The following is a fictionalized version of real events at one of Ken’s businesses.
Rise and Fall
By Ryan Carter
It was a hot, dry day in California’s central valley. Steve was skateboarding with his friends on a Saturday afternoon. While sipping on sodas, they sat down on the curb. “Steve, when are you going to get a real job? It’s been two years since we graduated high school,” one of his friends inquired.
“Actually, I just heard about a beginning job with a local electrical company. I think they install the large pumps to irrigate the valley,” he responded. “I am supposed to meet with a guy on Monday.”
Steve, though young, was enthusiastic and driven. He had a certain charisma about him that was hard to ignore. Catching the eye of Bob, the regional manager, he was hired on the spot. He reported for work the next day. The work was hard, the days were hot, but he liked it. It was rewarding to see the water flow through the fields and he felt like he was learning a meaningful trade. Under the tutelage of a more seasoned journeyman, Steve quickly learned the ropes. He absorbed new information quickly and had a knack for figuring things out. After two years he was promoted to a technician and could perform work from his own truck without any direct supervision.
In his new role Steve excelled even further. He liked having the extra responsibility and did well under pressure. He understood that the business relied on getting the company’s name out in the public and he did well at finding new customers. The regional manager started to hear good things about this budding star in the company.
“Tom, how is Steve coming along in his new position?” Bob asked his branch manager.
“Bob, he is doing great. We took a bit of a risk on him in the beginning, but I think the potential we saw in him is starting to show. He has already brought in 3 new jobs this month,” Tom replied.
Four years after Steve started, the branch manager decided to leave the company to take another position. Despite having the least experience, the other employees in the shop expected Steve to take his place. They’re assumption was correct and the regional manager called on Steve to take over.
“You know, there will be a lot of weight on your shoulders. You have shown that you care for the company and I believe you have what it takes to be a leader,” Bob told Steve.
Along with his new responsibilities as branch manager came a healthy pay increase, which Steve was glad to receive.
During Steve’s first year as manager things were going great in the company. The economy was good and there was a lot of work to do. The branch even had to hire a couple of extra people to keep up with the demand. Steve’s charisma helped him motivate the crews and he was well liked by the other employees. They started having company barbeques on Friday evenings after work. Steve treated everyone like family.
Steve continued to bring in new customers and bid on even bigger contracts. He successfully completed several large jobs, netting the company some healthy profits. Bob was pleased with his choice of branch manager. Shortly after his first year, Steve had a meeting with Bob.
“Things are going pretty well at the shop and I feel like I am helping the company make quite a bit of money. I think I deserve a raise,” he told Bob.
Bob recognized that Steve was doing well, but he also recognized that Steve’s compensation was already very competitive in the market.
“I think you are doing a great job, I think it’s time we talk about some type of bonus structure and profit sharing,” Bob stated.
He then went on to explain that a certain percentage of Steve’s compensation would be tied to volume and profitability at the branch. With the way things were going in the company, Steve was very happy with the amount of money he would be making.
A year later, the economy began to slow and the branch began losing profitability. Bob met with Steve to show him some of the numbers. An investigation in the accounting books showed that the number of billable hours had declined, yet the employees were still taking home full paychecks.
“We need more billable hours to support the number of staff we have. Either you find some more business or we will have to start cutting back hours,” Bob said.
Steve was dismayed by the fact that some of the employees might have to reduce their hours. He was also frustrated that his compensation had diminished due to the falling profitability. He had difficulty understanding why he was being paid less because the branch was not doing well.
As time passed by, things did not improve. The economy and the subsequent amount of work continued to plummet. Steve was not able to find enough customers to create sufficient billable hours to keep all of his employees busy. Rather than cut hours, Steve would put two or three people on a job that only required one person. This would result in going over budget on large contracts and the company would lose money. Additionally, he would bill smaller customers more hours than necessary because the extra manpower was inefficient.
A series of monthly meetings convened between Bob and Steve. Bob was very concerned about the financial state of the company. During one meeting he said, “We are losing a lot of money. We just can’t keep all these employees. In order to cut cost we need to lay off the part-time secretary. One of the secretaries from the other branch can take over her duties.”
Nearly infuriated, Steve shot back, “We can’t lay her off! She is like family. What will she do now?” Steve understood the situation, but he was starting to feel a lot of animosity towards Bob.
Unfortunately, things at the branch went from bad to worse. The poor economy had all but halted any new work from coming through the door. Likewise, the company was losing a few of their valued customers from the overpriced labor charges. Steve reluctantly reduced some of the hours among the employees, but he had not completely done away with all of his questionable managerial practices. Things came to a head when Bob informed Steve that the company was losing too much money. He had to lay off a particular employee that was underperforming. This employee was brought on by Steve himself, and happened to be his roommate.
For Steve this was the final straw. He did not want to see another employee let go. Steve knew that there was no one else in the branch that could take over as the manager. He also knew that his knowledge of the branch and its customers was extremely valuable. His rapport with certain high-dollar customers was understood and Bob knew it would be tough to replace someone like Steve.
Steve called Bob into the office for a meeting. Putting all his chips on the table, he looked Bob in the eyes and said, “If he goes, I go.”
Bob had no choice but to call his bluff. Steve and the company parted ways. The company eventually moved on and made it back to pre-recession volume.
About a year later the secratary answered a call. “Michelle? Hi, this is Steve. How are things going at the shop? Are you guys looking for extra help?”