Sounds to me like this guy has created a fantastically shitty place to work, and an equally shitty company to do business with. You can't get away with abusive behavior towards employees and vendors and expect to keep the good ones around - anyone that's worth the money has far too many options to put up with cheapskate asshats like this. If you treat everyone like shit, don't act surprised when only shitty people continue to work with you.
When a client starts dicking around with payments for work already provided and doesn't have a really good reason (yes, occasionally things happen and it's okay to be a little flexible if you're convinced it's on the level), my rate for future work doubles, and if that means that projects go elsewhere, so be it. Fighting over payments is possibly the most unpleasant aspect of providing services to companies, and I'd generally rather pass up the work than get into those fights.
Don't follow this guy's example - you're not important enough to afford to be this abusive, and frankly, neither is he.
Sounds like this guy's model is very similar to my first employer on my career path, which I shall not name. This company's specialty was retaining "B" grade talent and motivating them with fear. Oh, and screwing vendors too. The company made the founder a household name and fabulously wealthy.
This article almost reads like a list of stuff NOT to do, in my opinion.
Of course, I am more of the "build something lasting, and of quality, and get on with your life" school than the "money over everything I'm going to die here at work" type.
I would not want to work for, with, against, near, or around this guy. He advocates CHEATING his vendors, to force them to basically give you money. Well, I suppose it would only be fair to not pay his company, right?
Anyone else have any feelings other than general disgust at the idea of working with this guy?
"I feel that I should triple the size of the business over the next 10 years because I’m getting old. I’m a little dissatisfied we haven’t done that...".
Gee, I wonder why. I've seen companies with very lavish perks and non-micromanaged employees more than double every year they've been in business. So I'll take 300x the return over 10 years, treat my eventual employees with respect, and love my eventual wife more than my work thank you very much Mr. Grumpy Pants.
My theory is that small business owners are upset that the whole "owning my own business" wasn't as great as their imagination suggested beforehand. It turns out that being "the owner" doesn't make you rich, and it doesn't give you a lot of free time. You have to work harder than the "average joe", and you don't get much out of it except for the comfort of knowing you are in total control of everything. This tends to make people bitter, because "it's not fair".
One other thing I've noticed is that owners of small companies expect you to care about the company as much as they do. I personally find this to be quite irrational (and this apparently annoyed the owner of the last company I worked for).
>One other thing I've noticed is that owners of small companies expect you to care about the company as much as they do.
This annoys me too. At my last "real job", my supervisor informed me that the super-bosses were asking for ten hour work days in part to "test our loyalty to the company".
My response to that was something like, "Why should my loyalty exceed the bounds of our employment agreement? I'm here for eight hours of work a day. I don't have any stake in this business, I don't own any part of it, the super-bosses don't care or know me, and why should I sacrifice time with my family to make them richer when they won't even extend sick time?"
To be fair, he didn't advocate cheating vendors, it was the reporter who claimed that he recommended not paying vendors on time.
His response was that he tells businesses to honor their word, but to negotiate terms. Of course, if you negotiate after you receive the goods, that's scummy, but I don't think that's what he meant.
Lots of big businesses extend their payables when negotiating with suppliers, why can't smaller businesses try to do the same?
It's quite normal in any company to avoid paying invoices until the very last minute. It only depends whether that is "on the day" or "when we get a letter from their lawyers".
It's entertaining, as an engineer, to see your accounts department deal with a vendor who doesn't threaten, they simply shrug and switch you off. The most entertaining example I ever saw of this was back in the 90s, when the company I was working for "lost" all its clients domain names... Of course I had kept copies of the email renewal notices I'd forwarded to them.
He's not only an asshole, but he wrote a book about why everyone else should be one. I don't even know if there's a name for someone who takes it to that level.
Some of the biggest douche I have met in my life are Management Consultants. Makes me wonder if being a douche is a prerequisite to Management Consultant position.
First, I have to acknowledge the points I agree with. You do have to love your business, and you do have to have systems for tracking the correct financial measurements (backwards and forwards).
But I have to wonder if, at some point before he drops dead in his office, George will realise the connection between treating your vendors as interest-free loans and staff as unlikeable, and his experience that "Getting good people is 100 times more difficult than conventional wisdom says".
IMO you've got to find the proper amount of indifference and micromanaging. If you act the way the guy in the article says to act you will have a hard time finding good people, and actually keeping good people will be impossible.
It's not surprising given his attitudes that he has problems finding good people. Also, it sounds like he is in the business of selling platitudes not creating new products. I'm sure people who take his advice see profitability miracles like Fiorina realized at HP. There is certainly money to be made following his advice in mature industries, but I'm not sure that it's particularly good for innovative industries.
About half way through, I was thinking I'd like to read a debate between him and Tim Ferriss. Then:
"Q. What do you think of “The 4-Hour Workweek” [a best-selling book by Timothy Ferriss]?
A. Oh, forget it. I haven’t even read it yet. I don’t want to die of laughter."
Of course, this is also a man who:
"I semi-retired for about five years and that was probably something I won’t do again. They’re going to carry me out of here in my shoes."
Meanwhile, Tim Ferriss is traveling the world, not thinking much about money, learning languages, winning dance and fighting competitions, etc. If I were a small business owner, Ferriss' end results would appeal to me much more.
This was also a classic exchange:
"Q. You say, “Love your business more than your family.” What does your wife think of that?
I'm surprised how negative most of the comments here are. The guy's views are a bit extreme, but in my experience there is a lot of truth to what he's saying. In a perfect world you'll have brilliant, self-driven employees; you can give them great conditions and direction, collect status reports once a week, and everything will get done. In a real world this is nearly impossible - most smart people are not self-driven, if you give them good conditions they'll sit around and browse the web all day. Think how much this applies to most of us! Unless there is uncertainty and a reasonable degree of pressure, most people won't perform well. Employees that are smart and self-driven are one in million, there aren't nearly enough of them for thousands of businesses in America.
I think not wanting to implement this type of workplace for my small service based company is exactly what's been keeping us from taking things to the next level. For us, it's been worth it to have a relaxed work environment with happy employees, but I'd be lying to myself if I didn't think it came at the cost of some decreased profits. I also find myself questioning our motivations for doing such -- is it just easier on us, as owners, to have a less stressed workplace? Are we afraid of being disliked by employees? Are these good reasons?
Anyways, the article does sound like a nightmare for any technical person, where creative liberty and freedom to innovate aren't fostered while under micromanagement. However most US businesses, despite HN's demographic, don't fall into this category.
I always wondered what self-driven means. I always thought that it was HR-speak for "enjoys doing slave labor for very little money while making somebody else more rich".
Although I have stayed up all night coding for the benefit of someone else, I have long since grown and learned that it was a stupid thing to do.
This is insidious: whether intentionally or not, this guy is spouting stuff that validates and reinforces the unfounded beliefs of many (going back many centuries) that people who meet with success deserve it and people who are dealt failure must have done something wrong. Anyone who wants to believe that that's the case will latch onto this guy and say, "see? SEE?"
His tough guy stance moved from being somewhat intriguing to laughable once I got to his comments about family and the subsequent admission of being married three times. The guy is not without his points, but he's definitely overstepped himself I think.
I don't think most small-business owners are really like this, fortunately. It'd be a pretty sad world if it were really true that "profits aren't everything, they're the only thing".
"You have to work on stretching your payables because every dollar you get in extended payables is an interest-free loan"
Wouldn't it be better to simply ask for more money up front, rather than creating a shitty relationship by trying to stealthily extract more money through interest? I think trust between business partners is worth a lot, and not paying bills on time is not good for building trust.
I imagine that these two men are so diametrically opposed that if they ever came into direct contact with each other, they'd instantaneously cease to exist!
If this is the American Management Services I remember from years ago, they were a standard DC-area government contractor. Having once worked for one such, I have to think that running AMS is not quite the same thing as running a company that produces something other than billable hours.
This advice probably works just fine for a chain of fast food restaurants, or discount clothing stores, but not a business where good people are required. Judging by his website, he's already scared away good graphic design help.
And the ghosts of beloved wives, children and colleagues DON'T come to visit and warn him. No one loves him and no one ever will. He loves only his money, with which he will be buried. He thinks Scrooge was just weak.
The first half of the article is mostly OK advice out of the guy -- it was the reporter who made the outrageous summaries like "cheat your vendors", and the "micromanagement" part didn't seem micromanagey as much as it seemed to mean "stay informed" -- but the end is just terrible. Loving work more than family is seriously one of the worst ideas ever.
Man has no children, third wife, is old and will work until he dies. What kind of life is that? This article is very sad, and I hope everyone immediately recognizes its cruelty and myopy and disregards it.
Kudos to interviewer Kermit Pattison for letting this penny ante Gordon Gekko speak so clearly in his own words.
This is actually a good lesson in marketing. Everything he says recasts the situation in terms of a problem that management consulting can fix with simple solutions.
It's not the recession, it's poor salesmanship. A problem that can be solved by a consultant. A massive pan-industry collapse in sales, inventory, credit, and utilization could not be fixed by three ring binders and training classes.
Lack of vendor financing. A problem that can be solved by a consultant tightening the screws, backed up by a long list of companies that were helped. This is survivor bias. The successes are selected for companies whose vendors are idiotic enough to finance their customers AND lucky enough to survive the folly. It also relies on the presence of other parties who are willing to buy mis-rated bonds and do factoring (loaning against small business receivables). Both of these are being choked off, and may well come to an apocalyptic end as the financial collapse continues. Whereupon all his "saved" clients will blow up.
"Getting good people is 100 times more difficult than conventional wisdom says. The fact is, you’re going to deal with a lot of mediocre people, no matter how hard you try." In other words, your employees are sabotaging your company, because all employees do this. The only solution is new management policies.
Fear is the best motivator. Soliders have a word for leaders like this. Fragged.
Wow - thank you. Before your post, I had never seen the term 'fragged' outside of the context of video games. Its original meaning that you've alluded to is far more interesting.
Amazing. Only I thought Pattison was guilty of asking too many softball questions. There's not a single question here on the parenthetical sideswipe that teamwork is “vastly overrated”.
There is some business wisdom about having a backbone in some areas that trip many small companies up, but when I got to the "vendor financing" remark, my judgement of this man was much harsher than "penny ante" as his tough love jumped the shark for a splash landing on shifting-the-burden.
My financial discipline is my vendor's financial shame. Nice one. Always want to be your vendor's least favourite customer when they run into a production glitch. Shite happens in the supply chain no matter how vicious your management style, and it ripples through on a selective basis.
This is classic Taleb: painfully grind out a one cent advantage every day, then take a $20 hit when the black swan rides again, at which point you excuse positioning yourself to take the brunt of the pain because 99% of humanity is weak in the knees, which is another view he expresses.
PS: thanks to y-comb for letting me type this out before demanding an account. Love that up-front business attitude.
When a client starts dicking around with payments for work already provided and doesn't have a really good reason (yes, occasionally things happen and it's okay to be a little flexible if you're convinced it's on the level), my rate for future work doubles, and if that means that projects go elsewhere, so be it. Fighting over payments is possibly the most unpleasant aspect of providing services to companies, and I'd generally rather pass up the work than get into those fights.
Don't follow this guy's example - you're not important enough to afford to be this abusive, and frankly, neither is he.