(Business after 2000)
What Future Are We Making for Ourselves?
Copyright © 1997, 2000, Dorian Scott Cole
What Does a Writer Know, Anyway? | The Keys to Business Success Y2K+ | Know Who Runs the Company | What Is the Mission of Business? | Preparing for the Future | Managing Projects and Development | Process Management Always Produces Acceptable Results | Objectives and Priorities | To Really Screw Things Up, You Need a Computer | Working with Attitude Problems | A Case Study of What We Are Becoming | Business Story Ideas |
What Does a Writer Know, Anyway?
Is this just some bozo writer talking here - what do I know about business? In 1992 I had been managing a region1 for seven years for one of the oldest and ten largest businesses in the US. I set in motion some concepts similar to the "Open Business" and "Losing Control" concepts making the rounds today. (I have since managed marketing at another company, as well as writing assignments.)
When I began managing, I listened to employees tell me that the company had all the money in the world to spend because it was making gigantic profits. I knew the division was barely profitable. Two percent of our income was often the difference between profit and loss and the company could decide to shut down divisions not making an adequate profit. So I made those same individuals responsible for the profitability - not the income, not the costs, not the ratio of income to cost, not the margin of contribution of the division - but the actual profitability including the entire corporate overhead. I included those figures in their territory income reports. Their attitude changed. Profitability rose.
I made groups of people who actually used inventories responsible for selecting and replenishing inventories that would properly operate the business. We stopped having inventory problems. I made people responsible for their customers and responsible for covering accounts in their absence. Customer satisfaction became our highest priority. We stopped having fusses over territory coverage and customer satisfaction rose. I got realistic assessments of the time required to manage territories and staffed so that people had time to invest in growing the business. We stopped having burnout and attitude problems, and people became more productive and actively sought new business. I hired two thirds of the people and they all became level one and two performers (one is highest). When problems came up or when we needed to create a marketing plan, I brought the field people in to devise one. People started doing business realistically.
In a saturated market, during double-digit inflation, in the face of increasing competition, we grew the business. We cut the field inventory 50% without sacrificing quality. Financial contribution increased 25%. What model did I use for running a business? I had many to choose from. I have read business books written in the thirties, fifties, turn of the 19th. century... the problems faced by managers then are the same faced by managers now. Business is the world's second oldest profession. We still have the prostitutes, swindlers, and the Scrooges. We still have the tycoons who want to own and run the world, including slave employees. We still have open bartering. We have case study models, sports game models, jungle models, and war models.
The concepts I used for a model weren't buzzwords to be given lip service. I made it my challenge to make business work properly. What concept did I use? The concept I used was to treat employees with respect and like they were responsible for the success of the entire business. I treated customers like we were there to serve them. But, I'm just a writer, what do I know? Upper management trotted in one day and said, "We're changing the corporate culture to empowerment." I privately wondered where they got the first clue. "Open Business?" "Losing control?" - the buzzwords of the late nineties - hmm, what novel ideas - they should have been onto them fifteen to a hundred years ago.
On the off chance that I might actually know something about business, I offer a few bits of general advice. If someone is thinking about going into business, maybe my words will help them avoid falling prey to the strange and not human strategies commonly circulating in the business world. Now, I know nothing ever fits every business. Retail is nothing like selling capital equipment, and neither are like selling services or software. The attitudes and educational levels of employees have as much to do with the way that employees are treated as the whims of the manager. But still, some things work better than others.
Managing versus addressing a concern. "Empowerment" addressed a concern in business: making downsizing work. Suddenly everyone had "responsibility." Someone discovered that when people are given the responsibility to get things done, the things get done. But no one discovered that people aren't machines. The destructive legacy continues today - more responsibility leads to more work, which eventually leads to burnout. Giving people responsibility is only half the key. People who are given responsibility will work themselves to death, get attitude problems, burn out, and then leave and take the business with them. I've seen it happen several times.
A manager has to look at the task at hand and determine how best to get the work done. Some managers instead of looking at the task, simply watch the clock, expecting everyone to start earlier and leave later. There is never enough time under his paradigm - no matter how much you give to it, it can't all get done on that manager's schedule. In one industry I was working all day, often all night and all day, and frequently all weekend for over a year. I never hesitated to put the time in - I'm a "can-do" person who always gets the job done - but these managers have no conception of what it means to manage a project. Throwing time at a task is no substitute for managment.
Managers plan and control work - or else the work controls them and everyone around them. I'm always amused when a manager comes out of high level meeting chanting, "Times are tough - everyone has to work longer hours to get the job done," and then starts watching his watch. At one position, a manager who watched the clock and thought he was a master of strategy and of prioritizing, set the priorities for everyone and slowed me down to about a fourth of my usual output and prevented much from gettin gdone. He lost all credibility and did untold harm to the business. Sure, sometimes people have to put in more hours to get work done in time, but now when someone starts talking about sacrificing yourself to the altar of business, I just walk away - no stomach for unproductive and destructive nonsense.
This all says something about incomplete theories of management. Management isn't about getting people to do things - sorry Drucker (his early work), that's a short term view. Management isn't about weeding out everything but excellence - sorry Peters, excellence doesn't necessarily translate into long term profitability. Management isn't a game - sorry to too many to mention. Management is about understanding business and trying to serve the long term interests of customers, employees, and stockholders. Leave one out and the equation becomes unbalanced and sooner or later business fails.
Even doing these things doesn't always ensure success. The short-term warrior is the epitome of special concerns, and he doesn't build long term businesses. I reported to one National Manager who even had customers, employees, and stockholders firmly in perspective. But he was a two-year micromanager - he expected people with responsibility to check and double-check every detail of every task to make certain it was done properly. There was no trust. People were guilty of failure until proven innocent. Very effective in the short term. In the long term, everyone turned away from him. Short term warriors move faster than their mistakes, but they leave behind a rich legacy of personnel and customer problems that continue to destroy the business long after they have left. In business, the two-year achievers need to manage projects, not the business.
As markets stop growing, and competition from other countries continues to increase, the mis-managers will be doing the same old things they have always done - pushing people to do more for less to keep prices down to keep sales up. The smart managers will be letting their people find effective ways to create and sell the product at competitive prices, while ensuring they are backed by good management planning and have the opportunity to get rested and happy.
The best competitive strategy is not, "Me too." Delivering the identical goods simply guarantees that everyone in the market will get minimum income, or less. The best competitive strategy is differentiation, "Here is how our differences meet your needs better." Offering something better means you can get more for your product - maybe not a fortune more - cost is always a factor (and sometimes the only factor) - but enough to keep the business profitable.
We are in a highly competitive world market that puts intense pressure on prices, which in turn puts intense pressure on profits. It has been a great 30 years for investors. Accustomed to high profits during the double-digit inflation of the seventies, and the profitability created by corporate raiders in the eighties, and the technology driven bull market of the nineties, and the Internet miracles of the late nineties, investors watch every business and market move like a hawk. They put intense pressure on business to watch the bottom line every quarter (profit every three months), and many of them are in a daily dialogue with management, scrutinizing every management decision for instant profitability for themselves. Investors that want instant profits can't be allowed to run the business - they don't have the long term interests of the company in mind. The wrong kind of investor has been attracted, and other investors need to be courted.
It's no wonder business has turned into a numbers game with making a profit for investors the ultimate goal. Investors have forced that focus. Yet to see making a profit for investors as being the business's primary mission is like seeing a flag of passive resistance. It's like saying, "OK, you want it, you got it, but now it's your responsibility. If we go down the tubes, it's because of your greed." I just can't help thinking that putting profit for investors as the main purpose in the mission statement is really a slap in the face to investors.
Anything the business's leaders want it to be - anything from rooking the public and burning employees, to giving everything away. But when a community depends on a business for long term employment, the income for putting children through college, and the general economic prosperity, then a responsible and dependable business has a different role to play. Even businesses that are just extensions of a major corporation should recognize their responsibility. Businesses make products because the world has a need, engineers and craftsmen like working with the product, and the entire company makes a living from it. Investment is a way of raising the funds necessary to start and expand the company. This isn't a naive approach, this is how many successful companies start and become a success, usually before they go public.
Many current investors are little better than financial terrorists, plundering, raping, pillaging, and terrorizing the organization that made itself profitable to begin with. This isn't to deny current market conditions or that some companies need trimming and better direction to be successful. But companies need to reinvent themselves on a continuing basis, not be attacked from outside.
Put that in a mission statement, and it comes out: "We will make product X to meet customer need Y, so that our customers and employees are benefited in a way that our employees can afford a good life and our investors make a reasonable return on their investment, while continuing to explore additional product opportunities for our future success."
If companies would make this their mission statement, they would quit screwing up half the world.
Most business is volatile. Changes are inevitable even for very secure products. In this continually evolving world - entire product lines disappear overnight. But once a niche-market is found and becomes lucrative, it is easy to become complacent, narrowly define your market, and restrict your vision to the immediate. If it all disappears tomorrow morning, the company officers have an investment portfolio in other companies and their financial future is guaranteed. Why should they worry about the future? They should. Over 500,000 people have their jobs terminated every year in the US. Families are split apart. Dreams die. Entire communities often die. This is a major reason why employees should be the principal owners of companies; but in lieu of that, management's responsibility to its employees and stockholders is to ensure a future for both. How? Leveraging current products into new opportunities is one avenue of forward security. But the best avenue is to listen to your employees ideas and interests. Given the opportunity, a little help, and a little support, they will create their own future.
Managing one development project is usually similar to managing other projects. For example, writing a story is a process and can be managed. Process management recognizes that a process is dynamic - changing. The writing process is not a linear process. As with most development processes, you set yourself up for failure if you establish a rigid overly defined goal and a set a rigid linear path. If you insist on a linear path, then obstacles that arise require Herculean efforts to overcome. At the first point that something doesn't work as planned, the project may be considered a failure and is abandoned. The odds that something will go wrong almost guarantee failure sooner or later.
Managing chaos isn't much better. Projects without a concept and some thought toward regularly checking the status of things are chaotic. Chaos has no goal. You can establish a goal and ride the wind, but it is very difficult to constantly keep the wind under control. (Managers in some fields must do this.) The result of chaos is serendipitous results or more chaos. The odds of chaos being a straight line toward an acceptable goal are in the realm of practical improbability. Stories are in highly competitive markets. I would not want to begin ordering a story out of chaos and depend on serendipitous results. But there are some highly talented people who can.
Process management1 understands that as the project unfolds, new possibilities are revealed and some other things don't work as planned. For example, I have a broad concept in mind of what I want to write. It's intuitive - it comes from within. I almost always start there - not with characterization. Characterization is an intuitive approach also. Writing characters will typically drag some gut level feelings out of tbe writer that produce story directions. But five of the six characters produced may not work at all in the story. If you have some idea in mind first of what the story is about, you can create characters that are more "in tune" and focused for the story. The most important point is this: the plot develops from the interaction of character motivations. To develop an honest plot, characterization is the first step. See Where to begin.
To begin, using a process management approach, you define your goal a little more broadly. For example, I want a romantic comedy about two people who can't get along. I don't need to specify the other points that I have in the concept, because I may need to change them. The next thing to do is to establish a project planning and writing plan - mine is in my head and is pouring out here - with check-points to review the project and evaluate the story. If something isn't working, or if you see you can take advantage of something unexpected, you redo the plan (concept, characterization, plotting, scenes) and continue. You continue doing this until you reach your goal.
See http://www.anaesthesia.unibe.ch/html%20english/proman_e.htm for a general example of a process management approach. Also see, The Process Of Management (Prentice-Hall; 1987)
Note: process management, as I describe it for managing projects, is not a systems approach. Information is not designed by a system nor forced into an artificial paradigm of how a story should be structured, nor are elements specified that must be in a story, nor categorized in any way. There is no substitute for creativity or for the writer understanding what elements should go into his particular story. Process management is a type of management that is independent of the process being managed.
When I was a manager of a 2.5 million dollar district, I learned some very practical things about accomplishing objectives. One was process management, which I already discussed. The other was about managing priorities. One manager taught me by example to limit the number of goals I was working on so I had enough focus to get things done. My first national manager was one of those likeable people who promised everything to everyone. His desk looked like a fresh snowfall, covered with small scraps of paper carrying reminders of things that he was supposed to do. At the end of the year he had promised everyone everything in the world and had accomplished nothing.
This manager was replaced by another national manager who appeared to have his act together. We got together as a group and discussed what needed to be accomplished. We made a list of about twenty items. We then prioritized them. After prioritizing the list, the manager eliminated all but the top six, and then said, "This is what we are going to focus on this year." These were major projects - no one had attempted to do these kinds of things across the division before. So he (we) started working on the top three, and at the end of six months those were completed and he went on to the next three. I learned that when you focused your time and energy, you accomplished much more. I have been practicing that ever since, listing six objectives and working on no more than three at once.
But while setting priorities and focusing is a key to getting things done, it doesn't teach you how to manage. Priorities are special interest tasks, not management. Management includes the day-to-day tasks involved in running a business, special projects that come up that involve other people and business units, and other priorities at the bottom of the list that are important to get done, but never will rise to the top three. I knew people in business who would stick to their priorities and never do anything else that was important - especially if their performance wasn't rated on those other things. (Those things became part of their rating in some very fuzzy categories, eliminating that problem.) What helped me learn to keep business balanced was my own perfectionist style (toward myself), and that the national manager was a perfectionist micromanager who never hesitated to recite the list of things that you were responsible for.
If you do priorities and don't run the business, the business comes crashing down on your head. Very important things don't get done, and your priorities become an obstacle to everyone else getting their work done. I have frequently seen this happen. Writers and project managers like to hide in their workspace and work on their project, and resent being interrupted by anyone. Any request to them is automatically given a five day delay to make sure that you appreciate that you are interrupting their valuable time and priorities. But running things effectively usually takes at least 20% of your time, sometimes 90%. Keeping the business going has to have priority 1.
I always hated my "To-do" list - that ongoing list of things that I felt should get done. Every day it grew longer and longer. It seemed like it was the master, and I was its slave. Everything that came in got put on that list until I had time to do it. I created a monster. Finally I threw away the list and began doing those small requests immediately. Things got done and everything ran much smoother for everyone. It helps to understand what is a project and what is a necessary task that you can accomplish in a few minutes to a few hours. Things that simply could never make it into the top three priority list eventually got done. The key was focus. As a result, I was informed that I had a better developed business plan than the division, and I routinely got more done than just about anyone.
When I first began managing, I had been on the receiving end of mismanagement and I was angry. I once asked the manager if he was aware of the incredible number of hours that I had turned in for over a year on my field reports. No, he never looked at them. That was a very revealing moment. All he cared about was that the work got done and the customers weren't complaining. But he was also frustrated. He was trying to get people to do more and trying to get them to grow the business, and had reached the point of threatening to fire people if they didn't sell more widgets that really didn't need replaced. But their complaints about not having time to sell fell on his deaf ears. It was a stalemate.
The customers started complaining, business was lost, and suddenly the entire old management team was flushed and I became manager. The first thing I did was look for the business records. What few hand written records existed, were largely missing. There was no evidence of tallying, let alone business analysis. The other districts turned out to be in the same mess. The entire division had flown by the seat of its pants, "Get the work done," being battle cry that was sung like a continuous song, and the idea of managing the business had never occurred to them.
I determined the preliminary things that we needed to know to run the business effectively and eliminate costly paperwork. The existing paperwork was complained about loudly by those who created it, and largely ignored by the recipients. What a system. Not to mention that about 10% of reports were never invoiced or paid. The next step that I took was with much trepidation. I knew that as soon as I developed tools for analyzing the business and put the data in a computer, someone would misinterpret the results. But I could see tremendous benefit to the employees and the business, and plowed ahead.
Within a few months I had ended the squabbling about territory sizes by showing in black and white what each person was doing and equalizing the territories. With accurate figures on the district requirements, I staffed to have one person extra in ten to twelve people so that we could cover vacancies and vacations. People are willing to work much better when they don't have this cloud of suspected unfairness floating over them. And more was accomplished because those who had been getting a free ride suddenly had to answer to me and the group for the amount of their work. From there we developed accurate performance measurements that everyone was pleased with. On my next assignment I duplicated this success, getting a very difficult to work with group under control and everyone working harmoniously in less than two weeks, much to the surprise of the manager who had had them for several years.
I had no sooner gotten the system working when everyone outside the group wanted to look at the records and manage the business for me. They looked at the number of daily calls and just couldn't imagine why someone in Nebraska could only do one call a day (with 8 to 12 hours driving time per call), but someone in Chicago could do up to six, depending on where they were located. Their first impulse was to combine Nebraska with Minnesota, which would have doubled driving time for each call. On the other hand, others wanted to remove both reps from those territories because they weren't profitable. That would have really increased sales!
Computers are no smarter than the people who use the data. It was quickly evident that you don't let people who don't understand the mechanics of the business try to run the business - they can only wreck it in the name of efficiency and short-term profitability (their special interests), and that is just as bad as not having the data at all. As it turned out, both territories eventually became profitable, largely due to customer satisfaction and the availability of a rep to put time into growing the business. Profitability increased for the entire district as reps began to understand the business and began putting their time into growing the business. But as soon as I created an analysis tool, it was a daily battle with those who wanted to run the business by looking over my shoulder, to satisfy their own agendas. However, it led to national computerization from visits to invoicing and all data soon was automatic - no entering data for reports.
There is no substitute for business knowledge. Experience is knowledge, statistics are only a tool.
I prided myself on being able to work some with attitudes and attitude problems. I had a lot of success removing obstacles from people's attitude paths so that they were empowered to do the things that business required from them or so they could make their career more successful. But I had minimal success helping people with attitude problems to change their attitudes. Some would make moderate gains and then fall back into old attitudes and unacceptable behaviors. One person would always show up hours late, wouldn't do paperwork, often wouldn't go on calls, and had a horrible inventory. His behavior was very typical of all of those who had attitude problems. At minimum he required direct supervision. I worked with him over several months with some progress, and finally had to let him go. He expected it, and I seemed to be releasing him from something unpleasant. This feeling of release was also typical. No one wants to get asked to leave, but like most of these people, he wasn't a quitter. It was preferred that an outside agent other than himself pulled the plug.
Others that I counseled would seem to change their minds about something, and then when back with other people they would continue their negative attitude. I found this to have a cultural component (not race). Their view of business was apparently biased by environment. Their attitude was always that the company was somehow doing them wrong, no matter how much the company stretched to accommodate them, and they continuously made negative comments to others about the company. Although their work behavior was more like the first person, they usually walked a fine line, rallying when pushed and never doing anything that would get them fired. I couldn't get them to change, and was constantly cleaning up after they disseminated largely untrue negative information to others. They tended to leave of their own accord.
Others had problems that were well out of my range for helping. One person left seminary and joined us, his wife was a foster parent for half a dozen kids, and his customers thought that he was wonderful. He was the poster child for something great. But on the side he sold a multi-level marketing product which he allowed to interfere with his work schedule. He had continuous financial troubles. He often didn't show up for customer calls. Like the first person, he didn't do paperwork until I flew down to get it, his inventory was a disaster, and he seemed to be working only four hours a day. I talked to him many times about his problems, which he openly acknowledged, but nothing helped. He was his own route to self-destruction. His wife was stopped for speeding, and he had no car insurance. The State revoked his driver's license, which he had to have to make customer calls. His car was impounded. He charged a brand new car on his company American Express card, and then wouldn't pay for it. I gave him a time limit in which to leave (and pay for the car). Again, it was as if I had released him from something unpleasant and he was glad that it was over.
Other people had other problems, but it was always the same. Once they were removed, or removed themselves, they were relieved that they were no longer bound to a problem. What I concluded is that people with attitude problems poison the organization that they are in, it takes a lot of work to clean up after them, you can't improve their attitudes, they require an enormous amount of time, and they are relieved when they are released from the organization.
Everyone gets an "attitude" now and then, and everyone has different work characteristics. But genuine attitude problems that disrupt organizations need quick action. At that time I had to document and work with people for months. In most organizations you rightfully must be very careful how you handle people. But my inclination is to document the problem that they are causing for a short time, confront them with it and get their agreement to cease causing problems related to their attitude, talk to them and work with them (including counseling) if it stands a reasonable chance of helping, but let them know that the very next time is the end, and at the next occurrence get their agreement that they again caused a problem because of their attitude and give them a way out. This limits a tremendous amount of destruction on both sides in a hopeless situation. People with attitude problems who cause trouble are either where they know they don't belong, or they have personal problems that are too deep for business to deal with. Giving them a way out frees them to pursue the right things, or allows them an opportunity to address their problems.
It seems to happen to every successful business sooner or later. Effective management is lured away, or dies, and the bungling bureaucracy decides to change direction. I suppose if everything is working well and you have nothing to do, you look like a moron, so you have to do something even if it is wrong. I won't mention the retailer's name, but they have been one of the fastest growing and fiercely competitive retailers in the last twenty years.
The first clue that things were going to go badly was when the computer took over the entire chain of stores. The ultimate bean-counter was in charge. At one store, before the employees left for the evening the computer in some remote state turned off all of the lights in the parking lot. It was still light in the West. Employees walked to their cars in the dark, and this went on for some time. What good did it do to complain - after all, the computer controlled the heating and air conditioning, so parts of the store were freezing while the rest baked. Local management did nothing, seeming not to care about employee... anything.
Finally someone mentioned safety and lawsuits, so local management talked to the computer about the parking lot lights. Computers aren't stupid, they represent the people who put information into them. So that was the first clue that the people in control could care less about the people who work for them: putting a computer in charge.
Clue number two: the entire work force schedule was turned over to the computer. The computer would decide what was the most efficient time to have people work, and would blindly make the assignments. Excellent theory - doesn't work with people. Upper management could override the system when they wanted, but they usually just blamed the computer. So people who hired in with the understanding that they couldn't work evenings because they had young children at home, or weekends, or had a class on a certain night - all were suddenly overlooked. It didn't seem to bother management much when over 60% of the work force at one large store had to quit. In fact, it seemed to be planned that way. After all, employees can be a pain! And this during a major service labor shortage, no less.
This same management makes sure that there are no seats anywhere for employees to ever sit down (except maybe the break room which they rarely get to use because they are "responsible" and can't get anyone to cover for them while they take a break). Management also makes sure that there are no telephones that will dial an outside line, and screws the drawers shut on tables so they can't put anything into them. Rather than deal with human beings, they eliminate normal amenities, treating people worse than animals - real morale builders.
To rub salt in the wound, the people who set prices send price changes (by computer) for a thousands of low-price items on one day - each requiring each individual item to be inventoried and tagged with a new price which takes days - and then two days later change them all again. Meanwhile, the managers complain because everything doesn't get done on time. Duh!
There are other tell-tale signs. The stores are constantly short-handed. Employees, who stand for eight hours or longer on cement floors, not only can't get coverage for breaks, employees can't even go to lunch because they can't get an assistant manager to find someone to cover for them - the assistant managers simply don't answer when paged. What do they do when they need to cut expenses? They cut the employees to under forty hours. After all, the store needs the profit more than the employees need their meager income.
What do the managers do when an employee gets to forty hours? Let them work a little overtime because they are needed? Send them home early? No, they just tell them to take a longer lunch or break. So corporate time is more important than employee time - sitting in a hot or cold car in a parking lot, or sitting in a cafeteria, waiting.
Here is a store that supposedly prides itself on treating the individual well, pointing to the example of including employees in a profit-sharing plan that makes them an investor - a real part of the business. Right. Typical manipulation, not motivation. I have heard nothing to dissuade me from believing that most retail and manufacturing industries depend on high employee turnover to keep wages low (therefore profits up) - and actively discourage employees from long-term employment - despite loud pronouncements to the contrary. Millions of hard-working people across the nation (and in other nations) depend on such companies for employment for most of their lives. I guess they did something to deserve this lousy treatment.
And then the chain puts the management shuffle into full swing. Stores become training grounds for shuffling assistant managers instead of being run by people who know what they are doing. Decision making is taken away from permanent department managers, who are reduced to shelf stockers. Interesting direction, since the remote computer makes all of the stocking decisions and the assistant managers can never be found. What are they training to do? Employee satisfaction goes still lower, and assistant managers who have no clue what they are doing are simply butchering the job.
There must be a monthly newsletter for screwing up businesses. Or maybe there are a lot of managers being slipped money by the competition. The next evidence - tighter cost controls: "Don't work more than your allotted 38 hours (or less) or you will be fired, and reuse those paper cups all week."
At last report (June 2000) most of the original employees had left the store, departments had eventually been downsized to eliminate personnel, and the number of products carried had continued to shrink. Customers complained that certain people were no longer there to help them. Local competition was blamed. The chain's management finally took notice of the store manager's and the regional manager's path of destruction, and replaced them, and the store finally broke into profitability, but barely. It only took two years for the computer to analyze this and note that there was a problem. It must have been the computer - I sure wouldn't want to blame this fiasco on upper management.
If this continues to characterize the chain, the rest of the study could be predictable. In a few years, if left unchecked, the retailer will follow the same trail as some other large retailers - mismanagement, employees who become passive-aggressive and wreck the business by default, downsizing, and financial failure. The large retailer has of course stated that competitive pricing has reached the ultimate low point - the low price leader will not reduce prices further. This is neither good nor bad, just an indication of what is happening. Growth will undoubtedly continue until unexplained profitability problems stop growth. At this point - having launched themselves into an excellent competitive and marketing position - the matured business will undoubtedly get milked for everything it is worth until it finally collapses. The same chain is beginning to take over Europe. The Europeans have good reason to worry. Low prices at what cost to society?
What is this a case study of? Of what we are becoming by our emphasis on competitive pricing versus reasonable treatment of the individual. Competition and competitive pricing aren't bad. But permitting unfair treatment simply puts the entire market into sinking water that can only result in a downward spiral. The answer will probably lie in portable IRAs and benefits, so the employees don't lose their retirement and benefits, and the addition of unions to protect workers from unfair practices.
Frankly, it isn't that I know so much about business. A lot of businesses will run themselves with minimal management attention for many years. It simply takes a manager with a deviant vision to make a total mess of it. Running a business begins with a simple formula: care about your co-workers, your customers, and your investors, and do what is right for all of them. People who can't do that aren't managers, they are special interest people, and belong in that group that 80% of the employees give a vote of no-confidence. After that, it takes inspiration and perspiration to make it highly successful.
1 Region is descriptive of my responsibilities. My title was District Manager (of one of five US districts).
A town lives in terror of a wealthy business man who purchased a local business, then muscled his way into agreements with local suppliers that squeezed all other local suppliers out. Then he forced the remaining suppliers to reduce their prices, causing layoffs and reduced wages. He also cut the labor force to reduce wages. People are losing their homes, are unable to support their children in college, and the local economy is failing to the point of forcing many smaller local businesses out of business. The man claims it is good for them, making them more efficient and competitive - they should start other businesses… or die. The people suspect that "competition" is a Trojan horse used to destroy them, and the only thing the people see improving is the man's bank account. Local law enforcement isn't at all prepared to investigate.
The Securities and Exchange Commission has refused to look at the situation. The security of everyone in the community is threatened. It is up to the people to decide their destiny. Several community members meet to decide how to regain their independence and financial future without breaking the law. Their struggle becomes starting a new employee owned company and running the man out of business. In doing so, they unite the town and former employees, and find less expensive ways to create their product with the same number of employees. They have met the challenge and are stronger than ever, and beat the man at his own game.
A man hires employees who are willing to work no matter how badly they are mistreated.
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