The Consultant got the Goldmine and We got the Shaft

Not that there is anything inherently wrong with it, but going to work for a company recently put together by a venture capital outfit can present many frustrations and daunting personal challenges. The downsides can only be compounded if the newly appointed president has no experience in leading a large multi-plant enterprise and whose claim to fame is nothing more than the fact that he had some prior history with the company and had made a capital investment in it. As for the managers and employees who have not made a monetary investment, however, I am not exactly certain what the rewards are other than a paycheck and benefits. Rest assured that one will more than likely be expected to work even harder than those that have. Never be swayed by the “opportunity to earn bonuses based upon results” line in the offer letter. During the years that I spent there, we never saw a dime. Someone else, though, struck gold!

We had assembled a new plant management “team” that represented a mix of both new as well as some long-time employees of the firm. A considerable number of years of experience were represented. The general manager and plant superintendent had both been recruited from large national corporations in our business. Everyone was in their mid to late forties.

I am not certain that everyone on the team was really aware of the new ownership structure of the company. I had been apprised of the change prior to my hire as was the GM and superintendent. None of us were really given any other details. The old timers at the plant had made it through a series of ownership changes over the years and it seemed almost transparent to them. They just kept on keeping on. Someone had to keep the wheels turning. This had been an ongoing business.

The first year was really chaotic. The plant was a mess, the machinery neglected and the workforce unruly. I was hired as controller and chief administrative officer. The books were in a modicum of order but there was very scant HR or administrative support. As an amateur corporate archaeologist/anthropologist, I had noticed that at one time in the not too distant past, the operation seemed to have functioned as one would have expected for a mid-sized business enterprise. It looked like it had been a fairly well-oiled machine. As I blew the dust off the policy manuals and corporate records that I found hidden here and there, I would see the name of our president listed as one of the high ranking officers. All of the other officials were gone. What had happened here during the previous few years? It was like one of those science fiction movies where astronauts return to earth after a nuclear war to find gangs running wild in the ruins of New York City.

Our team was putting in horrendous hours. Saturdays and even Sundays were spent trying to regain control of things. We rarely saw the president although our GM continuously voiced frustration about his requests for resources being denied as well as the meddling of the president in the day to day operations. The GM was constantly bombarded by complaints from the top regarding the amount of overtime, low efficiency in production and poor quality. We were making do with what we had and even beginning to make some progress despite being on the edge of burnout. Our operation had broken even financially at the end of the first year.

It was at the one year anniversary and possibly because of it, that we were advised that a consultant had been hired by the venture capital group. The consultant was being brought in ostensibly to “evaluate” our plant’s performance and help the president drive the company. We were ordered to make ourselves available for a meeting with this guru who was advertised as having worked at one time for GE (Oh boy!). He had already met with the president and the other top officials and now it was our turn.

Al was a disheveled looking, shriveled up old codger but his presence was definitely foreboding. His speaking voice, tone and mannerisms were reminiscent of Alfred Hitchcock. That is why I’ve named him “Al.” Staring around the conference table, Al was silent as he shuffled papers and began to pass them out. No one spoke until he finally broke the silence.

“Allow me introduce myself, “he wheezed,”I have been commanded by the board of directors to help get this company on the right path. I have full authority here. I have already met with your president and we have developed a plan.” A plan! Great! Tell us more!

“The first thing you’re going to learn is the value of discipline.” The value of discipline? What could he mean by that remark? To whom was this being directed?

“I have developed a project list. These are items needing immediate attention. I expect them to be completed in thirty days. Strict adherence to the due dates is required. There will be no deviation.” Al handed out the lists. You could see the eyes of the GM, plant superintendent and maintenance manager grow large with disbelief. “How are we supposed to do all of this within 30 days?” asked the plant superintendent, “The place is still a mess and there aren’t any resources. We’re just starting to get the equipment back into acceptable condition.”

“There are twenty-four hours in a day and seven days in a week! I will return next month and expect to see progress.” replied Al, “I’ll hear no more of your excuses. You must learn to stop being “victims” and start taking control!” The meeting was promptly adjourned. Excuses? Victims? What an inspiring speech! Is that how GE did things?

After the shock of the meeting had dissipated, the team returned to the grueling hours. It was “all hands on deck.” Even the plant superintendent was seen with a paint brush in hand. The GM was rather silent during the entire period. I sensed that there had been some rather confrontational meetings between the GM, president and Al.

Around the end of the 30 day period, I was working in my office when Al suddenly appeared at my door. “Your plant has negative working capital! I’ll expect a full report!” He then disappeared. I stopped what I doing and grabbed my financial statements. I located Al in an upstairs office and detailed in black and white that we did not have nor had experienced negative working capital. “I must have misread the statements,” he replied. “You’d best keep tabs on that!” He then returned to whatever he was doing. Where was this guy getting his information from?

Interestingly enough, we never had a follow up meeting to review Al’s 30 day plan. Perhaps Al lacked “discipline” in that area? Two more months passed and our net income had remained flat. I believe that we had reached a point where there was no more to give. Or so I thought!

Al had been meeting with the president and the senior staff during this period. We were not informed of what was transpiring during these meetings but since I was the controller, I did get to see the consulting bills from Al. The fees were outrageous. But not as outrageous as Al’s next pronouncement. It was mandatory cost cutting time! The GM was forced to offer up the plant superintendent and several technical employees. Shortly thereafter, the GM himself was gone and replaced by a much lower paid plant manager. We were back to square one again and beginning to regress. Now the staff had to multi-function as well as multi-task. Everyone was stretched to the limit. It was time for another awe inspiring “excuses” and “victims” speech from Al.

The new strategy from the top seemed to be trying to bring in new business that could be produced under less than optimal conditions. This meant lots of concessions to customers in terms of pricing, give-backs, and gobs of overtime to fill emergency orders. Profits remained flat. The new plant manager began grousing about lack of resources and meddling by the president. Déjà vu! Al’s consulting fees increased.

The next time we saw Al was a month or two later when the news hit that there had been a walkout at our plant in Kentucky. These treasonous and “excuse” mongering “victims” had probably never learned the value of discipline either! After the troops were coaxed to go back to work, Al made a tour of the plants to ensure that there were no other mutinies on the horizon. Both the plant manager and I were called into the conference room. The president was there as well but he seemed disconnected from the forum. We assured Al that everything seemed OK other than the stressing out of the management, indirect labor and technical teams who were working hellacious hours to keep the business going. We did NOT want to sound like “victims.” It was at this point that Al looked across the table at me and asked, “Have you read Fish?” (Was this guy for real?) I did not answer but later handed Al the check he had requested for the prior month’s fees. It was a whopper!

Al became a staple at our plant and would now sit in on the monthly staff meetings. It soon became obvious that Al was in for the long haul. That’s when we began to notice something peculiar. He was actually dozing off during the meetings. No one dared to say a word or even tried to awaken him. We’d make several loud noises in attempts to stir him but his naps could last a half hour or so. When he did wake up, he acted as though nothing had happened. I am no medical professional but I do not believe that he suffered from narcolepsy. He was simply bored! Al was always quick on his feet, however, when it came to requesting his payments. It almost seemed that his visits were mere pretenses to make collection calls.

Al was never pleased with the financial results (no one would have been) but was totally disinterested in our explanations of the root causes of additional costs or performance failures. These were merely more excuses offered by the victims. Al’s “cures” would involve the launch of a new initiatives or programs, but there was never any mention of providing support other the definition of his latest “buzz word” or acronym. “Executing is what you’re paid to do!” would be parroted constantly by both Al and the president.

One got the sense that Al and our president had a cordial relationship but totally different ideas about how to run a company. AL would prescribe the initiatives alright but after he left, the president seemed to have his own ideas and priorities. The plant manager and the rest of us were always caught in the middle. It was like living in two different worlds.

Al had the big ideas and the president wanted to micro-manage everything and have it done on the cheap. As time passed, the company became more schizophrenic and dysfunctional. The turnover in plant management was unbelievable. We all joked about installing “revolving doors” on the office. The consulting fees kept rolling on. We could have really used those funds at the plant.

Hindsight is always 20/20. As a self appointed historian, I have my own views on what transpired at this place. As for the motivations of both Al and the president, I have my own opinions as well. I could write another entire book about it and just might at that. Those of us that stuck it out for a few years did develop a real sense of “ownership.” Our “investments” were paid in long hours, lost weekends, forgone vacations and a tremendous amount of stress. By God, we virtually lived there! It was like fighting a long drawn out war with short supplies, poor leadership and no end in sight. In retrospect, we were more like refugees than victims. As for the rewards, you’ll have to talk to Al. He’s waiting for his check.


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