It is Not Just the Economy, it is Pride and Arrogance

When the economy is great and a knucklehead could make a buck, many businesses make expenditures or plan to spend funds on expanding the business, in the case of B&B's, renovate rooms, and amenities and lots of other forward-looking ideas to make the business more attractive and valuable. There is one BIG problem. And that is making forward projections to protect you in tough times.

An honest, in depth SWOT Analysis would have revealed and established the critical needs of the company, recognizing the need to maintain supplies for daily operation and exposing the risks of major, non-critical purchases, the hazards on deviating from company policies concerning employees and contractors and staying current of laws enacted such as redeeming gift certificates. The law does not recognize ignorance when it is violated.

The test for solid business planning and discipline is being prepared as best as you can for difficult times, being sure NOT to make decisions based on aesthetics while you most of your window air conditioners don't work right and guests complain and other issues. Here is a scenario; renovate a room, quoted about $20,000.00 and 4 weeks of work turns in $60,000.00 and 8 months and by the way, no contract. There are other examples; decisions make out of company policy that ended up costing thousands of dollars to settle.

Another great experience was while working for a textile company; millions of dollars were spent on equipment that was not needed while equipment that was badly in need of replacement was ignored creating lots of down time and damaged goods. The company was further affected by the dismissal of the Master-Dyer in favor of a long-time employee who learned some dying on the job for 40,000 per year. This created a tremendous rejection rate due to off color dying, lost time, and the wasting very expensive dyes.

As a result of the miss dying many rolls were rejected by the buyers who would "punish" the company by not ordering for a period of time or, would drastically reduce their orders. These were long time, core customers from a garment district in New York, Liz Claiborne and Calvin Klein be two of many. Many companies, because of the long relationship, were unusually flexible and lenient but eventually had to terminate the relationship or reduced purchases. During this time blame was made solely on foreign competition.

Ironically, the particular culture of management this company did not influence the majority of the company.

Only a few managers and supervisors fell into line. It, this culture, management had quite a negative effect on the rest of the company. While it may be inevitable that the company would close, what is known for certain that they caused their own demise through gross mismanagement, reduced quality; even shipping goods that were known to be sub-standard for the customer hoping it would "slip through".

Hiring inexperienced people in place of professionals, buying a 40 ft yacht for the CEO using retirement funds and other costs of entertainment, poor maintenance of equipment, additional borrowing from the retirement fund for dying equipment while under a contract with a factoring company (receivables financing) and hiding documents from that company auditors. (I got to hear and see the whole show)

They refused to interview very long time employees who had been there for generations to gain their knowledge and expertise to pass on to others. Lost loyalty to the company through the steady degradation of company shares from 365.00 in 1979 to .15 cents according to the last statement I received. There is more but this should be sufficient.

My knowledge is the result of the positions held during the 8 years of employment; in order they were, yarn tester, dye weigher, piece dye operator, training coordinator and quality technician. I was involved in numerous projects which gave me access to all departments depending on the project. There are three other previous employers who are no longer operating that operated similarly. I'm sure anyone could share these experiences. It is not just major corporations shooting themselves in the foot.