it says that it is probably impossible to do it, but if a mistake was made, they will try.

2. I eventually found a number that seemed right and called, after about 15 minutes of going back and forth with the guy on the phone and being left on hold, I was told I would have to call back the next day because I was "8 minutes too late," although I am not sure what I missed.

3. I called this morning and was on hold 20 minutes or so. Then I was told that I would have to talk to the supervisor. I was put on hold. The person came back and offered me $100 to not cancel, I declined and said that I didn't want to order something from a company that made it so hard to cancel an order.  I was put on hold again, and then a supervisor told me that he would have to call the factory to cancel the order. I was put on hold and waited for the confirmation, which eventually came through.

4. I also complained to the supervisor about the fact it was impossible to cancel the order online, there was unclear information about how to cancel it or that it was impossible to do so online, and that it was an incredibly complex process to cancel. His answer was that what HP did was INDUSTRY STANDARD. I am not joking.

I am very loyal to HP, the current scandal pains me because I've known so many lovely and smart people who have worked there.  And as a faculty member in the Stanford School of Engineering, the generosity of Bill and Dave has made my life better in many ways -- Packard donated the funds for the building I work in, and they each donated two other buildings, and the Packard Children's Hospital was where my daughter Eve was born.  I have met many lovely and caring people from that hospital. I also am a big fan of Mark Hurd, who I think has done a great job of implementing the merger (who knows if it was the right strategy, but he did a great job with the cards he was dealt) and cleaning up Carly's mess in other ways.  It is my hope that they get past this scandal and return to making the company even greater

BUT this excuse and the practice itself are bad business and represent failed logic. It also possibly a dishonest claim, as it easier to cancel orders for computers that are bought online elsewhere.

1. The justification that everyone else does it, so it is right, is irrational: Just because everyone else in an industry does something stupid, does that mean you should do it as well? You may recall the famous 1994 testimony to congress when 7 CEOs of major tobacco companies each stood up and asserted that they did not believe that nicotine was addictive -- telling that lie was industry standard too!

2. As we've shown with both evidence and examples in The Knowing-Doing Gap and especially Hard Facts, mindless imitation of what has always been done in an industry or a company is one of the surest paths to destruction.  And even great companies -- and Dell and HP are still great companies in many ways -- often do many stupid things. Think of the most successful people you know -- many do unwise and destructive things, and they succeed despite themselves.

3. Breaking out of a dumb industry standard is how newcomers -- or reformed old-timers -- come to dominate an industry. Look at the iPod, Google (they were told that a technologically superior search engine wasn't worth it, it was all marketing), and the Men's Wearhouse.

4. This also reminds of AOL's PR fiasco a few months back where they got in enormous trouble for arguing with and refusing to cooperate with a person who wanted to cancel his subscription (See Bad Behavior at AOL). The people at HP were very polite and never argued with me, but like at AOL, are just trapped in a bad system and are apparently trained to say dumb things.  It also smells like one of those cases where, to hit short-term numbers, a company puts in place a system that can cause long-term damage to customer relationships -- like AOL.

5. Finally, the supervisor's claim that it was "industry standard" -- which I infer means making it impossible to cancel the order online, making it unclear how to cancel it at all, and to use a time consuming and friction-filled process for cancelling it -- turns out to be not quite the truth. At least if you define online sellers of computers as part of the same industry. It turns out that if I order an HP computer online from Amazon, and decide I want to cancel it before it is shipped, it is actually possible to do online, clearly explained, and easy to implement. Again, perhaps industry standard is a codeword for Dell. I would also add that this is yet another reason that I remain faithful to Amazon. They aren't perfect, but they do seem to value customers and put us first.

I usually try to avoid personal rants on this blog, but there are too many lessons in this one. There are general lessons about how imitation can become a substitute for thinking, about the damage done by copying misguided competitors, and how training people to say really dumb things can be bad PR. 

There are also specific lessons about things that HP needs to do:  I urge them to more clearly explain "How to cancel your order before we ship it" and even eventually put in a path for "Cancelling your order online."  Note the first change could be done in a day.

Comments

[gl hoffman]

I think your second number 3...breaking out of a dumb industry, etc...is a real gem. Most new businesses are started this way, with someone who just can't stand doing something the current way. Current businesses have a difficult time breaking out, or seeing the folly of their ways.

[Bob Sutton]

Niti,

This is precious and horrifying. And I guess a related argument is that what we are doing is well-above industry standards (which are pathetically low), implying that that we treat our customers badly, but give superior customer service because everyone treats even worse! The Coke thing is scary.

[Niti Bhan]

then there's the flipside of "following industry standards" [as an ex HP employee myself :)] that is claiming there aren't any standards at all as Coke recently did when pesticides were found in the cola in India.

[Bob Sutton]

Kent and Polly,

Thanks for your notes and your support. I do want to make clear that the HP supervisor wasn't an asshole at all, he was actually quite civil and my interpretation is that he was trapped in a system that made it hard to do this easily. And his training and incentives may have fueled some of what he did and said. I also found that other parts of the system worked well, it was just this one thing! And Kent I agree that HP has a trust problem in the media. But their customer service reputation has been getting better, and Dell's worse (indeed, though Dell is interesting in that senior management has publicly acknowledged that this is a problem and are working on it... so the industry standard the apparently set is below their aspirations.)

Thanks to both of you for interesting comments.

[Ally Polly]

Agreeing with Kent, I'm surprised at the defensive nature of the HP responder. Consumers are busy, and armed with choices, and a reputation like on-line ordering is built on customization and personalization, be it how you order it, pay for it or cancel it. I'm only sorry that someone like you Bob had to deal with this Asshole. Thank god I'm a Mac user...

[Kent Blumberg]

Wow! I won't be heading for HP's online ordering service anytime soon.

Seems some companies, HP included, don't get it yet. You must make the customer's experience with you seamlessly outstanding. If you don't, we'll find somewhere else to shop.

I buy from Amazon, because I know I don't have to read the terms and conditions. I feel I can trust Amazon to have reasonable terms and conditions - because of my own past experience and what I hear from friends. Amazon works to make my life easy. I trust Amazon. Read the T&C? - not this guy. I'll shop where I trust the T&C to be reasonable.

Spend more time placing the order? No way. That's the point of on line buying - convenience. If I want to spend more time I'll get in my car, drive to Best Buy, and talk techie with the sales folks. I won't spend the time navigating legal mumbo-jumbo on the internet.

Factory hours? Not the customers' problem. Dear HP: This is a flat, 24/7. You can't tell customers, "Sorry, the factory guys are sleeping now."

We'll go somewhere else to buy.

HP has a trust problem today, because of all the noise at the top. Sales behavior like what Bob encountered will not speed the healing of that wound.

Biggest error in the response post, though, is blaming the customer for the problem. Sorry - that's not the way to win friends and influence people. Sometimes the customer is wrong. But you'll lose that customer if you make that your main line of defense.

[Bob Sutton]

What do other people think of this defense?

I think it is a lame attempt by someone from HP to to cover up a bad system that they ought to change -- note that they are digging in and there is no acknowledgement that is OBJECTIVELY a system that provides bad and hard to find information about how to cancel an order and that can only be used with great effort by customers. And in fact, after looking and looking I realized that the only information it provides seems to be that cancelling an order after you make one is impossible -- although they will try if you make an error. It says:

"The HP Home & Home Office Store begins processing accepted orders immediately and is therefore unable to accept order cancellation requests once you have received an order confirmation. If an order is processed in error, contact our customer service immediately at 1-888-999-4747 for instructions."

I also actually think that if a company provides good customer service, I shouldn't have to engage in deeply legalistic and very time consuming behavior to make or reverse a purchase -- look at Amazon.

Should I have read the the fine print more carefully? Well, there are two answers. First, in retrospect, I realize that the person from HP is right, I should read it more carefully to protect myself.

Second, and in contrast, since HP is a company I generally trust and believe is committed to customer service (something I still believe, despite what is apparently a bad subsystem with badly trained people), I didn't think -- and still don't think -- that I should need to "protect" myself as the HP CYA e-mail implies. If I need a lawyer every time I buy something from you, I should just switch to a company where this isn't the case.

I would also point out that I asked this HP employee if he was serious about using such inane defense more than once-- and he said he was, repeatedly. I presume this is not the result of a bad employee, but of a bad system and bad training and perhaps bad incentives. I doubt this is a kind of random human error that happens once, I suspect it was taught to the person as part of his training -- just as was the case in AOL. It was the only justification that was given for the bad information on the web site and the the difficult process, and was said over and over again during the call by the supervisor.

More generally, in my work and research with companies, this is perhaps the 1000th time I have heard the defense that something misguided is done because everyone else does it... humans often use this defense, and in fact there is evidence that it sometimes works -- but I stand by my argument that:

1. HP does a horrible job of explaining how to reverse the purchase decision -- in fact they suggest that it is impossible even though apparently it is possible (compare to Amazon, where both are true).

2. I should not have to read every single word of a contract when I buy something -- to paraphrase Jeff Bezos of Amazon, that is the kind of thing the cell phone companies do to customers they are trying to screw, not companies that care about their customers. Indeed, an interesting comparison is Schwab, which briefly adopted this mentality, and when they realized it was driving away customers, Charles Schwab himself fired the CEO and took back the company in the name of his customers. I am a Schwab customer and I am constantly impressed by, how at every turn, I can tell they care about me as a customer, and want me for a long time, not about taking every penny they can from me every minute. Indeed, I never read the details of transaction with Schwab (nor does my wife, a lawyer) because I trust them not to screw me.

3. HP has designed a system with little easily available information and that requires huge amounts of time to use -- sorry, but that is in direct opposition to design principles that are meant to be considerate of customers.

4. As for the difference in hours, it does seem to me that it should be possible to have a system where -- 15 minutes after a machine is ordered that won't ship for 20 days -- to develop a way to cancel the order online. I am not an expert on the design of supply chains and web based businesses, but I bet that if I convene a panel of experts in the area, they would tell me it was possible, and not all that hard to do. Perhaps you should build in a web--based one hour "grace period" after an order where orders can be cancelled or changed. Or is HP -- or at least some group in HP -- linked to a set of incentives that makes it in their best interest to make it hard to cancel an order, no matter how hard it is on the customer?

In short, this is classic CYA behavior -- why don't you do what good companies do when they do things badly? There is evidence on this point... read Hard Facts:

1. Acknowledge that the subsystem is bad and mistakes were made.

2. Apologize and explain how you have learned from your mistakes -- note there isn't a hint of system learning in this note.

3. Start fixing the problem.

I see no evidence of any of this in the above note, only blaming the customer. Indeed, for starters, there is not even any sign that anyone at HP intends to fix the website so that the process required to cancel the order is made more clear -- and easy step.

Finally, I want to make one more thing clear, as I did in my post: I think that HP has become a much better company on the whole in recent years under Mark Hurd, the service and products have improved, and in fact I still intend to buy an HP computer -- just not online. I just think that is just one small thing that needs to be fixed in a company that I admire, and I believe will overcome its current problems and become even greater than ever in the future.

Even the smartest companies do bad things, the question is: What do they do after they make a mistake or discover a problem?

[N/A]

My only question to you would be did you take the time to read the terms and conditions behind ordering with HP before placing the order? When ordering online it is assumed that you are agreeing to the terms listed by the company, should you disagree with the terms well then the option of not ordering always presents itself. There is information regarding cancellations on the website. Per you complaint about the length of time spent on hold you must understand that the amount of calls going into a company cannot be exact therefor a staff level to accommodate calls can only be forcasted. To further myself here is what you SHOULD have done:

1. Read the terms an conditions on the website before placing your order so you are aware of company procedure.

2. Spent more time placing the order and taking note to the "frogger" that follows you as you customize a system. This gives you and update on the estimated ship date AS YOU CONFIGURE. In addition on the order processing page it indicates CLEARLY that your ESTIMATED BUILD DATE will be such and such a date.

Also for your own personal knowledge, the factory does not work the same hours as the sales center and therefore you cannot expect supervisors to be able to contact the factory at all times. The order placed by yourself on the website was not to your satisfaction, that's exceptable, however, you must realize that HP would do what is possible to keep their customer's happy and attempt to meet your requests (within reason)

Per the statement about "industry standards" that isn't the case but flaming an individual for his choice on words may be a bit childish for someone like yourself. Human error occurs and it appears as if you are unwilling to accept that.

[nraynaud]

This is something I always told to companies I've worked for. You can't say at the same time : "We are better than the others" to customers and "We do the same as the others" to employees (or even worse : customers in your case).

Actually i was suprised cancelling an order was so simple on amazon, they send a confirmation mail, you clic and the page directly propose cancelling it. I cancelled the order of your books on amazon.com to make them on amazon.co.uk for shipping to be faster and cheaper.

About HP, I was delighted reading your very positive feedback about Patty Dunn's work at Wells Fargo (I had to check it is the same person) looking at what she did at HP, it is a serious lesson: having good record doesn't prevent you from doing evil. This is an evidence management lesson too: look at what people do now, not what they did and not what you've been told they've done.