Friday, March 20, 2009

Petty and Hateful

I know this post will come off as being petty and hateful, but I have to say, when a company lays you off you expect them to rein in the extravagant spending in an effort to be more in the black and less in the red, right? Because that would sort-of-but-not-quite justify the fact that they made a mistake, and are back on track now.

That has not been my experience. Why? Because the company that laid me off in September announced a contest to their sales force. The prize? A cruise to the Bahamas, including airfare.

I will say, yes, I understand that the company is a multi-level marketing company, and they play by different rules than a traditional corporation. Yes, I understand that their sales force is not made up of employees, but of independent business owners. And yes, I understand that it's not like the sales force gets annual performance reviews or can get fired if they don't sell enough product. Yes, the company needs to offer incentives to get the sales force "fired up" and productive.

But (with my inside experience) I also know that this company has never managed to offer an incentive or annual event that has broken even, much less made them money. They have ALWAYS lost money on these things.

In theory, and the way other multi-level marketing companies do it (at a profit), the company calculates how much the cruise will cost per person, then take into account the profit margin on each product sold, and they know how much product a single member of the sales force has to move in order to pay their own way on board the boat. Then the general wishful thinking is that the sales force wants the cruise so badly they do everything they can to sell enough product to win that cruise, thereby exceeding those goals. Plus there is an expectation that not everyone who tries to make the goal will accomplish it, but will have generated more sales than they would otherwise have done in the same period of time. Thus the incentive has worked, and has gained the company money over and above what the actual incentive winners have brought in. Not to mention the good press about the company awarding cruises to top-achievers. And the winners themselves bragging to everyone and anyone about how they won a cruise, and bringing in more money in sales, ad nauseum.


Except I know the president of this company. His thinking has less to do with stopping the hemorrhaging of money out of the company and becoming profitable, and more to do with being able to take his girlfriend and his two teenage daughters on a vacation, and then writing it off as a "business expense" paid for by they company on the backs of the sales force. Because of course the president has to attend and lead sales strategy meetings, and glad-hand and network, and in general act like a slimy car salesman. Of course he has to go on the cruise. And if he's going, he can't deprive his girls of the chance to attend either, so the company has to pay for them too. And anyway, it's cheaper to have double or triple occupancy than to pay the single rate ... etc, etc, blah, blah, I'm going to do what I want anyway, typical screw-the-company-I'm-the-president bull$hit.

I will admit stupidity is not limited to the executive level; the president is not the only one who does not know how to run an event at a profit. The last event I staffed was in March of last year, and during the debriefing session it came out that the T-shirts sold at the event were sold at a loss. Apparently the person in charge of that aspect based the sale price of the shirts on how much it cost to produce the shirts, and didn't add in how much it cost to ship the shirts to us so we could sell them. Thus the company lost something like fifty cents per shirt.

Stupid stuff like that, repeated over sixteen years in business, maybe you would think it's time to hire new staff, or replace the dumba$$ in charge?

No, this company, or at least the president (who owns the company outright), likes to send good money chasing after bad. Anyway, the President just takes a loss on his personal income taxes for the company while enjoying "executive perks" like a Mercedes sedan, an iPhone, and a Macbook he charges to the company because he uses them occasionally for company business.

Crap like this, in a small business that employs (currently) 14 people? It's no wonder large corporations ran our economy into the ground if our small businesses act this way and get away with it.

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