5 ms·

It's really remarkable how out of touch large companies can get; especially after years of cost cutting and out sourcing. I once worked at a company that who,

It's really remarkable how out of touch large companies can get; especially after years of cost cutting and out sourcing. I once worked at a company that who, after 15 years of RIFs, offshoring and chasing ever increasing margins, finally cut too deep. One of the critical people cut was my boss, the VP over a product that was an add on to one of the companies major products. Due to accounting the profits showed up on the main products financials, but our product was a critical enabling piece. My boss was RIF'd, simply called one day and told not to come in again, ever. Like some low level employee. After the boss was gone there was literally no one in the executive team who knew anything about the product, it's customers or customer commitments ie signed contracts for features to be delivered. It was a beautiful train wreck I watched first hand. It was amazing to see the VP who did take over slowly learn the magnitude of the f-ck up over the course of several months. They lost several customers. These customers were pissed and literally had no one to talk to at our company. We had support reps fielding calls from CEOs at our customers complaining. A few law suits ensued. It was glorious to see.

fire 5y ago
Dumb Q: what's a RIF?
- StevePerkins 5y ago
  Reductions in force. Fancy term for layoffs.
  - MattGaiser 5y ago
    It almost seems worse than layoff. Like you are just draining a tank a bit to reduce the pressure.
    - sgerenser 5y ago
      No no, that would be a Reduction In Pressure, RIP.
- tomrod 5y ago
  Acronym for reduction in force. Common usage among fortune 500 companies I gather. Layoffs is too passé a term.
  - fatbird 5y ago
    A couple years ago, Hootsuite announced that they were laying off 20 employees at one location, but they termed it as "assisting them in their transition to the next stage of their careers." It was beautifully horrific phrasing, and the predictable field day followed.
    - irrational 5y ago
      We have thrown them off a cliff to assist them in their transition to the next stage of their lives.
    - nyczomg 5y ago
      I worked at IBM a long long time ago, and this reminds me of one of my favorite stories. At the time I worked at IBM, they were going through a series of layoffs (what's new huh?). I kept hearing this term, "opportunity for redeployment" from my fellow team members and others. Sometimes it would be phrased as, "I heard Bob got 'the opportunity'". I eventually asked my bitter/cynical team lead what it really meant and why everyone shook their head in sadness when they heard that someone else got "the opportunity". The answer was simple. These people were being "redeployed" to other companies. And they should probably find the company they will be deployed to next, because IBM is no longer employing them. And the word opportunity made it sound less crappy than reality. Maybe this is my favorite story, because redeploying myself from IBM years ago gave me many opportunities. I hope to someday forget Lotus Notes, Sametime, CMVC, Rational Rose, etc. And good luck to anyone trapped in a place like that.
      - fatbird 5y ago
        Your "redployment" saved you from their current email migration problems. And, ironically, perhaps, I find myself daily battling what I call "The IBM hangover," where large orgs (gov't and private) deal with the legacy systems they now own and the RUP requirements policies left behind. Domino on Powerbuilder; official polices governing change management via UML diagrams.
Retric 5y ago
It gets much much worse. ~20+ years ago, the old AT&T was doing a lot of government contacts. They optimized getting business and providing services, but couldn’t get their billing process straight. Which frequently resulting in them being unable to get paid for work preformed. Literal penny pinching incompetence was costing them millions for years and fixing it was never a significant priority. A classic case of management optimizing for what was being measured. This was also the same company took years to realize they should be consistently charging more money for faster connections. At various points customers would get significant discounts for ordering faster service which cost AT&T more to provide.
- MattGaiser 5y ago
  And the fun part is that hundreds at AT&T knew about that error. I used to be on an innovation team and we did shadow days with staff in other areas of the company to see what was going wrong. We had these crazy sci-fi type projects going on and our sales reps couldn't get brochures and/or visuals consistently as there was no consistent process to order them. Dozens of other similar problems were reported and zip was done.
ornornor 5y ago
> My boss was RIF'd, simply called one day and told not to come in again, ever. Like some low level employee. Just wanted to say that respect is not only for the C suite. Any employee (including sone low level employee) should be treated with respect. Especially when laid off. You’re basically fucking with someone’s living, housing, food, and family when you’re laying someone off. Whether you’re at the bottom of the totem pole or at the top. And chances are it’s a lot more devastating at the bottom rather than the top.
wdr1 5y ago
TBH, this doesn't reflect well on the VP. It sounds like they were foolish in terminating him (and poor in how they handled it), but an org shouldn't fall apart like that because of a single individual -- particularly a senior one. In this case, yes, he was fired, but he also could have been hit by a proverbial beer truck, tapped to run another part of the business, etc.
- lb0 5y ago
  Isn't that what this story is about? It likely wasn't like this before, but they fired people until one became the critical individual...why blame him?
blippage 5y ago
Warren Buffett bought IBM shares in 2011 at $170, and sold them in 2018 at $145. Oops. When he bought, he marvelled at how the CEO was targetting 20% returns on capital. When I heard this, I realised that Buffett had forgotten one of his lessons that he himself espoused: that companies that "target" returns on capital are should be avoided. IIRC, it was one of his reasons for bailing out of Fannie Mae (?). His timing was impeccible on that one, as the whole thing exploded not long thereafter in the 2008 financial crisis. Also at the time of his purchase, it was known that the company was beginning to offshore. It struck me at the time that this could cheapen the whole thing and turn into a disaster. So there were at least two facts at play here that should have forewarned Buffett that it might not be a good purchase. I was actually pretty astonished at the time that a guy as savvy as Buffett didn't seem to anticipate the problems ahead. And now we come to the $64,000 question: how does a company add value to shareholders? It's a simple question, but I bet most won't know the answer to it. The answer is provided by Prof. Damodaran Aswath: a company adds value by targetting returns on capital in excess of the cost of capital, risk-adjusted. So actually, doing stuff like maximising returns on capital is a sub-optimal goal. Not that you should invest in something marginal, either. Another problem with these corporate-type guys is that they do a lot of "management by numbers". It's all about "KPIs" (Keypoint Indicators) and other "metrics". Back when Motley Fool wasn't a shitpile that it is today, there was a guy in the UK that put together a portfolio of "family companies", i.e. quoted companies with a substantial management and/or family stake. How did the companies fair? Very well, actually. The portfolio did great relative to the indices. Why? Well, my conclusion is that family-concentrated businesses were run conservatively as proper operating businesses, rather than a bunch mathematical formulae to be tweaked and fiddled with.
- pas 5y ago
  > So actually, doing stuff like maximising returns on capital is a sub-optimal goal. Could you explain why this is sub-optimal? It's sub-optimal because of the added risk? How does this work for very big companies that have to engage in multiple markets simultaneously (due to couplings between markets and other competitors - eg. FB bought Instagram, but FB's main market was not buying other social media companies, but it fit into their strategy to get more active users)?

fire 5y ago

Dumb Q: what's a RIF?

StevePerkins 5y ago
Reductions in force. Fancy term for layoffs.
- MattGaiser 5y ago
  It almost seems worse than layoff. Like you are just draining a tank a bit to reduce the pressure.
  - sgerenser 5y ago
    No no, that would be a Reduction In Pressure, RIP.
tomrod 5y ago
Acronym for reduction in force. Common usage among fortune 500 companies I gather. Layoffs is too passé a term.
- fatbird 5y ago
  A couple years ago, Hootsuite announced that they were laying off 20 employees at one location, but they termed it as "assisting them in their transition to the next stage of their careers." It was beautifully horrific phrasing, and the predictable field day followed.
  - irrational 5y ago
    We have thrown them off a cliff to assist them in their transition to the next stage of their lives.
  - nyczomg 5y ago
    I worked at IBM a long long time ago, and this reminds me of one of my favorite stories. At the time I worked at IBM, they were going through a series of layoffs (what's new huh?). I kept hearing this term, "opportunity for redeployment" from my fellow team members and others. Sometimes it would be phrased as, "I heard Bob got 'the opportunity'". I eventually asked my bitter/cynical team lead what it really meant and why everyone shook their head in sadness when they heard that someone else got "the opportunity". The answer was simple. These people were being "redeployed" to other companies. And they should probably find the company they will be deployed to next, because IBM is no longer employing them. And the word opportunity made it sound less crappy than reality. Maybe this is my favorite story, because redeploying myself from IBM years ago gave me many opportunities. I hope to someday forget Lotus Notes, Sametime, CMVC, Rational Rose, etc. And good luck to anyone trapped in a place like that.
    - fatbird 5y ago
      Your "redployment" saved you from their current email migration problems. And, ironically, perhaps, I find myself daily battling what I call "The IBM hangover," where large orgs (gov't and private) deal with the legacy systems they now own and the RUP requirements policies left behind. Domino on Powerbuilder; official polices governing change management via UML diagrams.

Retric 5y ago

It gets much much worse. ~20+ years ago, the old AT&T was doing a lot of government contacts. They optimized getting business and providing services, but couldn’t get their billing process straight. Which frequently resulting in them being unable to get paid for work preformed. Literal penny pinching incompetence was costing them millions for years and fixing it was never a significant priority. A classic case of management optimizing for what was being measured. This was also the same company took years to realize they should be consistently charging more money for faster connections. At various points customers would get significant discounts for ordering faster service which cost AT&T more to provide.

MattGaiser 5y ago
And the fun part is that hundreds at AT&T knew about that error. I used to be on an innovation team and we did shadow days with staff in other areas of the company to see what was going wrong. We had these crazy sci-fi type projects going on and our sales reps couldn't get brochures and/or visuals consistently as there was no consistent process to order them. Dozens of other similar problems were reported and zip was done.

ornornor 5y ago

> My boss was RIF'd, simply called one day and told not to come in again, ever. Like some low level employee. Just wanted to say that respect is not only for the C suite. Any employee (including sone low level employee) should be treated with respect. Especially when laid off. You’re basically fucking with someone’s living, housing, food, and family when you’re laying someone off. Whether you’re at the bottom of the totem pole or at the top. And chances are it’s a lot more devastating at the bottom rather than the top.

wdr1 5y ago

TBH, this doesn't reflect well on the VP. It sounds like they were foolish in terminating him (and poor in how they handled it), but an org shouldn't fall apart like that because of a single individual -- particularly a senior one. In this case, yes, he was fired, but he also could have been hit by a proverbial beer truck, tapped to run another part of the business, etc.

lb0 5y ago
Isn't that what this story is about? It likely wasn't like this before, but they fired people until one became the critical individual...why blame him?

blippage 5y ago

Warren Buffett bought IBM shares in 2011 at $170, and sold them in 2018 at $145. Oops. When he bought, he marvelled at how the CEO was targetting 20% returns on capital. When I heard this, I realised that Buffett had forgotten one of his lessons that he himself espoused: that companies that "target" returns on capital are should be avoided. IIRC, it was one of his reasons for bailing out of Fannie Mae (?). His timing was impeccible on that one, as the whole thing exploded not long thereafter in the 2008 financial crisis. Also at the time of his purchase, it was known that the company was beginning to offshore. It struck me at the time that this could cheapen the whole thing and turn into a disaster. So there were at least two facts at play here that should have forewarned Buffett that it might not be a good purchase. I was actually pretty astonished at the time that a guy as savvy as Buffett didn't seem to anticipate the problems ahead. And now we come to the $64,000 question: how does a company add value to shareholders? It's a simple question, but I bet most won't know the answer to it. The answer is provided by Prof. Damodaran Aswath: a company adds value by targetting returns on capital in excess of the cost of capital, risk-adjusted. So actually, doing stuff like maximising returns on capital is a sub-optimal goal. Not that you should invest in something marginal, either. Another problem with these corporate-type guys is that they do a lot of "management by numbers". It's all about "KPIs" (Keypoint Indicators) and other "metrics". Back when Motley Fool wasn't a shitpile that it is today, there was a guy in the UK that put together a portfolio of "family companies", i.e. quoted companies with a substantial management and/or family stake. How did the companies fair? Very well, actually. The portfolio did great relative to the indices. Why? Well, my conclusion is that family-concentrated businesses were run conservatively as proper operating businesses, rather than a bunch mathematical formulae to be tweaked and fiddled with.

pas 5y ago
> So actually, doing stuff like maximising returns on capital is a sub-optimal goal. Could you explain why this is sub-optimal? It's sub-optimal because of the added risk? How does this work for very big companies that have to engage in multiple markets simultaneously (due to couplings between markets and other competitors - eg. FB bought Instagram, but FB's main market was not buying other social media companies, but it fit into their strategy to get more active users)?