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Knowing When To Say Nay

Posted On: 8/24/2009

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Vending, vending business, vending route, vending machine, coin-operated, coin-op, automatic retailing, coffee service, office coffee service, Tim Sanford, Vending Times

One of the more durable modern myths is that pioneers always have had to overcome a horde of "naysayers," know-it-alls who said that the thing could not be done and sticks-in-the-mud who said that it shouldn't be. We grew up believing that "they all laughed at Christopher Columbus/When he said the world was round," and that the Wright brothers required immense perseverance to keep on inventing the airplane amid a general chorus of skeptics jeering that, if man had been meant to fly, he'd have been born with wings.

The reality was different. In fact, everyone in 1492 who had studied the question at all believed the world to be round. Opinion differed about its circumference, about which the "naysayers" were right and Columbus wrong. And while the Wrights certainly needed all the perseverance they could muster, this was not because no one believed that manned flight was possible. Informed opinion was that it was just around the corner. There were many people who didn't see any reason to do it, and a few who thought it would be a mistake, but hardly anyone believed that it couldn't be done.

We think it's important to keep this in mind as we adjust to radical changes in the marketplace. Of course, we've adjusted many times before, and each episode was different -- but, perhaps, not as different as the situation today. It strikes us that a distinctive feature of the present challenge is the marked absence of people saying "now, wait a minute!" loudly enough to be heard.

Good new ideas generally have proven themselves by making steady headway with people who believe that what they presently are using is entirely satisfactory. Or, perhaps, better: The challenged technology always had its defenders. A quarter of a century into the solid-state electronics revolution, there still were informed audiophiles who championed the vacuum tube against the transistor, claiming that it introduced less noise into the signal.

This conservatism often has frustrated forward-thinkers, but we think it has produced good results on balance. Healthy skepticism impels the innovator to demonstrate the superiority of the new thing. This usually has entailed finding someone willing to give it a try, and prepared to publicize the results.

Under normal circumstances, too, the innovator is called upon to answer questions, often in the form of objections. In retrospect, these often are disparaged as resulting from an inability to recognize an opportunity that will inconvenience the adopter. However, they often have identified genuine problems, and those problems may remain in the background even after the consensus has shifted in favor of the innovation and the benefits it confers.

The point is that solid progress requires not only innovation, but also resistance. The resistance refines and polishes the invention, and often inspires developments that increase its beneficial effect.

Up until recently, large organizations had a certain depth of management, cadres that were thoroughly familiar with the organization's customers and its resources for meeting their needs. These people often were abused by outsiders for their supposed preference for business as usual, for doing things the way they always had been done. That abuse often was warranted; but not always, and the issue seldom was as clear-cut as the forward-thinkers claimed. Much reluctance to change was based on a well-founded concern that the new methods would blur the focus on existing customer relationships, weakening existing business with no real promise of building something better.

The approach to management that has found favor over the past decade or so seeks to replace those experienced cadres with teams of eager young managers with solid track records, temporary task groups formed to achieve a particular objective and then to dissolve. Like many concepts that came along at the change of the millennium, this one is able to produce quantifiable short-term results. However, we are more and more concerned with the longer-term damage it can do, which often is very real, even if unquantifiable. When customers no longer know with whom they should speak, they are more susceptible to buying somewhere else. Anyone studying the erosion of customer loyalty of which marketers have complained for the past decade might start there.

In short, there are good reasons as well as bad ones for resisting change. The bad ones have received far more attention: Operators resisted coin changers because they did not want to tie up cash in change funds, they resisted bill changers (and microwave ovens in non-food locations) because they were averse to buying equipment that patrons could use for their own purposes, without paying for the privilege. They resisted glassfront snack machines because these would require them to inventory four or five times as many items, without gaining four or five times the volume of sales; they resisted handheld route computers and automated data retrieval because their drivers did not want to give up their familiar route tickets. The mistake in all these cases was to attend only to the difficulties, while underestimating or ignoring the benefits. It must be said, though, that the industry has not been particularly successful at adjusting its commission and pricing policies to reflect the added service represented by those expensive enhancements to customer convenience and choice.

The good reasons generally cannot be assigned numerical values, so they usually are overlooked in this age of spreadsheets and "metrics." During the persistent alarming inflation that characterized the late 1970s, expert speakers at industry conventions naturally advised operators to adopt policies that took into account the erosion of the value of a sum of money over time. One of these presenters quoted a Wall Street Journal headline that had reported, "Slow Pay has Become a Way of Life," and advised the audience that it could be helpful to take full advantage of the supplier's terms -- if you were allowed 30 days to pay, you should take 30 days, because the money would be worth less in a month. We overheard two operators discussing the session afterwards; one of them said, "You know, that makes sense; but it's not the way my father taught me to do business." We think suppliers would prefer to do business with clients who thought that way -- if those suppliers still had an echelon of managers who recognized and appreciated the old belief in commercial honor.

We would be surprised if, during the financial services industries' rush toward the edge of the cliff, more than a few experienced risk quantifiers and loan officers had not said, "This would be a really dangerous thing for us to do" -- or, at least, thought it. We imagine that those who said it were derided for refusing to leave their comfort zones and think outside the box. We hope that the survivors have learned from this.

The continued arrival of new technology has confronted all of us with recurrent invitations to leave our comfort zones. It almost always is worth doing that, if one is prepared to understand what is on offer and how it can confer value. If a new thing is to do that, it has to deliver a benefit to the customer. The new toolbox available to operators certainly has the potential to do that, both by giving patrons greater confidence, better choices and added convenience, or by making the operation sufficiently profitable to continue providing a valued service. This payoff is the reason to innovate, without regard for what others may or may not be doing.

Managers certainly will do well to know how to leave their comfort zones, but the goal of doing so should be to make one's customers more comfortable in theirs. The ideal is an open mind and a keen imagination coupled with healthy skepticism, close attention to customers and a firm grasp of the principles that do not change. There is a profound need today for those proverbial Missourians who said, "Show me."