Here let me read it to you. Best to listen straight off Spotify though, the browser version is buggy.

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Building a grandiose cash bonfire

If you have a job, some tips on how to not get fired if new owners come in. More on that shortly but first some background.

Last week’s I wrote of people who want you to work for free. It hit a nerve, with about three times the usual readership.

As if to prove the point, next day we got a web inquiry from a customer suggesting we might like to stage their large conference. If not for free, at least for way below cost. A rough budget for this sort of event starts at $50K.

At the end came the perky request “So can you put me in touch with your partnerships team?”

Partnerships team.

It’s quite the request that we should we do free work in return for exposure to people who aren’t potential customers. But also the assumption we employ multiple people whose job is to give our services away.

Like we’re a major telco or a global car brand. Obviously we have no partnership team or person and never will. Yet you see modest-sized businesses trying that sort of grand overstaffing. 

Because they think it looks prestigious. Another row of boxes in the org chart to show off in tender documents.

Business owners: think hard before you create this sort of cash bonfire. Middle management bloat is where your margins go to die. It’s so easy to do, as a response to whatever this week’s crisis is. 

How the bloat begins

Our businesses have grown a lot in the last 18 months, and some of our old systems aren’t enough now. We’ve hired lots of new people, and set up a trainee program for frontline staff. It’s exhilarating, because that growth means careers can evolve across the business.

It also means new operational problems to solve. And we get lots of suggestions to hire people to solve specific issues. It’s a reasonable idea, then you realise solving the problem only needs 15 hours per week. You end up with someone who has to fill another 23 hours with activity.

Can they come up with plausible-looking stuff to occupy the extra time? You bet they can.

Does your business need it? Not really. It’s the first step towards the staff bloat that flips the switch from profitable to break-even or worse.

Featherbedding, vested interests and stupid made-up jobs

I had a few drinks on the weekend with a friend who has worked for ages at a listed company now taken over by private equity owners. I asked him what they thought they were going to get out of it. 

He said: basically better margins.

Because in the last decade they’ve allowed head office staff to multiply with busy-looking jobs that don’t contribute to the financial performance of the business.

The people in the stores do solid work and the gross margins are handsome. Then large chunks of that cash evaporate when it reaches head office.

They have Chief Stuff I’ve Never Heard Of Officers. The empire building is chronic. Senior people get hired to do a single support role. Their first task is a PowerPoint pitch for a bigger team, because they’re “understaffed”. So they get more people, including managers reporting to them. It looks better on a CV and delivers much higher salaries all round.

Their annual reports groan under the weight of vision and mission blather, all platitudes that provide no useful guidance to their staff.

I’ve written elsewhere about my experiences with creepy private equity owners destroying the soul of businesses. But this is a situation where they are performing a valuable cleanup job, like the essential role of sharks in the ocean ecosystem.

I do wonder if all larger businesses would be better if they went through that new-owner reset every ten years. To clean out all the featherbedding, vested interests and stupid made-up jobs.

Be ready when the sharks come circling

If you have a job, ask yourself: can I clearly explain how what I do contributes to the bottom line of the business? 

Because if you can’t, you probably haven’t given it much thought. Would the business be any worse off financially if your job evaporated? If you’re not 100% convinced, nobody else will be.

When the sharks come circling, it’ll be too late. 

You’ll be justifying what you do in words that sound like a hobby, not a job.

You: “I curate digital experiences for a diverse community of stakeholders.”

New CFO: “HR will be in touch this afternoon.”

Some people feel that their job is not directly related to numbers, so the bottom line is not their problem. 

It will be their problem.

When I used to make ads, I never tried to tell clients that doing a great ad was a worthy goal in itself, because they really gave no fucks about that. That campaign is for increasing their prices and margins way higher than their generic competitors. Not doing it will cost them a lot of money. That ad campaign isn’t a precious work of art, it’s a future profit machine.

It didn’t change the work I produced, but it really helped persuade clients to pay for it.

No matter how right-brained or niche your job, thinking about your contribution to present or future profit will sharpen your performance and take your career to higher places. 

You can still bring your passion for sustainability, office design, network protocols or whatever floats your boat, but higher-performing people understand the larger context they work in. 

Mass staff whackings are getting more popular

The tech world is waking up to this bloat syndrome, after years of talent hiring wars. Elon Musk inspired them by taking the machete to Twitter, going from 7500 to 1800 staff. 

Yes, as a long-term Twitter user I can confirm it is cooked, but it still works fine technically. Now every tech CEO in that field is discovering the stock price boost of whacking a quick 10,000 staff or so.

We’re moving into times where that might spread into the broader economy. So best be prepared with a compelling, profit-based case for why you’re indispensable.

And if you own a business, realise you don’t need all that middle management. 

Our business remains an ongoing experiment to prove you can have a national business without a head office, HR department, or any of the other margin vampires that drain the life from your P&L. It’s great, try it. If you want more detail read the book.

You could ask our partnership team for a free copy. We have a special email folder waiting for your request.

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