Honey, We’ve Shrunk the Company!

I just heard from my old pal Joe P. He’s still with one of the outfits that I worked for several years ago. I sometimes feel sorry for Joe and worry about him. He’s a good solid manager and extremely hard worker but he just can’t get out of there. Seems his lack of formal education and company specific expertise has kept him sort of trapped in a niche business. Joe doesn’t appear to be too worried though. He’s in his late 50’s and his kids are grown and married. Joe always said that if push came to shove, he would get a job running a lathe somewhere. His needs are simple and he claims that all he requires is a “living wage” and medical benefits. Is it the truth or wishful thinking? I don’t know. I do know that Joe got screwed over by his former employer (a family owned and operated business) where he worked for 20 years before coming to the firm where we met. I could tell that he felt somewhat humbled and even a bit shamed by that experience. The irony of it all is that he had no control over the circumstances that led to the collapse of that company. I guess he’s just that type of guy. Joe recovered his pride. He learned his lesson and set about a plan. Since that event, Joe swore to sock away every penny he could. He paid off his house and has a nice nest egg put away. I think he’ll be OK.

So now on to Joe’s report. I’ve written several stories about this place in the past: very poor leadership, ever changing (or no) direction, everything done on the cheap, tremendous debt load, revolving-door management, lack of cash, constant meddling, expensive consultants, etc. Get the picture? It started out as a mid-sized and multi-unit corporation and there were big plans. Now it’s just a mere shell of what it once was. According to Joe, the latest scheme seems to involve the sale of several of its capital assets as well as its only profitable finishing operation, albeit a small one, to raise cash. What a pathetic turn of events but not at all unexpected given the ineptitude and arrogance of senior management. I checked it out through some channels and what Joe tells me appears to be true.

Strange thing though, Joe reports jubilation in the executive offices. Perhaps they’ve paid down the debt and even repaid some of the investors! The CEO and Treasurer can’t stop beaming and patting each other on the back. The shameless self-congratulatory banter seems to go on and on. It’s like being proud to have sold the family heirlooms to pay off credit card bills that were run up for expensive vacations, foolish investments and other intangibles or worse yet, to have sold your family’s generations-old mansion and move into a small apartment for the same reasons. A stroke of genius!

Bah! Who needs a big and unwieldy company to manage? Let’s keep it simple! We need to concentrate on what we do best. Back to basics! We’ll be back on top soon! Knowing these characters as I do, I’ll bet the rationalizations are flowing like the executive cappuccino machine. These were the “no excuses” people; the brilliant leaders who berated and brow beat the managers, refused to listen to anyone and always had a bushel basket of snappy answers. I wonder what snappy answers they gave to the employees of the operation that they sold down the river. Maybe those folks – those who survive the sale anyway – will find themselves in a better place. I hope so. These were good people. Speaking of the executive staff, I understand that they’re all still firmly entrenched and as comfortable as ever. They have no intentions of downsizing their lifestyles. So what if the corporation continues to shrink into oblivion. It’s not like it’s their fault.

I asked Joe how long he thought the place might keep going. He wasn’t sure but commented that he couldn’t see it lasting more than a couple of months. I don’t know enough about their finances to know what’s really going on. I will predict that these same “leaders” will eventually move on to enjoy hefty salaries and lofty positions with different firms. They are heroes you know. They’ll commiserate with other executives at their new establishments and share stories about how the employees at their old companies let them down, couldn’t see the big picture, couldn’t execute their brilliant strategies, etc. They’ll probably even play off their newly acquired “expertise” at closing down operations, disposing of assets, etc. Then they’ll be allowed to work their magic all over again.

I wonder when the garage sale will occur? Maybe they’ll sell the forklifts and office equipment to help fund their exit packages. It’s a shame but predictable because they have no shame.