Sunday, December 3, 2023

Failure is Always an Option!

Failure is always an option - even for Martin!

A reader writes about their experience in a college course on System Analysis:
I took a System Analysis course...

The final was a problem faced by fictional company we were supposed to assist. I and the rest of the better students got a B. Many were unhappy with this.

No matter what your plan was, if you missed, given the problem and data, that the company was going bankrupt soon, B was the grade.
It was a clever test - most students, and indeed, people, would assume the goal was to come up with a plan to "save the company" and be the hero.  But in some instances, companies (and indeed, countries, governments, or even people) cannot be saved.  Rather than try for a "Hail Mary" pass and hope to pull off a miracle, maybe the best approach is to limit the damage and fallout, so that people can move on.

This seems counter-intuitive to most people.  But if you think about it, it makes sense.  And I have harped upon this concept in this blog more than once.  For example, if you run a business and are short of cash, it may be tempting to "borrow" from the employee's withholding money by delaying payment to the IRS.  This is a horrible idea for two reasons.  First, it will put you so far behind the 8-ball that you never will "catch up" with payments.  Second, the IRS will sock you with so many fines and fees that it will swamp your business - as it rightfully should have been swamped.

A better approach is to realize, if you are thinking of such a plan - that it is a 100% sure sign your business is doomed.  Better off to close up shop in an orderly manner, and lay off your employees with some sort of advanced notice.  Otherwise, people show up to work one day to find the company has "suddenly" closed, when in fact, the writing was on the wall all along.

I wrote before, more than once, about my experiences at the Olde Tyme Gaslight Restaurant in Fayetteville, New York.  I was a 17-year-old stoner who worked as a dishwasher there, but what went on didn't escape my attention.  One night someone knocked on the back door - it was the meat delivery guy.  I told him to put it in the walk-in and he said, "Not so fast!  Nothing comes off the truck until I get paid in cash!"  Seems we had stiffed the meat company and they weren't giving any more credit.  The dinner rush was set to start and the cook (who was also a part owner) scrambled to come up with the money.

He should have closed the place right then and there.  As it was, his Uncle from Utica (who was his partner in the restaurant) was skimming cash off the top and the place eventually folded, owing the landlord, suppliers, the IRS and employees.  The cook shot himself in the kitchen, not even 30 years old, and I never got my last paycheck.  He shoulda shot the Uncle, instead!

Failure is always an option and in the restaurant business, a predictable outcome.  He was young enough to start over, but let his Uncle talk him into going further and further into debt, to the point where he was beyond broke. The key, like in the exam question, was to figure this out before it was too late.

In your personal finances and life, the same is true.  People buy stock in a company they read about online (which is itself a bad idea). The price goes up and then goes down.  And down.  And down.  They could have bailed at the peak,  but thought it was a "good investment" and not a pump-and-dump.  Then it starts to tank, but they are "invested" both financially and emotionally.  Surely the price will bounce-back, right?  So they ride it "all the way down" which I have done a couple of times in my life, before I gave up on stock picking.  Better to get out with something than nothing.

In your personal life, it is also true.  People go to "couple's counseling" to try to save a relationship.  And sometimes, a counselor can't see that it can't be saved - but are willing to bill the couple for endless sessions as they slowly torture each other.  A good counselor should, on occasion, just say, "get a divorce, already, you two are in a toxic relationship!" - which happens.  Sometimes things were just not meant to be.

But like with the restaurant or the stock picking, people try fruitlessly to "fix" a bad relationship, whether it is with a spouse or a sibling or a parent.  I know people in their 70's who are still trying to obtain validation from a parent - validation that will never, ever come as the parent always views themselves as superior to their child (after all, they made them!) and the child is always viewed as damaged goods by the parent.

Even in a "healthy" relationship, this happens.  The next generation has their own ideas and lives in a world of their own - not the world of their elders.  So what they do, think, and say seems alien to us "old folks."  So it is easy to run-down and mock the younger generation. They can't read an analog clock!  Yes, Grandma, but you can't figure out how to get rid of the 10 viruses on your computer, can you?  Being older doesn't always mean you are wiser.

Football coaches - those paragons of intellectualism, say stupid things like "Give 110%" (Clearly Coach flunked math - that is literally impossible) or "Failure is not an option!" when in fact it is a predictable outcome in every game - someone has to lose, right?

Failure isn't all that bad, either.  In fact, it can be better than success.  I am so glad I dropped out of GMI as my future with GM would have been brief and bleak.  I only wish I saw that failure was inevitable and did a better job of dropping out.  But even so, I learned so much from that experience - and one thing I learned was not to fear failure but rather expect it as a routine part of life.

Maybe this seems obvious to most people - or irrelevant.  But I thought it was interesting, as these "System Analysts" such as at Booz-Allen or "The Firm" make a lot of money advising companies as outside consultants.  They make a pile of cash, regardless of whether their advice is any good or not.  That cash could have saved the company - or at the very least, cushioned the blow as the company folded.

In my experiences with Corporations and law firms, when the "consultants" show up, it is time to hit the pavement - you'll be out the door anyway, as the founders of the organization have clearly given up on how to run the place.  Maybe the urge to hire consultants is a sure sign your business is failing and it is time to pack it up.  In every case in my career where management brought in "consultants" to implore us to "work smarter, not harder!" the business folded its tent within a few years.

Failure is always an option, and it is something to think about before it is too late!

Then again, maybe that's why I would never make a good System Analyst.  The point is to bill the crap out of these failing companies, getting paid in advance, of course!