For 12
years through the late 1980s to 2000, I worked at a family-owned retail
publishing company that had been in business for nearly 40 years prior to my
arrival. It was founded by the patriarch who, when he retired, predictably
passed the leadership reins to his son.
It
wasn’t long before I realized that as it often happens, the scion possessed
little or none of his father’s business acumen and made a series of
head-scratching investments and personnel appointments worthy of their own
mention in a Dilbert cartoon.
First,
he managed to so overfill the company’s management and executive ranks that at
one point, there were more vice presidents in the New York office than sales
people. Not exactly a textbook strategy when most of your revenue is contingent
on advertising display sales among the
company’s portfolio of publications.
To
remedy the problem, he hired an expensive consulting firm who eventually told
him what any employee in the mailroom could have for free. This despite the
company’s accounting firm’s repeated attempts to control the executive hiring
frenzy.
He then
paid another consultant $5,000 a week to implement some confusing employee
performance matrix, one that rewarded high performers not with money but
apparently self-satisfaction that they had done a good job.
Want to
take a guess on how successful that was?
And
finally, despite the accounting firm partner in charge’s repeated attempts to
discourage him from doing so, he paid an absurd multiple to acquire a pair of
medical publications that aligned with exactly nothing in the company’s current
stable. Two years later and awash in an ocean of red ink, they jettisoned the
books at a considerable loss.
Fortunately,
I was long gone when the company began its inevitable downslide from which it
would never recover. It sold off its flagship book to a competitor and I just read
where what remained of the company was acquired at a bargain basement price.
Done. Finished.
A sad
ending to a company that was once a stalwart of business-to-business publishing
in the highly competitive New York market.
And the
sad part is that much of the malaise could have been avoided if management just
listened to the advice of the folks they paid to maintain their books and dispense
advice.
I’m
certain that there are countless stories like the one above, folks who think
they know better and eschew the experience of the people who advise them to
prevent such tragedies.
And
perhaps even sadder is that it will most certainly continue to happen.
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