I’m sure this same scenario is present in many large companies. However, one in particular has gone from being an industry leader to an industry loser. How did it happen and what is this company’s future? I am not going to name the company because the principles that have caused this company’s woes are not unique to just one corporation.
I will just call it the "Widget Company". There was a time when the Widget Company was at the top of the industry. It was a great company for customers, stockholders, and employees alike. The company was great to work for and treated their employees with respect, and fostered a “family” atmosphere. Customers loved it because they offered down-home southern hospitality. Stockholders loved it because it consistently gave a return on their investments. Employees loved it because the company treated them very well. They always paid at the top of the industry, and their benefits were outstanding. Managers, and supervisors were there to serve the rank and file, and for the most part bent over backwards to help. Many good people devoted their lives to the Widget Company because they knew they were providing a valuable service and doing something worthwhile. Happy employees made happy customers....Then the dark days came.
The Widget Company was severely impacted by September 11th and a general economic downturn. Many things were beyond their control, and the industry as a whole was in a tailspin. However, other companies adapted quickly and recovered. The Widget Company on the other hand had a deep-seated problem that had existed for years but it did not become apparent until things got very bad. Since the Widget Company had always been successful it had become arrogant. It's un-wielding bureaucracy was extremely resistant to change and innovation. The top brass thought it was mainly outside influences that were hurting their bottom line. In some aspects that was true but in reality it was the internal mismanagement that was causing the biggest problems. No one had any vision, and the people at the top continually misread the signs and future market conditions.
Things the company should have done early on to stop it’s economic bleeding were put off, or not done at all until it was too late. The company felt invincible. They had the attitude that they were better than other companies, and didn’t see the need to compete with smaller upstarts until they started eating away at their market share. They discovered too late that people liked the new start up companies and were not willing to pay the higher prices that the Widget Company was demanding. The company had always enjoyed the ability to charge customers what ever it wanted. With the smaller companies fierce competitive nature it became impossible for the Widget Company to control the price of its service.
Arrogance may prove to be it’s undoing. Instead of adapting to the new market, the Widget Company decided it was just a matter of cost cutting to bring it back to it’s glory days. Now cost cutting certainly was necessary and there is always plenty of fat to be trimmed, especially from a bloated, fat, top heavy, bureaucratic company like theirs. It was Arrogance that kept them from cutting in the areas that really needed to be cut. They could have trimmed thier top heavy management team or streamlined the snarled bureaucracy, but instead they took a sledgehammer to the very things that made the Widget Company successful in the first place. The quality of their product fell dramatically, and complaints skyrocketed. Constant changes to the product left customers confused and unsatisfied. Their once valuable stock fell into junk status. In an attempt to increase productivity, the company demanded more from employees, but in return they cut pay and benefits. The company that was once great to work for had now become a tyrant. Pushing workers for more and more but giving less and less in return. Morale plummeted and many people that had devoted years to the company quit, were forced to quit or worse. The Widget Company thought this was a benefit to them because they could get rid of high seniority and higher paid employees. They no longer considered employees to be part of the “family” but mere hired help. The more they demanded from employees the less they actually got in return. They constantly had to hire new workers because they could not hold on to older ones. Years of experience and expertise vanished and mediocrity was the natural result. Like parasites, management fiercely protected themselves and each other for thier own interests at the expense of the company as a whole. Supervisors and managers were seldom held accountable for bad decisions. It was all about them.
Yes it was once a great company, but now it is a mere shadow of itself. It is no longer benefiting, it’s customers, employees, or stockholders. It is just a black hole sucking up money. It is probably too late for the Widget Company to pull out of it's inevitable bankruptcy and possible insolvency. Anything it attempts to do now will only be rearranging the deck chairs on the Titanic. Will it pull out and become a great company again. I am not hopeful. Not in it’s present form or present management. The question is, should a company that is benefiting no one even stay in business at all?