A while ago I was the CRO of Gulf State Steel in Gadston, Alabama.
We were in a board meeting debating the effects of imported Asian steel on our cost structure – the effects were bad – and we decided that in order to remain competitive we needed to reduce our 2500 person workforce by at least 20% while also reducing certain employee benefits.
The day before we’d discussed this with the union representative, and though nothing was official, the news was out.
BAM!! BAM!! BAM!! BAM!! BAM!!
All of a sudden 4 shotgun blasts hit the windows. I hit the floor.
The other directors and board members started laughing at me.
Apparently, they’d installed bulletproof windows in the board room twenty years ago, because shotgun blasts from the union were not an uncommon event.
Now, why did we get shot at?
You may say, because the union was comprised of disgruntled psychos. I wouldn’t fight you on that conclusion, but if this had been happening for twenty years, then obviously there was something else wrong here.
This steel company was in a crunch. It had a huge cash crisis, and it was knee-jerking. There were no more options to contain costs at this stage than a 20% reduction in the work force.
If the CEO had been proactive in keeping costs down 6-12 months prior, though, these kinds of cost reduction processes could have been adjusted more gradually and reasonably – and in ways that didn’t affect the union so dramatically. Asian steel didn’t just show up right before I got there. This was ongoing activity in his market-place and competitive space.
There were options before the crisis, but no one calls me before a crisis. They call me after, and at that point, it’s my job to save a company – not make a series of strategic moves to oust a stronger competitor.
Be proactive. If you have cost problem, an earlier enacted austerity program could keep you from getting shot at. Avoid knee-jerking, and solve your crises before they happen.
And I don’t care if the glass is bulletproof. When I hear unexpected shotgun blasts, I hit the deck.