In the last 20 years most of the workforce has seen a shift in employer loyalty. Where to some the trend may be obvious, it is clear that this is an area that deserves much attention.
When I was part of the work force as an employee some years ago I started seeing what appeared to be a trend in this area of business. Since that point I’ve noticed some pretty peculiar things, particularly in the area of ‘communication’ surrounding those at the top of an organization. I’ve seen that there is a direct correlation between a smooth business model and solid communications within a group’s moving parts. From the expediter to the CEO no one is exempt from the responsibility of communicating. It requires a sincere interest in all the moving parts of a company, as well as a desire to understand the duties and responsibilities of those parts.
Lack of communication within the group causes a rippling effect. This will subsequently and eventually infect an organization to the point where it becomes almost completely psychotic. Yes, organizations can act psychotic just as people do. When communications break down, so does a company. It’s inevitable. One of the worst viruses a company can contract is ‘assumption’. When you assume, more often than not it can spell disaster. And so this is one of many reasons I decided to write this article.
In the mid to late nineties I worked for a company out of Glendale, California called ‘Turner Management’. The company has ‘folded stakes’ since the time of my employment, however this article should shed some light on why this company would eventually closed its doors.
My title was ‘VP of Sales’. When I began my tenure at Turner I was informed that the company was “4th down and 20, behind 8 points; with under a minute left in the game”. It wouldn’t be my first fire fight, or my last.
I was assigned numerous tasks as expected, but the priority was to rebuild the sales force and come up with a bright idea to bring the company up out of the mud fast.
At the time I took the position the company was producing on average 10k a month in revenue. The income was barely enough to support staff and pay its sizable rent and large utility bills. In fact when I took the job I was told that the company was behind on bills and that I needed to bring in between 20 and 30k my first month as VP of sales. This was a tall order seeing as I knew very little about the company, its products and services. I had very little time, but I dug in and worked diligently on debugging and revitalizing a sales room that looked like I had walked onto the set of a George A. Romero movie.
Anyway, when the smoke cleared my team managed to bring the company out of the red and into the black within 60 days. We averaged almost 40k per month once I stabilized the sales area. And there were more than a few months within the first year that we brought in over 100k or more in revenue. Those at the top met with me personally and asked how I accomplished our goals. As I went through the details I remember them looking at one another in disbelief. My guess is that my solution seemed so simple that they had a hard time believing it. Nonetheless the money poured in and the partners and executives started paying attention to what I had to say.
I would come to find out later that I was essentially wasting my breath however, and that greed would eventually settle in with those in power. It is no less interesting to watch, however and you can learn many things simply by listening and keeping your eyes open.
It is important to note here that even though I was responsible for the highest statistics in Turner’s history, I was reduced to the significance of a ‘dollar sign’ before I knew it was happening. Prior to Turner and after their closing I had put together teams countless times as both an employee and independent consultant. And as much as I was arguably the most successful employee in the history of Turner Management I would come to find out after 2 years as an employee of that (once again) my days were numbered and that I was to eventually be replaced by someone who apparently had almost no sales experience; one that was willing to take half of what I was being paid as a salaried employee including bonuses. Does this situation sound familiar?
The owner of the company (Whom I became close friends with) was diagnosed with multiple myeloma in 1997. He was told he had less than six months to live and so agreed to step aside and sell off the company to one of our then ‘top consultants’. With a ‘changing of the guard’ so to speak the executives of the company then began to ‘evaluate’ and look for ways to cut revenue. While this is a typical thing in most companies those evaluating at Turner were at that time very disconnected from daily operations. So much so that I wasn’t even asked my opinion in the evaluation process. And let’s not forget that I am the same employee who in fact saved the company just two years prior…..and this was right at the time my wife and I were expecting our second child. Great timing eh?
I know that many of you have heard this story before and that it may be nothing new to you. This is one of many reasons I decided to write this article. There is an epidemic of sorts that has become so prevalent that no one appears to be safe or immune from it. And while I’m not sure where it ends, I know where to begin to make an attempt to reverse the trend. I think that in part ‘awareness’ is key.
Near the time of my departure at Turner I was asked to write up my ‘hat’ and complete a checklist list of what the company called an ‘A through H’. It was basically a checklist to help those at the top better understand employee duties, responsibilities and the specifics of a particular post. The checklist was a kind of ‘stencil’ for the one who was to take my place, or at least that’s what was intended. For the record I was very resistant to doing the check sheet because I knew that once I completed it I was going to be out of a job.
Now let’s keep in mind that my statistics and performance were still in a high range of production, but that upper management and the board didn’t want to pay my salespeople or myself the bonuses we requested. These were bonuses that (under the prior owner) worked extremely well. The partners at the time failed to do the simple math and did not truly understand the basic reason the company became successful. Success was due (in large part) to the rewards system my team and I had implemented. These bonuses were paid based on production and consistency in the sales area. With these bonuses in place employees were incentivised to produce at a high level. And they did.
Within weeks of the bonus system being scrutinized and cut down by 50%, the company’s sales statistics crashed. Immediately I became the focus of an ‘investigation’. While part of this investigation I made many efforts to explain that the crash was directly proportional to the bonuses being cut, as well as the amount being spent on promotional material. My words unfortunately fell on deaf ears. The focus was on the bottom line from that point forward; what I often refer to as the ‘cash to bills ratio’.
Long story short I was asked to take a pay cut and move to a different area of the company. I refused and resigned. Less than a year later the company went out of business. This was a company that had helped many dentists, chiropractors and medical professionals become superstars in their field. And it’s a damned shame that so many suffered in the hands of just a few. The glaring difference between the managing partners and myself, is that I truly was and would have always remained a loyal employee. The same cannot be said for those that focus on profit alone.
Loyalty seems to be a dream of the past and of little importance to most corporations, despite their PR and talk of a “family” atmosphere. In fact one of the biggest mistakes companies make today (besides thinking they know all) is NOT taking care of employees and ignoring a need for a bonus systems that rewards production. Employers often put most of their attention on making their company money. They fail to get to the top because they do not reward production and they forget what helped them get to where they are. They forget all too often to take care of those that got them to the top of the bill, and are ignorant of the fact that they should hold those employees close and treat them like a gold nugget. I have watched many a business fail due to carelessness in these areas.
Prior to starting up Aeon I went on more than a few job interviews. I turned down several positions because companies today are more concerned with the cheapest over ‘the best’ employee for the job. General Motors is a great example. The only difference is that General Motors betrayed a nation in my opinion; not just one, or two people. We’re talking thousands. So again we are reminded that you truly get what you pay for. And if your bottom line is the most important thing in your business, you might as well pick out a nice polished coffin now and put the name of your business on the side of it. Eventually you will need it to hide in, or to bury your business.
The moral of the story: Take care of your employees, be LOYAL to them, and they will do the same in return 99% of the time. Don’t scrutinize the employee who takes an extra 10 minutes on his lunch break if he or she has the highest stats in the company, or is a consistent producer. Don’t forget those who are consistent rock stars. If you do you’ll find yourself explaining to your partners or employees why you can’t make payroll or keep the lights on.
Until next time, I hope you all flourish and prosper beyond your dreams! Be well!