Mon, Jul 06, 2009

Business

The Corporate Curmudgeon

Dale Dauten: How a little flap brought down a village's economy

The Corporate Curmudgeon by Dale Dauten
Tucson, Arizona | Published: 12.02.2008
"Death should not be seen as the end, but as a very effective way to cut down expenses." — Woody Allen
Once upon a time, there was a blithe and prosperous village. Then one day a butterfly flapped its wings.
When that butterfly flapped its wings, the owner of the local hardware store was sitting across from the town's banker. He saw the butterfly out of the corner of his eye and looked over to admire it. The banker noticed that the store owner was not just looking away, but looking up and left, avoiding eye contact.
Having once taken a seminar on body language, this made him nervous — wasn't that a sign of deception? After all, this particular store owner was doing too well — too many people were building too many buildings, too many people had been getting rich too fast, and it made him nervous — this could not last. The banker spoke of bubbles and told the owner of the hardware store that he was worried.
The store owner wasn't surprised — after all, the good times had to end sometime, and if truth be told, he'd like to take some time off and make up any lost revenue by cutting back on expenses, maybe letting one of his employees go. He said as much to the banker and left.
Later that afternoon, the town banker told the owner of the local dairy that not only was he worried about the economy, but the owner of the hardware store was laying off workers.
The dairy farmer had been expecting this day — after all, the good times couldn't last forever — and he was ready with his own contingency plan. He would get ahead of the downturn by selling some of his herd and getting rid of the kid he hired as a favor to the preacher.
So the dairy farmer sold some of his cows, and he called the grain company and reduced his standard order for feed. This was very bad news for the woman who ran the grain company. She decided she would put off the improvements she was about to start. So she called the local contractor and said she wouldn't be modernizing after all.
Later that day, the contractor visited the hardware store and told the owner that he had one fewer project. When the store owner asked what had gone wrong, the contractor told him that the grain company was cutting back because the dairy was cutting back because the town was doing too well.
This was exactly what the banker had predicted, the hardware store owner thought — the downturn had come. Instead of firing one employee, he decided to fire three, telling himself that it was better to be safe.
And the next time he visited the banker, he didn't notice any butterflies outside the window, because the banker had just told him he was canceling his line of credit. After all, the banker explained, he had to be safe.
And so it went: Each business got safer and safer, until they were all in danger.
There was, however, one old farmer who had a different contingency plan. While all the other townspeople saved so much money that they went out of business, he bought cheap land and equipment, and his operations thrived. And that's how it came to pass that the former owner of the hardware store went to work for the old farmer.
One day he asked his new boss how come he'd done so well in a bad economy. The old farmer said: "My father lived through the Great Depression, and he used to say, 'Fear is the greatest expense of all.' He taught me to welcome the bad times as the start of good times."
The old farmer smiled and said, "It's a good time for a bad time." And the former store owner knew he was working for the right boss.
The moral of the story: There is no safety in the herd that is running toward the cliff.
● Dale Dauten is the founder of The Innovators' Lab. Write to him in care of King Features Syndicate, 300 W. 57th St., 15th Floor, New York, NY 10019, or at dale@dauten.com.