Whose Fault is the Economy Anyway?

In March of 2007, I began writing a book titled Why Your Company Sucks, which is a snarky look at U.S. companies and how they have become poster children for ineffectiveness, inefficiency, and waste. I completed the book early this year before the economic crisis began to climax and companies began looking for government “rescue” (aka “bailouts). Out of time, I have yet to seek a publisher. However, the principles in this book, Why Your Company Sucks, are becoming more critical than ever to explore, which is why I am moving forward with publishing it this winter.

I am not saying I have all the answers. With 10 years as a corporate consultant to some of the largest companies in American, I have personally witnessed how companies have been blinded by corporate greed, institutional mediocrity, and inbred ineffectiveness. From my first-hand view,   we are now seeing that companies cannot weather the storm of this economic crisis due to consequences by their own doing and not the other way around.  As more companies go before congress and whine about how the economy has failed them, and how their company deserves government funding, no one is asking the hard questions about the roles these companies played in contributing to the failing economy.  

Depending upon the company type, bad loans, borrowing upon borrowing, uninsightful acquisitions, overlooked inefficient business practices, and poorly and hastily selected & executed strategies are all parts of the puzzle of how many U.S. companies contributed to the current economic failure and not the other way around. When you point a finger at the economy as the reason for your company’s demise, remember there are three fingers pointed right back at your company and what you did to get where you are today: over-inflated spending, growth for the sake of growth, unmeasured and uncalculated strategies, and being indifferent about ineffective processes and practices.

For example, last month I returned from a meeting where a company asked me to come and speak about how they could become more efficient and effective at project coordination and company information sharing. A company  vice-president wanted a short presentation on some grass-roots “best in class” practices their company could adopt to increase the effectiveness of their project coordination as well as how to best obtain and share competitive and market information that is obtained during employees’ normal course of their workday. The overwhelming resistance I received from the near 100 employees in attendance was incredible.  From responses shouted like “too time consuming” to unwillingness to take on an extra hour per month of work, the attendees were throwing virtual tomatoes at my.

After analyzing the resistance and moaning about how minor adjustments in corporate process will add more work to their day, I was reminded about a conclusion that I write about in my book. Not only do some employees want chaos, they help create chaos to enable institutional disarray for their own job protection. An effeciently and effective run organization doesn’t need more inefficient and ineffective people to help run it. The fear of lay-offs and firings often prevents employees from seeing the bigger picture: some organizational effectiveness could not only help them out individually in their own job duties, but it could ultimately save their company and their own jobs through cost-cutting, increased revenue, and overall enabling less jobs to be lost.  Such a short-sided view to think that costly, ineffective and inefficient business practices will not eventually catch-up with a company is  exactly what has happened with companies like AIG, GM, and others that require government funding to continue to survive.

But it is not just the employees’ fault. Managers have ignored, and many times enabled, “institutional mediocrity”. This is what I call business processes, procedures, and organizational strategies that do not contribute effectively to the top and bottom lines of a company’s financial sheet.

I don’t mean to be a curmudgeon, but I tire of hearing about how bad the economy is and how companies are facing problematic times because of it. Truth be told, these same companies helped to cause the economic crisis that they are in right now and not the other way around. When we as Americans begin to understand that, we will demand better out of these companies – better performance, greater effectiveness, well-thought-out strategies, and a commitment to cost efficiencies because it is our individual tax dollars that are going to save these companies.