ROGERS OUTAGE – Part II: Cultural Assessment and the Root Cause

This is Part 2 of Rogers Outage Assessment by End User. Read Part 1 – The Five Forces of Oligopoly – here.

When visiting a new country, one can instantly gauge the level of trust between the population and the government, just by watching people how on the street interact with the police. Similarly, the general level of culture of a nation can be judged by the cleanliness of public toilets.

When getting to know a company, the best way to evaluate the quality of management is to attend their meetings. And to measure the overall level of employee engagement – call their help desk.

There is yet another parameter that explains and forecasts business performance. I will share it later on – to check my initial conclusion.

That would be my short version of a cultural assessment. Compared to the last-century Porter’s Five Forces strategic analysis (see Part 1), this approach – an honest cultural assessment, albeit a short one – has a better chance of predicting Rogers’s business performance as well as pointing out the root cause of the organization’s problems.

As I was not invited to any of Ted Rogers’s or Tony Staffieri’s meetings, I decided to call Rogers Customer Support and ask if the invitation could be arranged.

For starters, it took me some time to find the right phone number. Rogers’s web pages offer a wide range of AI, generously decorated with AH (artificial hospitality), but human presence is hard to spot. If you follow the AI lead, very soon you will find yourself pulled down the rabbit hole stuffed with “saving” offers –­­­ but without the human presence.

Even after I found the support number, I still had to go through the rabbit hole exercise – now led by the artificial intelligence of their convoluted call-answering system.

My fault: I dropped my first call after 2.5 minutes because the “SMART Caller ID” on my phone indicated the number dialed as “Chatr Mobile.” What  … ?! I had to look for another number, and this one showed as “Rogers United States.” Well, … OK… Here Rogers’s AI kicked into action right away, and I was told twice(!) that Rogers cares about customers and decided to “increase the value of the credit” for the recent outage inconvenience.

After another 2.5 minutes of multiple choices and advertising, the system graciously conceded to connect me with “our 100% Canadian-based solution specialist.” But not so fast! As a long-time Rogers customer, I have noticed that Rogers customer service is “currently facing high call volume” far more often than is acceptable for a major carrier, resulting in very long waiting times… I decided that I already had enough information for this assessment, and I’d better spend another five minutes searching for basic corporate information on the Rogers website.

In all, the twelve minutes spent on this cultural assessment is a fair price to pay for finding the root cause.

Let me summarize what I have seen.

  1. I could not find any official Mission, Vision, or Purpose, but it is obvious that Rogers’s focus is on finances. They have been cutting costs across the board, often in the most primitive penny-pinching manner. This observation comes up in every interaction with Rogers. They cut the number of call-centre agents even though these are arguably their least-paid employees. Apparently, they had tried to outsource the service to some “cheaper” country but that did not go well with domestic clients. Now they are “proud” to hire remote workers with a Canadian accent.
  2. The “Chatr Mobile” caller ID is another subtle but telling sign. Chatr was Rogers’s “fighter brand.” About a decade ago, the government made a feeble attempt to open at least some competition in Canadian telecoms – and Rogers created this subsidiary with the sole purpose of fighting new entrants, all in line with Porter’s model. When the new entrants were eliminated, the brand was retired, customers converted to Rogers, and the phone number was connected to Rogers help desk.
  3. Rogers pledged to credit customers for “up to 5 days of service,” and that news was played to me twice to make me twice as happy. Using my average self for calculation, I would expect Rogers to pay me $2.50 for one day without service. Not much, especially for those who could not work from home or call 911. The expected compensation is more indicative of Rogers’s innate frugality than of customer care.
  4. The total compensation promised to approximately 12 million Rogers customers will amount to $50-100 million for the entire outage, i.e. will not affect Rogers books at all. It is roughly equivalent to the compensation Rogers Corp. has paid to its CEOs over the past three years.

All the above is not surprising, given that Rogers’s current CEO is a purely financial person. Tony Staffieri’s appointment as permanent President and CEO in Jan. 2022 (he was interim since Nov. 2021) was the final touch in turning what could be considered an engineering and hi-tech company into a money-making venture. In a way, Staffieri confirmed that himself by pledging to “remain focused on driving shareholder value.”

Shareholder primacy! This is the root cause of Rogers Communications’ recent outages.

For years, Rogers’s focus has been on the “shareholder value” and not on whatever they promised their customers. All “technical issues” that Rogers and CRTC will probably present as the “root cause” in the coming months are a consequence, an effect. Still, more “disclosures” are likely to follow, as Rogers will be trying to keep public attention away from the real problem.

The good thing is that key the events of this story are predictable because we have already witnessed the demise or infamy of the likes of GM, GE, IBM, and recently Boeing. History repeats itself: multiple downsizing, replacing permanent staff with eternal “temporary” employees, the nomination of CFO to the top position, exorbitant C-level compensation… Even the second (in just over a year) outage itself was predictable.

Inspired by Milton Friedman over fifty years ago, this business “culture” focused on shareholder value has made many individuals obscenely rich at the expense of millions – billions! – of people. It has led to disasters that affect the entire world: Climate change is a prime example of its ultimate outcomes.

But back to Canada:

Do we know if there’ll be another outage, and what comes next altogether?

Rogers has already predictably fired the CTO, and probably more sacrifices will follow to atone for sins – and to secure the long-awaited Shaw merger that will ………  Are you ready to place a bet?

Another question for you to think about, and to contribute to this assessment if you are currently a Rogers employee:

Peter Drucker advocated a “top-to-bottom” ratio of not more than 20 :1, otherwise, resentment and falling morale are inevitable and it is “difficult to foster the kind of teamwork and trust that businesses need to succeed.”

I believe the lowest-paid Rogers employees receive under $30K per year.

Do you have an idea of what the actual CEO-to-worker pay ratio is at Rogers today?

If not done yet, please share your educated guess in this poll:

This is the killer parameter I promised to share, a.k.a. the Drucker principle. It is amazing how precise and predictive this principle is.

Continue to Part 3 to know what to expect next.