Amazon and public administration, most and least customer centric organizations

A few days ago I posted a brief note on Linkedin where I commented on a superb customer experience I have had with Amazon. The featured image at the top is the image that went along that Linkedin note, the text was the following:

Amazon does an excellent job even when it makes mistakes. Three weeks ago I asked for a refund on one of my purchases, but since nobody had come to pick up the package and fearing that I would miss the return deadline, I have called customer service. Amazon’s answer: they are sorry for the inconveniences, they will refund the money immediately (usually you have to wait not only for the package to be picked up but also for them to check everything is fine upon reception) and they told me to keep the product I was returning. In parallel, the person who attended me has called the delivery company (in this case Celéritas) to understand what was the problem and initiate a case for continuous improvement. With this answer Amazon has turned its mistake into a success. Amazon not only takes advantage of the opportunity to continue improving its internal processes, but transforms the customer’s initial frustration into unexpected satisfaction by getting my refund sooner than expected and allowing me to keep the initially discarded product. How many companies do you know that manage their incidents so well and are oriented to operational excellence to such extent?”

Today I want to talk about a different experience that makes a point totally opposite to that of Amazon, my experience with the Spanish public administration. If Amazon claims to be “earth’s most customer centric company” I believe the Spanish public administration could be “earth’s least customer centric organization”. The story goes as follows:

I made my mind to become an independent freelance worker back in August 2017. In Spain, as an independent freelance worker, in order to be able to invoice your customers and deduct your VAT taxes, you must fill some paperwork (form 036) with the Tax Office and pay a monthly fee to the Social Security system. Since I was starting to set up my business I was incurring in quite some expenses (laptop, website, software, professional services, etc) for which I would like to get VAT refunded (since these are expenses 100% for the business), but unfortunately  I was not yet ready to start paying a monthly fee to the Social Security since I was yet to find my first customer and start generating income. It must be noted that the Spanish Tax Office doesn’t allow you to declare as business costs any cost incurred before the paperwork was filled-in, so what could I do? However I learnt about the possibility to “pre-register prior to the start of the professional activity”. Apparently this is mechanism that allows somebody to get his VAT taxes deducted as part of his business setup without being constituted as a full freelance worker and hence not yet being able to invoice any customers. This seemed ideal to me: I would be able to get the refund for my VAT taxes without having to pay the monthly fee to the Social Security system. So it was August 30th when I went ahead and filled-in all the paperwork online, taking care to mark field 504 in the form so as to make it a pre-registration as shown below (sorry, its in Spanish but that is basically what field 504 says).

This is what I had done until last week, when on November 23rd I finally had decided that it was time to fully register as an independent freelance worker so as to be able to generate invoices. The funny thing started when I visited the Tax Office agency and they told me that there was no need to do anything as I was fully registered since August 30th. To my amazement the ladies attending the office explained that pre-registration was no longer an option since a couple of years ago, and although field 504 still remained in the forms it no longer had any use. I was certainly puzzled, how was it possible that customer facing forms contained outdated and misleading information? how many people had been confused by filed 504 in the last couple of years? The fact that pre-registration did no longer exist but they had “forgotten” to remove that option from the form meant that I had been in an illegal situation for almost three months.

Since I was decided to get done with all the paperwork, I tried not to complain too much and plunged ahead into my next stop at the Social Security office, but only to grow my disappointment. At the Social Security office they explained that since the official register as an independent freelance worker had been three months ago and I hadn’t paid those fees, I would be fined and wouldn’t be elegible for the entrepreunership promotion policy I was hoping to benefit from. “No, no, no” I complained, “you don’t understand this is all an error due to one of your forms not being updated”, “I need those entrepreunership promotion benefits!”.

Much to my dismay the Social Security agent insisted there was no way around this bizarre situation, and there was only one remote option: talking to the Tax Office agent and cancelling my registration all together. Now totally bewildered I packed my papers and went once again to the Tax Office building hoping to get some common sense into all this. But I was not lucky. I was diligently informed that cancelling my registration was a complex process that would take months before anybody even looked at it, and in the meantime my illegal situation would only get worse with ever growing fines. The only viable alternative consisted in de-registering, a process that was immediate but different from cancelling the registration, and which decreased the chances of being elegible for the entrepreunership promotion benefits.

I finally accepted the de-registration option, what else I could  do? So I signed the de-registration paper but wait a minute! When I thought that I had experienced all the craziness of the Spanish public administration, there was a final surprise reserved for me. The de-registration form that I was signing was effective since August 30th, the very same day when I had initially registered by mistake three months ago! Now nothing made sense anymore! Why on earth would they make me go through all those troubles if they are able to do actions dating back to the past? And suddenly it became clear to me that the root problem are not the faulty forms nor a deeply bureaucratic organization, the root problem is a total disregard for its citizen customers.

I would like to think what Amazon would have done in a situation like this. They probably would have acknowledged their mistake, apologized to me and taken note to correct the form immediately (in fact they would have corrected it a couple of years ago when the first confused citizen used field 504). Probably they would not only have made it easier for me to register with the special Social Security policy, but they would have also granted me a couple of free monthly fees in exchange for all the inconveniences. We certainly need more Amazons in the world, not because of their size or business model, but because of their customer focus. Last week at the Tax Office it was not only me the one who lost something, my clients lost since they will have to wait a few more weeks until I get my papers fixed, the public administration lost since they ignored a possibility of improvement and didn’t create a new freelance job, and we all lost as an increasingly complacent and incompetent society. I certainly refuse to accept this and will continue fighting against it, in the mean time it might be better to take it with a healthy dose of humor.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

About me

Jorge Díaz, consultant specialized in Operational Excellence applying the principles from Lean, Agile and Process Management. More about me.

Cube of Good Management

The Cube of Good Management is a comprehensive and easy to apply Operational Excellence framework that you should start using today in your organization. Learn more.