When Businesses Fail
In recent months, I have been receiving a number of calls from former colleagues, distressed by the impact of decisions that affect their employment status. For many, the nursed dreams and the pursuit of happiness, are threatened by deleterious decisions orchestrated by owners of capital. Lives are inextricably linked to the old formulae of earning a degree, getting a job, surviving that job until retirement. The much referenced baby boomers did it and for a time this became the mantra of successive generations. Things have definitely changed. The industrial age has given way to the information age, which has transformed how businesses interact with the external environment. Of significance is the manner in which resources can be harnessed to re-invent and re-configure business models to suit specific needs.
The history of employment practices is now being revisited and refashioned to reflect the changing dynamics. Not many owners of capital has been swift in identifying opportunities at the right time. The oft heard cry is inadequacy of financial resources to respond post-haste to the changing landscape. Whilst this may be true, there is the belief among many employees that owners of capital have lined their pockets with the profits made, failing to apply the financial resources necessary to improve operations. Such perceptions feed the informal communication channels and will lead to trust challenges.
Owners of capital and those who provide labor cannot divorce themselves from each other. Each perceives differently, the other’s role in this union, with differences being reinforced by state policies. The reality is that each actor needs the other, irrespective of the role of technology in driving businesses today. Being buttressed from all angles, the humans in the equation have a common interest. That interest of ensuring the business succeeds, should be championed as a shared interest with the applicable steps taken by both to ensure that the interests are met.
As I write, there is a story that is unfolding, where the interests of the principals are at odds with the interests of labor. The problematic issue in this case is the convoluted nature of the business arrangements. The company belongs to the hospitality sector and has been managed by a number of internationally branded hotels, that have sought to have funds injected into the property to enhance revenues. In essence, bringing a contemporary look and feel to the company would have at the time these discussions were being held, promoted this property into one of the finest “hangout spots”. Visionary leadership coupled with refurbishing efforts would have secured a tangible future.
Unfortunately, bad business decisions prevailed and the international brands, rather than losing their reputation, made the decision to leave. This decision follows on the heels of damages to the structure which was caused by a fire. All stakeholders are affected. That is without question. The ones who appear to be hardest hit though are the employees, many of whom are ill prepared to move into other spheres.
I believe in challenging situations, new ideas are born. The fear of failure prohibits many from engaging in new prospects. The reality has smacked many of us so badly that we are forced to reassess our future. Companies will fail as many do not adapt well to change. Myopic leadership, failed investments, untrained workforce, lack of resources to improve competitive edge, extreme tax obligations, white collar and blue collar crime, corruption and criminality, economic turbulence (internal and external), mother-nature and man-made disasters, are all par for the course. Obviously one or a combination of the challenges outlined above have proven to be disastrous to successful business outcomes.
Companies strategize as best they can. Even if we are not business moguls, at our most basic enterprise (the family), we also strategize to reach desired goals. Obstacles are encountered along the journey so it is necessary to ask the what if’s and create a list of things to do in the event.
When businesses fail, there is the trickle down effect. You may not experience the impact immediately, save for those who are directly associated, but it does impact the economy eventually.
Copyright 2013 Suzette Henry Campbell