It's Not Luck - Eliyahu M. Goldratt [96]
“See you tomorrow morning. Come on, Don, let’s go.”
28
At the entrance, Don and I are directed to their main conference room. They are all waiting for us. Stacey has packed the room. Not only with the entire sales staff, even the production supervisors and union stewards are here. They had to arrange for extra chairs along the walls.
As I go to take my place at the head of the long table, I shake hands with the people I know. They are very formal, but there is no open hostility. Don takes a seat at the back, near the door. Smart move.
“Good morning,” Stacey starts.
“Good morning,” she tries again. It takes a little while until the room quiets down.
“Here is Alex Rogo, our executive vice president,” Stacey introduces me. “He is here because he believes in the future of Pressure-Steam. He believes that it’s within our power to prevent it from being dismantled. Yesterday, Alex sat with the two senior board members to buy us time. He persuaded them that there is still a chance and succeeded in stopping all negotiations to sell our company, for the time being.”
Some sporadic claps.
Will Stacey back me up? Will she grab the baton? If she doesn’t, we are going to have another severe setback. A setback that we cannot afford. Early this morning I decided that I have to gamble on her. She can do it, no doubt. The question is, will she?
“Let’s hear what Alex has to say to us.” Stacey sits down. It’s my turn to stand up.
I look at them. They are confused and defeated. I’ll have to start by giving them the overall picture. But I must be careful to present things as they are, a pep-talk would be devastating. I also know that I must wake them up to take actions. But how?
“I am from headquarters,” I begin. “For me, numbers talk, especially the green numbers. All the companies in the diversified group have improved substantially in the past year, but none are doing well. They improved from heavy losses to roughly break-even, but what we are looking for is profits.
“UniCo needs money. UniCo needs money badly. None of our three companies is bringing in any money to speak of. It’s no wonder the board decided to sell the diversified group. It’s business. It’s hard, plain business.
“About three months ago, the board decided that all three companies were to be put on the block. All were under threat of being, in one way or another, destroyed. There is no way we can reverse the board’s decision. There is only one path open, to improve performance fast. To improve performance to the extent that no new owner will mess around with the way the company is being run.
“For that we need to increase profits. Not by ten percent. Not by a hundred. Not by five hundred. Each company needs to increase its abysmal net profit to staggering numbers.
“It is impossible to do it by cutting costs. It is impossible to do it by working harder. You probably think it is impossible to do it, period.”
At last I get some response. Unfortunately they are agreeing with my last statement.
“The only way to do it is to find new, smart approaches to increase sales.”
I don’t need to be a super expert to read their body language. If there was any hope left in them, it’s dissipating.
“Listen,” I demand. “One of your sister companies has already succeeded. Two months ago they were forecasting nine hundred thousand dollars net profit for this year. Now it’s clear that they are going to make well over ten million. No, UniCo didn’t give them a penny for investment. No, their market didn’t improve. They have done it themselves. They constructed a new, unconventional approach to the market.”
I stop to let them digest, and then continue.
“I Cosmetics was in a worse starting position than you are. Last year they lost almost a million dollars. This year their forecast was to break even. Now they, too, have found a breakthrough in marketing. Everyone is sure they will deliver over thirty million dollars net profit. You can imagine that in the rest of the diversified group, no one is now afraid of losing