Wait and see is a common tactic when dealing with business problems. Unfortunately, a great many times, this delay simply leads to disaster. When faced with a major business challenge, consider this object lesson, and the tips at the end.
Let’s wait and see – does that ever work? Certainly not this time as this company was bankrupt in less than six months.
Before judging too harshly, understand that the principal was well-educated and genuinely seeking to make good decisions on behalf of the company. But this story is less unusual than one might realize. And one we encounter in various forms many times over.
We were asked to meet with a smaller high-tech contract design and manufacturing firm geographically located in a rapidly expanding market. The business had two divisions: 1) electronic design and high-tech electronic manufacturing on contract basis and, 2) an electronic parts hobbyist supply.
The principal had bought other partners out when his father, the founder, had passed away 18 months prior. The decades old business started as the electronic parts hobbyist supply, later expanding into the contract design and manufacturing side. Business had been slipping in both categories.
Almost a year prior to our meeting, the principal had hired an executive from Motorola as the new president. He assumed because Motorola was about electronics, the fit would be great. That was his only criteria. It could not have been a bigger miss.
The new president had never worked in a smaller organization. He was lost without the market recognition and support systems to which he was accustomed. To compound matters, he immediately hired several associates from Motorola into newly created key positions which had never existed before. None of these individuals had ever worked in smaller organizations, either. The increased payroll added more than $800,000 annually to an already struggling business. And all of that was for administrative roles. There were no much needed business development expenditures nor accompanying efforts.
The electronic parts hobbyist side of the business had been in steep decline for several years as it was really a niche market and clientele were aging and dying.
We met and spoke several times with the principal. We recommended several actions we would help implement, which he agreed would begin turning their business in an immediate, positive direction. These involved immediate cost reductions and departmental right sizing to begin taking advantage of the expanding market. Front and center were some immediate, focused business development efforts.
The principal was so saddened and embarrassed by the situation, one he felt he had gotten himself into, that he simply could not move from, “we are just going to wait and see what happens.” A few months later the company simply closed the doors and let a highly trained workforce go. It could have been easily prevented.
My hope is that if you are reading this and you see yourself in this situation, you will reach out to get some objective help. Or that you know someone who is in need and pass this along. And that they recognize themselves and Get Back on Course.