How To Kill A Company

When people get laid off from a talent driven Company, Management might believe their layoffs walk out the door, lay down and die. While that would be convenient, what actually happens is the skills they possess stay in the market, doing exactly what they did before, servicing the same clients with (more than likely) higher efficiency and less cost. I’ve seen it dozens of times. Companies create their own competition. Good talent gets put on the street and next thing you know, there are fewer clients coming to the Company which laid them off. For many of these skilled individuals, there’s a new focus: they used to have a job. Now, they have a mission.
Their mission is to fuel a death spiral for their old Company, a spiral likely brought on by short sighted Management where the staff pays the price of their bad behavior. There’s nothing wrong with cutting Corporate fat, but you have to do it the right way. The behavior of Management often has more to do with why the layoffs occurred than with any market force.
The first rule of business, especially in an entrepreneurial startup, is to do good work. Profit is a side effect of doing good work. It also helps to be relevant but if you’re not, you won’t get this far anyway. As a startup grows, the founder’s ability to control everything naturally becomes diluted. The dangerous transition from Entrepreneurial innocence to Corporate grind will set the tone of the Company for the remainder of its existence. Take the wrong path and it’s only a matter of time before the ill effects show themselves.
In a down economy, the entrepreneurial spirit of the founder needs to be summoned immediately. Think like a startup because when business is bad, that’s about where you are – a startup. A business unable to capture enough work to remain profitable should welcome deep, honest introspection. What are we doing wrong? Why are we encouraging our clients to go elsewhere? What is so inefficient in our process that we can’t lower our costs? Are we charging clients for our inability to work efficiently [hoping they won't figure that out]? Are we milking obsolete processes instead of replacing them? Are there internal forces acting upon their own agendas destroying morale and the will to think? Is thinking out-of-the-box viewed as a threat to people in command? Is demand for the general business we’re in declining or are we just not doing the work to remain relevant?
The responses to these questions will tell you what kind of leadership you have. A growing Company can go two ways; either keep the spirit which encourages contribution and process improvement or go down the path of high controllers. The worst of the latter has a term – “Founder’s Syndrome”. As new talent enters the Company, these fresh eyes will no doubt see ways to improve the business and will seek to influence the decisions made. The founder in turn begins to galvanize their position of dominating the decision making process, often becoming a negative influence. This behavior can be very destructive to the Company’s morale and frustrating for talent looking to do a good job. Worse, the founder will begin to select like-minded individuals for promotion into positions of power. Now, founder’s syndrome has multiplied itself into a suppressive, authoritarian wall. When the entire staff senses that a good ass kissing will get you further than promoting better ideas, the energy and charisma which lifted the Company from nothing has officially died.
If your Company’s leadership has the hubris to believe “we can do no wrong”, bringing any of these introspective questions to the table is a big mistake. No high-controlling leadership wants to hear “Turn the fucking wheel, there’s an iceberg ahead!” If you’ve got powerful egos to contend with, all Management has heard is that you’ve just called them idiots. In this situation, the mixture of highly talented staff and authoritarian management will touch off the death spiral. Talent is always thinking of how to solve problems, even if the problem is themselves. All talent wants to do is contribute and Management should listen to them.
For egotistical management, the threat of losing control is more powerful than the need to solve the issues. They won’t even look for the iceberg. If anything, you’ll get blamed for allowing the iceberg to drift into place. The hallmark of powerful egos is “I’m in control here, I’ve got everything covered, I’m in charge”… until something goes wrong and they look for someone else to take the bullet.
Introspection is dead. Say anything which might tie Management’s behavior to poor performance and they’ll brand you as “negative”, advertising to the rest of the staff that listening to your nonsense will lead to frowns from above. When the axe falls, the squeaky wheel will get replaced. I maintain that not listening to this “nonsense” will lead to financial collapse and many other people losing jobs needlessly.
Upper Management needs to have intangible matters tracked and quantified, which is the function of a financial analyst presenting data. If a Company puts financial people in charge of operations, they had better be really smart and have the ability to see beyond the spreadsheet. Many cannot. There’s no “doing good work” entry on the balance sheet and often, there’s no “good business ethics” column either.
All it takes to kill a Company is an aggressive middle manager without knowledge of what the Company actually does sitting behind a spreadsheet, particularly if they have personal visions of grandeur. For that reason, Excel is probably the most dangerous tool in business today. The P&L statement becomes a monolithic entity subject to being manipulated to keep the number on the bottom black
What suffers is the soul of how good work built the company and the absence of that understanding will eventually start the spiral. The Company needs a leader, not a myopic twit making uninformed decisions, ignoring warnings from others with years of experience. Problem solving needs the entrepreneurial spirit instead of “oh, here’s a big number to eliminate” believing things will take care of themselves. Basically, the founder has to reconnect with their entrepreneurial spirit and turn it around. As long as Upper Management trusts an analyst like this to drive the business, blinding stupidity will take root – with more layoffs of talent instead of deep introspection. Oh, things will take care of themselves alright.
Here are some tips for staying ahead of the game, no matter if you’re talent or a Company trying to stay in business:

  • Reinvent yourself all the time. Your most intense competition should be your own next great idea.
  • Think like a client. Check yourself on whether you’d buy your own services.
  • Keep up with technical changes. Old, comfortable ways of doing things become artificial expense.
  • Never fall in love with a Company or Technology. They won’t love you back.
  • Always look for “A Better Way”. If you don’t, someone else will.
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About admin

I'm a Broadcast Video engineer who builds post production and production facilities. I'm also dig photography, scuba diving, Volkswagen Vanagons, skiing, technical writing and a number of other things. This blog will be showing some of those items.
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2 Responses to How To Kill A Company

  1. Argosy says:

    You just described the graphics house I worked for in LA that went down 2 years ago. Perfect. Egos. Now I am my own boss with my own people and will take this as a warning to myself.

  2. Vincent says:

    Well said. I’ve worked at a law firm for over a year scanning documents and watching the people. Its amazing. Egos of trial lawyers are bigger than anything. The senior founder is a great man but let his daughter come run everything into the ground and let these brown nose assholes take over. Two partners left to start their own firm tired of getting stabbed in the back for everything. Businsess is down a little but its more the crap going on in here than the economy thats killing the place. They think they’re ok but their full of shit. The senior founder doesn’t see what shes doing or do anything about it and this place is losing there reputation and clients while the other firm is growing. Serves them right to put ego power and control over doing the right thing. I’m a nobody and i can’t stand it here.

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