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A gusher of profits around the corner

Stephen Gowans

stanley is like a lot of people. He might be like you. Quiet, kind, hard working, smart. People in charge like him. He does what he's asked, without complaint.

Stanley went to university, studied engineering, and got a job with a big company. He was content to work hard, not to spend his time playing politics and managing impressions. His supervisors liked him. He wasn't like a lot of people who need to scramble to the top of the heap in search of power, prestige, perks, and money. His supervisors liked him even more for that.

Stanley quickly grew comfortable with his employer, and his employer with him. "He's no high-flyer," his bosses would say, "but he's steady, reliable. A real asset, if a little dull. But hey, what's wrong with dull?"

For 26 years, Stanley showed up at the office, everyday, on time, and left everyday, after putting in his mandated eight hours, and more, when the occasion called for it. You wouldn't catch him hanging out in the cafeteria, gossiping with his coworkers. Stanley didn't gossip. You wouldn't catch him putting on airs. He didn't have any. You wouldn't catch him shamelessly toadying. He hadn't a clue how to do it, and wouldn't if he knew. Not like a lot of his co-workers. But you could catch him laboring diligently at his desk, doing whatever it was he did.

No one ever really knew what Stanley did. Well, not the specifics, anyway.

You might think I'm going to say that Stanley didn't do anything, and that's the point of the story. Hard working, steady, dependable, Stanley beavered away for 26 years...on crossword puzzles. A moral on not judging a book by its cover. People who look like they're working hard, might just be drones in a catatonic stupor, frittering away their employer's money. Except, that's not how this story goes.

In fact, Stanley did a lot of work. And useful work, too. But what Stanley did, as unnoticed as it was, wasn't going to get anyone a promotion, or recognition, so no one paid attention to it. Except Stanley, of course.

In every company there are jobs that, no matter how brilliantly done, won't merit much attention, and definitely offer no glory. Not one iota. They aren't stepping-stones to more money or more power or a corner office and a fawning staff that calls you Mr. or Ms.

It's like trash collecting. There are no rewards for trash collecting. There are no Top 50 Trash Collectors Under 40 (none that are recognized anyway.) No conventions, where trash collectors meet every year, in some luxury hotel, to honor the trash collectors elite. You won't work your way to the top of a waste management firm because you work harder at collecting trash than anyone else. You can be the Picasso of trash collecting, and all you'll get is whatever glory your paycheck delivers. None, in other words.

Stanley was the paper-pushing equivalent of a trash collector. Ambitious people avoided his job as if it were some kind of voodoo curse, which it was, in a way. But it was one of those jobs that, like garbage collection, had to be done, but which nobody ever notices.... until it stops.

And one day, Stanley stopped collecting the trash. Then people noticed.

Now, the odd thing about this story is that Stanley didn't decide to stop collecting trash. On the contrary. He was perfectly content to go on laboring until retirement (and longer if asked), clearing away trash, as unnoticed and anonymous and unappreciated as the guys who take the trash away from your home every week. Going on strike and making life uncomfortable for others wasn't Stanley's style. He'd never do anything like that. No one would ever accuse him of having attitude, or being a threat, or militant. Only people with attitude go on strike. But Stanley stopped collecting trash all the same. He had to. His bosses told him to stop. He wouldn't be needed anymore.

Ultimately, it was the shareholders of Stanley's company who made Stanley stop taking out the trash. Shareholders are dumb. The market is dumb. That's why there are stock market crashes, and bubbles, and Nortel shares that nose-dive. That's why Stanley stopped collected trash.

Now, it's not that the shareholders told Stanley to stop, not directly anyway. A boss told Stanley to stop, who was told by another boss, who was told by still another, who, at the end of this long chain of command, was told by someone called an executive, who decided, not that Stanley had to go, but that a whole lot of people had to go, and he didn't care which, just as long as a few thousand were yanked off the payroll. Stanley was one of a few thousand.

Executives run companies on behalf of shareholders. That's the official story, anyway. Another story, much closer to the truth, is that executives are cynical, manipulative, sly, sociopathic, predatory and razor-sharp creatures who know shareholders are as dumb as the herd animals they are and use that to their advantage.

Shareholders believe that every large organization carries around a spare tire of fat that clogs up the flow of profits to their pocket books. No matter how austere a diet the organization is ordered to go on, no matter how long it's been starved, there's always more fat to be pared from the bone. And not small amounts. But great hunks that can be ripped from sinew -- humanely, of course. Everyone believes it, which is why everyone believes it. Bill next door believes it, so Carl at work believes it, and because Carl believes it, Caitlin believes it, and Caitlin's mother believes it because Caitlin believes it, and because, well, everybody believes it, so if everybody believes it, it must be true. So when an executive says he or she is downsizing, (to hack away at unhealthy fat of course), shareholders applaud, and eagerly await a gusher of profits, and nod sagely, and say, "That was the right thing to do. Ask anyone."

The executive in charge of Stanley's company was typical of his breed. Ruthless, vulpine, driven. These less than sterling qualities, condemned from church pulpits (sometimes), but revered in the pages of the business press, paved the way for John to become the new executive in charge of Stanley's company. Wanting to leave his mark and knowing shareholders prejudices well, John immediately ordered a staff reduction of 20 percent.

John had worked for Bill, a titan of Canadian industry, who had risen to fame by taking over a former Crown-corporation and immediately cutting 20 percent of the staff. John aspired to be a Titan too, and seeing that Bill's rise to Titan-hood rested on playing to shareholders' prejudice that deep cuts were good for profits, John did what Bill did. Bill and John called this the 20 percent rule. Whenever you take over a firm, cut the staff by 20 percent.

To anyone who doesn't interpret the world through the clichés liberally sprinkled throughout the pages of the Report on Business and Wall Street Journal, bibles to millions of investors whose income tax return assessments come back every year with the notice, You have capital losses from previous years, the 20 percent rule is dumb. Imagine a doctor who tells all of his or her patients, no matter how thin or fat, no matter how vigorous or feeble, that they need to loose 20 percent of their weight, right away. Non-investors would guffaw. "That's dumb." Investors though, stroke their chins, and pronounce in the authoritative manner investors do, "Smart. Very smart."

Of course, John's 20 percent cut was as dumb as his mentor Bill's, and John knew that, but heck, he was playing to the investors. All he had to do was disguise the telltale signs of how dumb the cut really was, and that wasn't going to be all that difficult.

When the order came down to untether 20 percent of employees, Stanley's boss, a man who fancied himself humane, immediately singled out Stanley. "Well, Stanley's older," he reasoned, "and therefore is eligible for a reduced pension. He's a natural to go."

So, Stanley was summoned to a meeting, and told, "You have to the end of the month." It was the first time Stanley ever looked bitter.

Some of the lowest paid people at Stanley's company (and therefore according to the received wisdom also the stupidest) immediately recognized that letting Stanley go wasn't such a good idea. "Who's going to do Stanley's work?" they asked reasonably. "He's the only person who knows how to do it, and no provisions have been made to train anyone else, and his job, unglamorous as it is, must be done."

"Thank-you for your input," came the unguent reply from those who made much more money, and therefore, according to the received wisdom, are much smarter. And mental notes were made to log the names of those who so helpfully offered input into the book of employees who haven't yet mastered the political art of knowing when to shut up.

Of course, the prophecy of the low-paid Cassandras came true, as the prophesies of Cassandras always do, and no sooner had Stanley been ushered out the door, then the trash started to back up.

"Gosh, we'll have to do something about that," said the managers.

"Didn't we tell you so," replied the Cassandras, shaking their heads in disgust, and rolling their eyes.

With trash, and "I told you so's" rapidly piling up around their ears, the managers, always ready to grasp the nettle and make a decision, made a decision. They called a meeting. And after they called a meeting, they called another, and then another, and then still another, and finally after much debate and deliberation they arrived at a solution. "We need to train someone to do what Stanley was doing."

"But no one knows how to do Stanley's job," came the reply.

So the managers called another meeting. "What's to be done?" they wondered.

Stanley's company, like a lot of companies, had been through downsizings before. And what almost always happened, was that a lot of people who were put out to pasture, barely had time to munch on a few patches of clover, before they were hired back, on contract. "Gosh, we can't get along without you," they were told.

This was good for the would-be retirees. They got their retirement pay, plus their old salary. A hefty rise in pay, all because the company had to downsize, because you know, the company was spending too much on salaries. This made the 20 percent rule look stupid. Muscle was being hacked away, and companies were laying out additional funds to regenerate the muscle they'd stupidly hacked away in the first place. Hacking away at fat could get you lionized in Business Week, but setting out to reduce costs, and having the plan backfire in your face when you ended up slicing into sinew, could get you the boot. So executives came up with a plan. They'd prohibit retirees from being hired back on contract, as a condition of receiving early retirement, which, when you think about it, is tantamount to prohibiting a company from regenerating muscle after the muscle has been hacked away and left lying on the abattoir floor. If you take no steps to correct a mistake, maybe no one will notice you made a mistake in the first place. Rule #1 in the executive's book of rules.

But as plans go, this one was about as good as mouse-proofing your house by filling holes in the outside walls with cheese. It would only be a matter of time before the barrier was breached, and in the meantime, the cheese would have attracted all of the neighborhood mice, making the problem much worse.

The managers at Stanley's company figured out that if they couldn't hire Stanley back directly, they could hire a firm that, just happened, somehow, to have hired a now loose-at-ends Stanley. And who could blame that firm, if it happened to think that Stanley was just the guy to do the work that Stanley's old firm was asking it to do, to wit, Stanley's old job?

So, in short order, Stanley was hired by a company we'll call Base Ten, that was then hired by Stanley's old company to provide consulting services in connection with the work Stanley used to do. Stanley's bitterness quickly evaporated as two paychecks regularly made their way into his bank account: a retirement check from his old company, and a paycheck from his new company, that, of course, was simply money transferred from his old company through his new company for doing the work he used to do. Stanley was overjoyed. And so too was Base Ten. They were turning a profit, and all they had to do was collect money from Stanley's old company, take some off the top, and give the rest to Stanley. Stanley's old manager was happy, because he'd made the cuts he was asked to make, and the trash was still being taken out. John was happy, because shareholders thought of him as a tough executive, willing to take hard decisions to promote the interests of shareholders. And shareholders were happy, too, because they thought they were better off. After all, 20 percent of the staff had been cut. A gusher of profits was right around the corner, right?

Steve Gowans calls himself a radical, but others just call him contrary and a pain-in-the-ass. He can be reached at

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