Home Archives November 2006 The downturn hits home

The downturn hits home

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Wednesday, November 01, 2006

s_Robin

In the face of a forecast for a slowing economy, the board of Doussard Family Industries (DFI) met recently to review its business plan and see what adjustments were needed to keep the company’s profits secure. As CEO-COO-VP of finance, I decided to adopt the “open book” philosophy of management and share with the group our financial situation in detail.

The DFI board — myself, the operations manager/husband, and the staff, which consists of the old dog and the young dog that really hates the old dog — decided the first order of business needed to address cost cutting. What could be trimmed without hurting productivity or morale?

I started the meeting with the excellent suggestion that the beer outlay could come down a bit. After all, I told the ops manager, the Widmer boys are subsidized pretty heavily by DFI. Ops made a pretty compelling argument that both productivity and morale would significantly sink if the beer line-item was touched by even one red cent, and suggested that the CEO shoe expense should be cut instead.

After all, he argued (and it appeared that both turncoat staffers were on his side), you can only wear one pair of shoes at a time (and, in the case of staff, none), and they last for at least two years. So, really, amortized over a decade, the annual line item should be roughly $12 if you get said shoe items at Payless and not at Nordstrom.

I ignored this short-sighted idea and suggested that staff should cut back on their food bill and whipped out my Atta Boy Index of Affordability, a detailed look at what is spent on their 50-pound bags of food at Costco. The index proved that the cost of staff kibble had gone up, but staff productivity over the same period had really gone south. Staff no longer run or fetch or even move off the kitchen rug, and there has been no corresponding drop in consumption of calories. Ripe for economizing?

The older worker (114 in dog years, a walking EEOC lawsuit) immediately howled age discrimination. In a rare show of staff solidarity, the younger worker added her vote, and we came to a stalemate. Operations also noted that the CEO was on the same calorie/activity down trend. Sensing board revolt, I tabled the cost-cutting discussion and moved on to health care. These costs were spiraling out of control because of an unexpected recent incident when the young staffer bit off a good portion of the older worker’s ear in a brawl on the factory room floor. Speaking of health-care costs, operations said, what is this $200 “dermatology” bill for a facial and “eyebrow work” that is in the CEO discretionary budget? And what, he added, is the CEO discretionary budget, anyway?

Then he started looking down the credit card bills and the checkbook entries and asking ill-informed and, frankly, insulting questions such as why are we paying for Netflix when we don’t watch videos and what was this $300 line item called “school supplies” when we don’t have children? I decided that open book management was too advanced for this group, and that I needed better code words for the checkbook, and moved to adjourn the meeting. Operations had an important meeting with the Widmer brothers (since we were increasing their consulting fee) and the staff was snoring loudly, so it was so seconded.

It is not easy running a small business, even in the best of times. It takes honesty, focus and self-sacrifice to really maximize profits and stay the course. None of which I’m interested in. If the operations manager ever tries to make me live up to that, I will remind him that recent performance evaluations have been, well, let’s just say they’ve been mixed and kindly leave it at that.


— Robin Doussard

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