We’re familiar with the term ‘entitlement culture’ to describe a generation that’s grown used to having it easy, or to groups of people who are alleged to want handouts over work. But the term also applies to business and there are entire industries as well as individual companies guilty of thinking they’re entitled to exist without making the effort to remain competitive. Who are they?
The worst example right now of an industry with an entitlement problem is the taxi industry. For decades they’ve sheltered from genuine competition under protection by government regulation. In the process, taxi owners saw a taxi license as an easy way to print money. Without the threat of competition, they let the fleet slowly deteriorate. A clean, late model taxi became increasingly uncommon. The norm became a worn out vehicle with a dirty interior and suspect noises coming from gearboxes, diffs, brakes or suspension. The air-con was rarely on, even in summer, to try scrimp on operating costs. Drivers once knew their way around town. Now, you’re lucky to find one with a reasonable level of language competency so that you can describe to them how to get where you want to go. Phone bookings became more and more unreliable and if cabs booked by phone turned up and then took another fare, a call back to the operator was met with annoyance – at their end!
Then along came Uber. In an instant, the travelling public – who really don’t give a rats about the value of taxi licenses or government regulation and who simply want to get from point A to point B with a good level of service and a reasonable price – had an alternative. And they embraced it. A superior offer was now available. The booking technology is vastly superior to the taxi industry. The cars are generally later models, in very good condition, and clean. You often get offered mints, or a small bottled water. Complimentary. The drivers are more pleasant, and it’s even cheaper.
The taxi industry’s response though was not to sharpen up its act and do so quickly. Instead, they mounted a fear campaign directed at the travelling public and furiously lobbied politicians to maintain the very regulatory protections which led them to a sub-standard service in the first place. They have even convinced some witless governments to pursue Uber drivers as minor criminals.
The taxi industry feels it is entitled to exist. It shows no sign of understanding how its service offer is so sub-standard that customers are happily leaving it in droves. It’s an example of an industry with an entitlement culture and it’s not alone. Look at our Telco sector as another example. Sure, Optus and others have been ‘allowed’ to enter the market but Telstra owns the wires and is the dominant player, still. Their pricing and service standards are a cause of widespread complaint to the point it’s an accepted joke that calls to Telstra to fix problems can take hours before anything’s resolved, if at all. But many of us have little choice, which in reality means competition isn’t working. Which means Telstra can continue to behave like a company that’s entitled to a future, irrespective of how it treats its customers.
Industry groups aren’t exempt either. Some of them are institutions with 100 years of history behind them, and in some cases that has led to complacency and to the attitude ‘we’ll always be around because we’ve been around for so long.’ But there are some whose relevance to the industry they serve is fading rapidly. Declining memberships, falling revenues, annual losses that eat quickly into reserves and quite often a new competitor who has seized on a once lucrative part of their business and simply done a better job, are all signs of industry bodies in a state of decline. Quite often, it’s also a state of denial. Their ‘entitlement culture’ will encourage them to think that someone, or something, must ultimately come to their rescue or that ‘these are just difficult times for us historically.’ Yep, that’s probably what Polaroid was telling itself too.
Smaller businesses can have the same problem. Some may have been established in their industry for a very long time. But increasingly, this matters less and less. In professional services, it’s the current crop of professionals and their reputations that matter more than any corporate history. Companies or businesses that fall back on their history as a key selling point are, I think, exhibiting signs of entitlement.
The tourism industry, sadly, is well populated with businesses who show signs of entitlement culture. Is there any other industry which so frequently argues that all it needs are more taxpayer funded dollars to promote their businesses? Other businesses just get on and do their own BD, without asking the taxpayer for help. But in tourism, there are many that seem dependent on government assistance or who look at themselves as somehow more virtuous than the next business, simply because they’re in tourism.
So what are the symptoms of entitlement culture in business?
- A new competitor is changing the rules and winning a lot of business, fast. Think Uber and the taxi industry. The same applies to innovation within industries – some will win work and thrive because of it while less innovative businesses that are dependent on past reputations may struggle.
- Deregulation of fee scales or removal of barriers to entry. Some industries and businesses are governed by regulated fee scales or by licensing rules that prevent perfectly capable competitors from competing. This is fertile ground for entitlement to breed.
- Dependence on regulatory frameworks for economic survival. Think pharmacists. Or the taxi industry. It’s endemic.
- Technology platforms that remove the power of the trained artisan and which give everyone access to a particular skill. Think graphic designers. Some have survived – because they’re very good and very efficient. But plenty have not.
- An intermediary service between supplier and buyer, which technology or society is rendering redundant. Think how email has affected Aussie Post. Bill Gates once claimed that the commerce of the internet would ultimately threaten all intermediaries who clip the ticket between producer and customer. He could be right.
No business and no industry is entitled to a prosperous or viable future. Those who have allowed an entitlement culture to take root seem to find it very hard to uproot. The path to prosperity is via innovation and constant effort in maintaining relevance and value with customers.
For those unwilling to make that effort, the clock is ticking and no amount of regulatory or third party intervention will save them in the long run.