Lessons Learned from the Fall

This is  the story of one business that would have survived normal times.  However, like many businesses, errors that would have caused hardship in other circumstances, caused this business to fail in extraordinary times.

I could take you back before 2008 into the history of this 85 year old family held company, with 400 employees, that had survived three generations.  But it isn’t necessary.  Let’s start where the drama begins; the prior plot line is unimportant.

Lesson One – You Are Not In Control

It is sufficient to say that we were on the edge of our seats by November 2008.  Through everyone’s efforts, the business had held steady through spring.  Soft, but holding.  By August, business began to dry up.  The stock market fell through the floor in September and then no one was buying luxury.  Throughout the fall, our most critical season, we did what we could: scheduled promotions, created discounts, ramped up phone calls, improved selling skills and worked together to keep our spirits up.

By November it was clear that nothing would work.  In 2001, when the recession followed 9/11, we didn’t have time before the holiday season to be proactive.  In 2008 we did – and it didn’t matter.  Eight years ago we would have survived.  This year we wouldn’t.  Our parent company had gone into major debt for another chain of stores in 2007.  As the holiday season began in 2008 it was clear that the debt from that purchase would bankrupt the company.  Debt was the major story of 2008.  Our company was a tiny lifeboat, capable of holding most of our passengers.  However, attached to the Titanic, we were going down.  Although we worked hard to shore up the business and cut expenses, nothing we were capable of would help us avoid the inevitable.  We learned too many lessons about debt and began to understand that we would need to prepare for the end.

Lesson Two – You Are The Only One In Control

As our parent company began the process of engaging lawyers and restructuring experts, they became largely absent from our day to day activities.  Not that they didn’t provide us with an enormous number of information gathering tasks.  They were too absorbed in their world to provide any real leadership.

As leaders in our smaller world, we couldn’t wait for them to make decisions or fashion communications.  It was clear that nothing would happen in a linear fashion with planning.  Each of us would have to begin to look out for ourselves and work to let our staff know that they would likely need a lifeline also.  Sometimes you can’t wait for a signal to help those around you.

So we began to work for ourselves and help our staff update resumes, refinance our houses and network externally.  As leaders, we worked to continue to move the business forward in the event that there was a miracle and we were bought out or some small piece of the business would emerge from bankruptcy.  With our remaining energy we tried to help people plan for their own future – in the likelihood that we wouldn’t (have a miracle or a company).  While we had to keep our eye on the business, we also had to help individuals keep an eye on themselves.  We also learned that business and personal strategy are not just for growth, sometimes it’s more important to strategize for a crash landing.  In fact, clearing the undergrowth and scoping out a safe landing field may be the most important thing you ever do.

Lesson Three – Communicate (no news is rarely good news in a crisis)

The process was overwhelming at times.  As in any crisis, there were numerous mixed signals.  “We are going forward,” “We are not going forward,” “There is a buyer.”  “Prepare for a crash landing” – no one actually made this last statement – we had learned to read between the lines.  In the midst of all of these messages, communication among our small team was key.  Everyone had to be checked in with almost daily.  Our small management team kept in touch to find out the rumor of the day and decide how and if to respond to it.  In this age of the Internet, there was the added pressure of the media and semi-public information, sowe had to regularly decide what to communicate and when to interpret.  We generally came down on the side of both communicating what we knew (or had heard) and helping others make some meaning of the public information.  “Important, keep your antenna up, it really doesn’t matter, focus on _____ instead.”  We learned to communicate regularly, align frequently, and interpret (and re-interpret) often.  We all developed our own allies in the parent company to help us understand how to interpret events.  Formal chains of command rarely mattered.

Lesson Four – There Is Still Pride In Doing A Good Job

Yes, amazingly, mundane work still needed to be accomplished.  There was nothing strategic about any of it.  Requests from our parent company and the multitude of ‘important people’ (lawyers, restructuring specialists, banks, etc.) who would actually make money off this mess, were daily occurrences.

Sometimes the tasks took on the feeling of preparing for a major military campaign, depending on their complexity.  And then, of course, there was the constant task of preparing ‘packets’ for people who were leaving on a weekly basis.  Or re-preparing the packet for the people whose ‘date’ had been postponed (7 dates over the course of 14 months was our record).  Everyone was overburdened – no one complained – no one ‘fudged’ the data.  We continued to be proud of our ability to complete work in a timely, organized and accurate fashion.

Lesson Five – Balance And Relationships (and some fun) Matter – A Lot

By April 2009 – just three months after our poor Christmas season – our parent company announced that our local offices would be closed for good and  the majority of our staff laid off in June (thank goodness for federal WARN notices, which gave many people a two month reprieve).

As the chaos at the executive level continued, it became apparent that the only place for our focus was on the employees involved.  The banks, corporations, restructuring specialists, lawyers – it was like watching a real life version of Clash of the Titans.  Although the company was still cutting our paychecks and demanding our loyalty, we began to see that our primary moral obligation was to assist individual employees.  As a management team, we needed to set an example with positive attitudes by continuing to take pride in our work and paying attention to the emotional damage felt by our people.

Who was suffering the most today?  Whose spouse had lost a job and was in panic mode today?  Who had a job interview tomorrow and needed help preparing?  Who hadn’t done their resume yet and needed to be gently pushed to that end?  Who had a handle on the stress and who didn’t?  Who needed a walk around the block or a tissue?  We kept tabs through popcorn, chocolate and frequent meals together.  We celebrated our years of service, posted pictures, bid adieu with flowers and food.  Our spirits mostly stayed high and we tried to spend little time on where we didn’t have control.  These actions helped us maintain our balance despite our exhaustion.

Several WARN dates and 390 employees later, ten of us finally closed the office on March 26, 2010, almost a year after the first layoffs.  For the management team, it was 16 months after we began to understand the inevitability of this result.  Most of us were too exhausted and off balance even to search for a job immediately.  Two months later, some of us have begun to land jobs or start new businesses.  Most of us are still out of work – for some it’s almost a year now.

Most of us have discovered social media and networking in a big way.  We have kept in touch through Facebook, Linkedin, frequent calls and walks around the block.  We have celebrated successes and worried about failures.  Naturally, people have begun to splinter.  We all have a feeling of success when one of us succeeds and a continuing feeling that those of us who do find jobs will reach out to others, where possible.

And The Final Lesson

As with any experience, the lesson is in individual resilience, individual decision making and the ability of the team to strengthen and support each other in a positive way.  It is those relationships that we build that provide us with the lessons we need to learn for the next time.

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Yes! You may use this article by HR Consultant & Executive Coach, Ronnie Grabon, in your blog, newsletter or website as long as you include the following bio box:

Ronnie Grabon, SPHR, received her BA and MBA from Rutgers University. she is an Executive Coach and HR Consultant for companies and individuals undergoing transition.  After 30 years in corporate work, she recently completed her own transition by serving as VP of HR for a company undergoing bankruptcy and liquidation.  Over the last ten years. Ronnie has coached more than 500 people at the Center for Creative Leadership, as well as consulting with individuals, businesses and non-profits.  Ronnie can be reached at rgrabon@triad.rr.com or by phone at 336-706-1621.  Ronnie’s coaching profile can be found at TheCoachingAssociation.com.