The customer is always right

One of the adages often proclaimed in marketing is: "the customer is always right". An often heard objection against this is that bowing to every whim of customers would make it very hard to achieve organisational goals, i.e. to make a decent profit.

To find out what this actually means, this statement needs to be unpacked and analysed.

There are three aspects to this statement: the customer, the qualifier "always" and the the idea of being "right".

For this statement to make sense, the term customer - refered by some as the 'c-word' - needs to be closely demarcated, or in marketing jargon: segmentation. Market segmentation is, however, an artificial construct.

Russell Haley argued decades ago that demographic variables are poor predictors of behaviour as they are determined post facto and rely on descriptive, rather then causal factors. This implies that the statement should actually be "a customer is always right" - narrowing it down to individuals, rather than all or some customers.

Second part of the statement - 'always right' - seems to refer to a universality. Whatever a customer says, truth is on their side. However, truth is a tricky concept, specially when combined with a universal statement. The way out of this conundrum is to find out what a customer can be right about.

• A fact: There is a fly in my soup
• A feeling: I am angry because there is a fly in my soup

Customers can certainly wrong about facts because they are by their very nature verifiable. A waiter can confirm whether there actually is a fly in the soup or whether it is a oddly shaped croûton.

The second type of statement is much harder because it is, in the words of Bernard Williams, incorrigible. A proposition p is incorrigible when it satisfies this description: if I believe that p, then p. These statements can neither be verified nor denied, but, assuming the customer is sincere, they have to be true.

So, assuming a customer is sincere, they are always right about when it comes to incorrigible propositions. This is problematic because of the implied sincerity. Of course, some customers might exaggerate their feelings in order to obtain preferential treatment. Many psychologists would argue that nobody can be sincere about their feelings. In this respect, see also my column about personality tests. Or in the words of Gerard Manley Hopkins:

O the mind, mind has mountains; cliffs of fall
Frightful, sheer, no-man-fathomed.

Although customers might not always know or able to express their state of mind, incorrigible statements are absolute truths to those who utter them.

The customer is always right about their own state of mind and the marketer has to accept these statements as absolute truths.

The truth of Pi

My idea of a great time: smoking sheesha in Egypt, wearing my favourite T-shirt (ThinkGeek.com).

The print on the shirt consists of the first 4,493 digits of the number Pi in the shape of the symbol itself.

The number Pi, not the number 42 as some have proposed, symbolises the ultimate truth of the universe. Let me explain why.

On the way back from Egypt I watched The Oxford Murders. In this movie, the question whether mathematics is the underlying truth of the world is discussed between the two main characters. Martin, a student played by Elijah Wood, said:

"Things are organised following a model, a scheme, a logical series. Even the tiny snowflake includes a numerical basis in its structure. Therefore, if we discover the secret meaning of numbers, we will know the secret meaning of reality."

But is Martin correct? Can all philosophical questions and truths be expressed in mathematics? Will we eventually calculate our way out of ethical dilemma's? Can we improve our understanding of Shakespeare by expressing his prose in formal language?


I tend to agree with Professor Martin Seldon, played by John Hurt in the same movie:

"Since man is incapable of reconciling mind and matter he turns to confer some kind of entity on ideas because he can not bear the notion that the purely abstract only exists in our brain."

With this in mind, why does the number Pi reflects the ultimate truth about the universe?

Pi is an irrational and transcendental number and the digits of which it is composed comprise an infinite array of random numbers. Even after calculating billions of digits, there does not seem to be any pattern in the arrangement of the digits. It is this lack of any pattern, the absence of logic, that illustrates the structure of the universe itself.

Pi is an artificial structure of our mind, not something existing in reality. Nature doesn't care about perimeters and diameters, although it might seem that the ubiquitous nature of Pi seems to suggest differently.

Pi is an important number in physics and is included in many formulas. This implies to me that there is something inherently random in the structure of reality.

However, we perceive our environment in discrete terms. Common sense mathematics does not include irrational numbers such as Pi. We think in whole numbers and fractions. This is reflected in the fact that in ancient cultures, Pi was perceived to be a fracture, such as 22/7. This is the value that I use in my own calculations as it is accurate enough for almost all computations.

But the number Po is ubiquitous in mathematics and physics. We rely on an irrational numbers such as Pi and e in much of our modeling of reality. What does this say about the structure of reality? I d not have an answer on this, but for me, the existence of irrational numbers shows the great divide between common sense and our scientific description of the world.

Know Thyself

One's own is well hidden for one's
own; and of all treasure troves, one's
own is the last to be excavated . . .

Friedrich Nietzsche, Also Sprach Zarathustra

The importance of self-knowledge has been acknowledged through the ages and across cultures. A visitor to the temple of Apollo at Delphi in ancient Greece was commanded to "Know Thyself'' and Chinese philosopher Lao Tzu wrote that "self-knowledge is enlightenment''.

Self-knowledge is different from knowledge of the objective world. It is, by definition, subjective and is thus not easily obtained, as illustrated by the epigraph. Sigmund Freud and Carl Rogers, two of the most influential psychotherapists of the last century, theorised that people have a hidden personality of which they are not aware. It is this hidden, subconscious, nature of personality that creates epistemological hurdles and makes self-knowledge a difficult to obtain treasure.

Many different psychometric tests have been developed to determine a subject's personality or other aspects of the self. These tests are used in clinical settings and research, but are also widely used for recruitment and leadership development.

For my MBA studies I was asked to undertake a battery of personality and motivation tests in an attempt to improve my self knowledge. The main question to be answered is whether this myriad of numbers and classifications actually describe me as a person and whether they can provide a deeper self-knowledge to enable me to be a better manager.

Numerous studies have shown that psychometric tests can be used to make predictions about behaviour of individuals and job performance. There are, however, many situational variables, such as organisational culture, which influence behaviour and research indicates that personality plays the greatest role in situations where there are no social clues on how to behave .

Some of the often used methodologies are scientifically problematic. There is little empirical evidence to confirm the validity of the Myers-Briggs Type Indicator. Also for Theory X/Y and ERG Theory there is little or no evidence to confirm the validity of their assumptions.

Problematic aspect of self administered psychometric testing is a high level of inherent confirmation bias, also known as the `Forer Effect'. Am I really very conscientious, or do I perceive myself to be conscientious? Am I really an extroverted person, or is it my high level of energy which subjugates any innate introvertedness? Do the results of these tests provide a picture of my inner self, or are they a reflection of my perceived self?

The test results do not actually reveal any information beyond what has been entered by me, because the results are only a linguistic rearrangement of the answers. This is confirmed by recent research that showed that most people are able to guess the outcome of personality tests without actually undertaking them.

Comprehensive self-knowledge can thus not be obtained by completing surveys because they can only reveal the perceived self and are not capable of unearthing the inner (subconscious) self. Psychometric tests are suitable only as a vehicle for introspection, providing an entry point for reflecting on one's self. This introspection can, however, not occur without life experience to reflect on.

Obtaining self knowledge, considered essential for leadership development, requires something deeper and more substantial, as alluded to by Nietzsche in the epigraph to this blog entry. As our behaviour is predominately controlled by situational variables, the only way to obtain self-knowledge is life experience.

Only by being exposed to a multitude of situations and challenges can we know what our personality actually is. As we gain life experience, our inner and perceived selves slowly converge. Maturity is the situation were the inner self and the perceived self are almost identical and self-knowledge becomes apparent. Even the most carefully designed personality test can not leapfrog the knowledge obtained through life experience. Carl Gustav Jung, who inspired development of the MBTI recognised this when he wrote:

"Anyone who wants to know the human psyche ... would be better advised to abandon exact science ... and wander with human heart through the world.''

This foray into psychometric testing leaves me to conclude that no psychometric test can ever replace the fullness of life experience to obtain true self-knowledge. Experiences such as exposing oneself to a challenging situations, occasionally exploring the boundaries of morality, experiencing different cultures or going through emotional turmoil are the only meaningful ways to gain self-knowledge.

The end of magic?

I have recently purchased a facsimile copy of Reginald Scott's The Discoverie of Witchcraft (originally published in 1584).

This is an important book in the history of Western civilisation as it is the first ever book in which methods for creating magic are explained. This might seem an overstatement, as magic is nowadays a trivialised from of theatre which barely has any influence on the way we think.

Scott's book is important because it was the first time somebody openly challenged the belief in witchcraft and supernatural powers by exposing conjuring methods. The book contains some interesting magic; there are pictures of trick knives that make it seem like you are cutting your nose or finger. The picture on the left shows a contraption used to create the illusion of somebody's head being severed. There is also a description of a Magic Colouring Book, which is still used in children's magic shows and many other tricks still performed by contemporary magicians.

The book was published in the Renaissance, a period which heralded Western culture as we know it today. Although many people see the renaissance as a period where Europe emerged from the Dark Ages, some do not see this as a positive development. Dutch historian Johan Huizinga, for example, questioned whether the renaissance was a positive change and argued that it was a period of decline from the High Middle Ages, destroying much that was important.

One of the important things that was destroyed is a sense of magic and The Discoverie of Witchcraft illustrates, if not helped the cause, this development. It might seem strange for an engineer/philosopher like myself to argue that dispelling a belief in magic would not be a good thing. Magic is, however, more than a simplistic belief in supernatural forces that control our lives.

Magicians have been part of human civilisation for as long as there are records - and possibly as long as human culture exists. There are many anthropological accounts of medicine men and shamans using conjuring skills as part of their healing and rituals. Most magic history books interpret this use of sleight of hand as an attempt by the shaman to obtain power mischievously. But there is much more to magic than one person gaining power over others.

Magic is a psychological force - a means to understand our position in nature. Although some might argue that magic has been wiped from contemporary culture, it has never actually disappeared from our psyche. Simple acts, such as writing your name on a wall are in fact magical. To some this is a simple act of vandalism, but that is not the real motivation for people to do this.

Writing your name on a wall makes the wall becomes an extension of yourself and you become part of the wall. It is a way to exert our self onto the world. This is I think the deeper psychological reason for the popularity of tagging. Tagging is a way to impart part of your self onto the environment in which you live. This is in essence an act of magic because it is a way to connect the inner world (psychology) with physical reality. There is no rational reason to write your name on a wall

There are many more examples of non rational behaviour; why do we prefer one brand over another? Why we choose one political party or football team over another? When analysing motivations in every day choices we see that people often cross the horizon of reason and this is the realm of magical thinking. Magic, as a psychological force, is still alive and kicking in a hyper-modern world.

Why study an MBA?

I have asked myself several time why I should drag myself through this course as management is not the most invigorating line of study I can imagine.

Only last year, I have completed my arts degree, specialising in philosophy and sociology, with a smitten of psychology. As an elective for this degree, I studied one unit of Strategic Management and became very interested in the work of Henry Mintzberg, specially concerning his line of inquiry regarding the usefulness of formal planning systems as a sufficient or necessary means to improve company performance.

In a recent book he argues against the whole idea of an MBA as a prerequisite for senior management (Henry Mintzberg, Managers, not MBAs, Berret-Koehler, 2004).

Am I wasting my time? Is an academic education useful in managerial practice?

My philosophy studies have strongly influenced my thinking about good management and has moved me from a systems (Taylorist like) approach to a more human resource focussed perspective. Management is a social science through and through and I am treating it as such.

I have argued previously (Prevos, 2005) that: "an organisation can not rely solely on formal systems to develop corporate strategy. Although empirical research points towards a positive correlation between strategic planning and company performance, these studies suffer from some methodological problems. Because strategic management is not an exact science, strategy formulation requires a great deal of intuition and company performance relies to some extent on serendipity. This does, however, not imply that strategic planning as a formal exercise is futile. Strategic planning is vital for good management of an organisation. Not as a means to plot the course for years ahead, but as a way to be able to anticipate the unpredictability of external influences".

I think this sums op Mintberg's issue with an MBA - no education can teach intuition, creativity, insight and so on. But I hope that it will certainly help in shaping my ability to make better decisions. In the end, nothing is more practical then a good theory :)