It's Not Luck (34 page)

“The problem now is more controlling the process. It’s a fine balance between getting more accounts and making sure that no bottlenecks pop up.”

“I can imagine that everybody who uses pressure steam is watching those new accounts with a hawk’s eye,” Granby comments.

“More or less,” I agree. “That’s why it’s so crucial to move prudently. Any serious slip-up and the competitors will blow it out of proportion. They aren’t laughing at our approach any more. They’re starting to panic.”

“They should,” Brandon says. “I still don’t understand how you pulled it off. Yes, we went over all your trees. Forty-seven negative branches. Over one hundred obstacles. I’ve never seen such meticulous planning.”

“What do you want? We didn’t have time for mistakes, so we had to spend extra time planning!” I tease him. “Yes, I agree. Stacey and her people have done a remarkable job.

“I particularly admire how they timed the reduction in their regional spare parts’ inventory with the increase in equipment they had to put on the new clients’ sites. They didn’t need even one cent from UniCo. It was a masterpiece of synchronization.”

“What impresses me the most,” Granby comments, “is how they built their field maintenance force. Taking on board the best maintenance people of their clients as part of the deal was ingenious. It solved so many problems for everyone, in one fell swoop. Impressive.”

I smile. Because of our hiring freeze, I had to fight Granby to the hilt on this exact point. He probably doesn’t remember it anymore.

“So, when do you think we can resume negotiations?” Jim asks.

“I don’t know, it’s really too early to tell. At some point we’ll have to decide, but not now, that’s for sure.”

“I think that about two months from now we should have a good idea what market share we can capture,” Brandon speculates. “Maybe then?”

Granby turns to me, “Is that so?”

“Brandon is right. By that time Stacey will probably have exhausted all her spare capacity. Progress will be dependent on the rate she can train more engineers. Maybe we’ll have to steal them from the competitors, but even then it will take them time to adjust to the way we operate. It’s very different from what they are used to. Yes, two months might be about right.”

“So it’s two months, hmm.” Granby doesn’t sound too happy.

“Is there a problem?” Brandon politely inquires.

“Not really. It’s only that I wanted to have some time to clear my desk. I retire in three months and I wanted to devote my last month to visiting all our facilities. Brandon and Jim, I know that it’s too much, you have already done more than your share, but can I ask you to handle this deal as well?”

“I have a better idea,” Brandon says. “Alex is really the one who led the last two deals. He came up with the concept of what we are selling. He decided which of the prospects would be the best to contact. His presentations are what really made it possible. And let’s face it, he was the one who almost dictated the selling price, first to us and then to the other side. Jim, don’t you agree?”

“Facts are facts,” he says.

“We’ll help, of course. But Alex should formally lead the deal. Alex, don’t you think so?”

“No, I don’t.”

“Come on, stop being modest. It doesn’t suit you,” Jim smiles at me.

“Nothing to do with modesty. I think I shouldn’t lead the deal because I don’t believe that there should be a deal.”

“A typical Alex bomb,” Brandon sighs. “Okay, what do you mean this time?”

“It’s like that joke about Napoleon and the bells,” I answer, knowing that it’s the best way to demonstrate my point. Without allowing them time to object I proceed. “Once Napoleon came to a small village and they didn’t ring the bells for him. Furious, he called the village head and demanded an explanation. ‘We had three good reasons, the frightened man apologized. ‘First is that we didn’t know you were coming. Second, the bell man is sick, and third, we don’t have bells.’ ”

“Nice joke,” Jim enjoys it. “Now what’s the point?”

“We shouldn’t initiate any deal to sell Pressure-Steam because of three reasons. First, there is no more reason to sell. Second, there are no longer any good prospects to sell it to. And third, we need it badly ourselves.”

“Alex, explain, please.”

“What was the original reason for selling the diversified group’s companies? It was the need to improve UniCo’s credit rating. And how much did we expect to get from the sales of all three companies? Less than one hundred and fifty million dollars. And how much have we gotten so far? With today’s deal, it’s four hundred and thirty-eight. How much more do you want? Our credit rating is fine, and admit it, we don’t yet know what we’re going to do with the money we’ve already got. Do we?”

I don’t bother to wait for an answer.

“The second reason is that the best deal we could get would be from Pressure-Steam’s competitors. But how much money is it? They simply can’t raise that much, no matter what. To sell it to anybody else would be a waste.

“Which brings me to the third reason. UniCo as a whole is quite a mediocre company. Sorry sir, but which company in UniCo can we point to as the best in its industry? How about in the top ten? None. We need an internal model. We need a catalyst, a company that will be the school for change. Pete’s company was not appropriate; UniCo doesn’t deal with anything remotely close to the printing industry. Bob’s company was not appropriate for the same reason. But look to what extent Stacey’s company is exactly what we need.

“Almost all our core business companies deal with some mixture of mechanical work and electronics. Almost all of them involve a lot of tailored engineering. They are actually very large job shops. Even if we looked everywhere for a model, Pressure-Steam comes out as the best choice. Gentlemen, we need that company if we want to bring UniCo once again to be the leader that it was. We need Pressure-Steam badly.

They think about what I’ve said. After a few minutes, Brandon turns to Granby, “Next week you are going to present the board with an investment plan. Can you tell us now what you’re going to suggest we do with the money?”

“I decided not to submit any investment plan,” he surprises them. “Bill Peach and Hilton Smyth worked very hard on it, but no matter what they came up with, I wasn’t happy. Nothing was good enough to justify committing the new CEO to it. I decided to leave this headache for my successor.”

“I see,” Brandon doesn’t seem too surprised. He turns to me, “Alex, what would you recommend as an investment plan?”

I know exactly what I would recommend, but it is not for me to say it.

“Come on, Alex, knowing you I’m sure you have some thoughts about it. Speak up,” Jim urges me.

“I prefer not to.”

“Alex, you are between friends here. Tell us your thoughts,” he insists.

“Look, Jim, I don’t think an investment plan can be discussed in isolation. An investment plan should be derived from a strategic direction. So what you are actually asking me is my opinion of the best strategic direction for UniCo. Don’t start me on that, it will take me at least an hour.

“Excellent idea,” Brandon says. “Let’s meet for dinner, the four of us. We need to celebrate.”

“Good,” says Granby. “I’m all for it.”

I’m not. I’m not anxious to ramble on about my unpolished work on how to develop a corporate strategy. But how can I refuse this dinner invitation?

It’s a good thing Julie convinced me to prepare for a new job. Not knowing which company I’d end up at, I procrastinated by trying to figure out how one should devise a company’s strategy. Now it will be handy. There are almost four hours before dinner. I can go over my tree and turn it into a nice presentation. Four hours should be sufficient.

But first, I have to take care of another issue. It’s perfect timing.

I follow Granby into his office.

“What is it, Alex?” he asks me.

“I think that the time has come to talk about my next assignment. Now that I Cosmetics is sold and it looks like we might not be selling Pressure-Steam, I really don’t have a job. Being in Stacey’s way is not what I’d call productive.”

Before he can brush my concerns aside with some empty words, I hurry to continue. I really don’t want to spend the next few months twiddling my thumbs.

“I have been doing a lot of thinking. I have ideas on how to increase the productivity of our companies, all our companies. Not by small incremental improvements, but progressing by leaps and bounds. Like we’ve done in the diversified group. I think that we’ve perfected it into almost a science. I’ll show it tonight, in some detail.”

“That will be interesting,” he says politely.

“So, what I’m suggesting is that I be nominated to a newly created position, executive vice-president of strategic planning.”

He doesn’t say a word.

“I can easily work with Bill Peach. He will be glad to let me in. What I don’t know is how Hilton Smyth will react. But I think you can take care of that. What do you think?”

“I think that you should wait.” He puts his hand on my shoulder. “Alex, what you are proposing has serious ramifications to the organizational structure of the company. I am in no position to make such a change three months before I leave. You’ll have to wait for the new CEO.”

30

As soon as we order cocktails, Jim Doughty gets to the point. “Alex, you promised to tell us your opinion of what is the best strategic direction for UniCo. We are all ears.”

“If you don’t mind,” I say, “I prefer not to talk about UniCo specifically.”

“Alex, don’t do it to us,” Brandon puts both his hands on his heart. “I’ve heard so many presentations on how to choose a strategy. I can’t stand it any more. Tell us something concrete. Please.” Brandon is in one of his cheerful moods.

“Stop it, Brandon, it won’t help you. As a matter of fact, I’m afraid that I’ll have to start with even bigger generalities. Like the question, ‘What is the goal of a company?’ You’ve heard this question before.”

“Yes, too many times.”

“Fellows,” I insist, “if you want to hear my opinion on what we should do with the money, you’ll have to cooperate. So, what is the goal of a company? An industrial company like us.”

“You promise that you’ll reach it? Tonight?” Brandon pleads.

“The goal of our company,” Jim cuts in, “is to make money now as well as in the future.”

“If that’s the case,” I tease him, “then I have a very good strategy for you. Open a bank. Late at night.”

When they finish laughing, I continue. “Choosing a goal is not so simple. We can’t talk about a goal in isolation. We have to work within some frame of limitations. It’s futile to define a goal without defining the boundaries within which we can attempt to reach it.”

“A goal does not justify the means,” Brandon agrees. “So what you’re saying is that together with defining a goal, we also have to determine the necessary conditions that we are not allowed to violate. You are going to suggest such necessary conditions now?”

“Why don’t you try?”

“Not tonight. There are too many of them.”

“Brandon, do you remember our first conversation, almost nine months ago? The conversation that we had in the plane, flying to London?”

“You mean when you said you didn’t have any clue how to increase sales?”

“Yes, you remember,” I smile. “Do you also remember the cloud we wrote? The one that highlighted the perceived conflict between protecting the interests of shareholders and protecting the interests of employees?”

“How could he forget?” Jim says. “That cloud opened the world of the Thinking Processes for us. Carry on.”

Jim is quite impatient tonight. I wonder why? I continue, “The goal of ‘Making money now as well as in the future,’ is how we protect the interests of the shareholders. What about the employees? We agreed that it’s essential to protect their interests as well.”

“I see.” Brandon starts to cooperate. “That’s where you take one of your necessary conditions. What are you suggesting?”

“Something like, ‘Provide a secure and satisfying environment for employees now as well as in the future.’ Make sense?”

“Quite demanding,” Granby speaks up. “I don’t think that we have been too successful at that. But if you can do it, it certainly helps.”

He doesn’t get it, I think to myself, but what’s the point of insulting him. It’s not a matter of “it certainly helps.” If you violate a necessary condition you can’t reach your goal. That is the meaning of the words “necessary condition.”

We at UniCo violated this necessary condition. We laid off thousands of dedicated employees, we didn’t even think that it was our job to make sure that we provided a satisfying environment for our people. No wonder we didn’t succeed in making money. How could we, with a demoralized workforce?

Aloud, I say, “There is another one. Remember what we deduced when we analyzed the current competitive market? We agreed that the market punishes companies that don’t satisfy the market perception of value.”

“You can fool a few customers for a long time,” Brandon rehashes the old cliche. “You can mislead many customers for a short time. But you cannot mislead many, for long.”