The Self Destructive habits of Great Organizations IV

4. Cost cuts and BMWs
The year had been hard. The market was not perforing as per expectations. the fluctuating oil prices, the rising inflation were just the beginnings. This year the company had not delivered any knock out products. Normally, each quarter, the company had a record of at least one product which did a lot in the market. It was a different story this year. 6 months and a lot of reorganization later, the company had not delivered winners in the market. Mr CEO and his board were a worried lot. The first half performance being dismal meant incentives being paid out were modicum. That had an impact on the teams and the sales force. Mr CEO tried to maintain the composure by talking about glories and old battles and victories. Employee morale had been plummeting. They saw thru the stunt of Mr. CEO with inane displeasure and disinterest.
Market shares were iffy and nimbler players were throwing around knock out punches. Margins were under pressure, or rather profitability was a question mark for the first time in a long innings. Travel costs were cut. Employees were asked to video/voice conference. Each employee was given a VOIP to cut the costs. The messgae was austerity. Another 6 months or so, the company would probably be handing over pink slips. Employee incentives were dismal. There was discontent in the ranks.
In such times, came the policy. Each management team/board member above a certain rank, essentially the top bosses, were getting BMWs, Toyota Camry and Toyota Corollas as a token of appreciation! Hah Ha! Austerity, margin pressures, profitability took the convenient back seats for this one moment as the top bosses were dished out these very "humble" gifts.
Mr. CEO
- In the days of cost cuts, what examples are you setting?
- Did you consider the dissapointment in those managers and employees who would not get these "humble" gifts.
- Can you ill afford to take these costs on your balance sheet?
As an employees (much junior to the honchos) was quoted saying... i wish they had given us a Atlas Goldline Super (Bicycle) atleast.