Fred owns a manufacturing company; he’s also semi-retired. Or at least he was.

  For years he relied on Curt, his General Manager to run his company. Now Curt wants to retire at the end of the year so Fred is spending more time at the company familiarizing himself with the day-to-day operations. He doesn’t like what he’s learning.

Fred’s management style was arm’s length at best. As long as the Curt was keeping the company profitable and staying within budget, Fred assumed things were fine and he didn’t interfere. Big mistake.

Here are just a few of his discoveries:

• His company has a staff of eight engineers; six have left the company in the past two years.
• In the past six months two administrative employees have been fired “for cause”. Curt acknowledges that at least one might be filing a claim with the EEOC – but he says it’s “nothing to worry about”.
• The cost of scrap and rework in the past year has tripled. Curt told Fred that the production employees are “leased” through an agency and it’s been hard to find skilled people. Turnover has also been high in this area.
• Work flow processes that Fred developed for the office and the shop are almost non-existent, training only happens when someone gets hurt on the job and any control over who writes and signs checks is long gone. The bookkeeper does it all.Fred said good-by to his semi-retirement status. He knew he needed to take back control of his company.

First, he consulted with his attorney and decided to accelerate Curt’s retirement. He’s gone Friday.

He scheduled an appointment with the company who supplies leased employees to go over the contract and training requirements. Fred also discovered that Curt was leasing engineers through this company, a practice which will be discontinued as soon as possible.

Fred’s accountant suggested all future checks require two signatures and documentation must accompany the checks to be signed.

The work-flow processes have not been located, but Fred is hopeful he will find it in the chaos that Curt called his office.

Once upon a time Fred thought that he would sell the company when Curt retired. He’s kissed that notion good-bye. It will take two or three years to rebuild his business.

Fred knows that he is mostly to blame for his company’s situation. He didn’t look beyond the numbers. He trusted too much. He didn’t communicate often enough with Curt. The list goes on.

One thing Fred is sure of – the next time he retires it will be 100%. It’s no fun going from a 10-hour-a-month schedule to working 60 hours a week.

What did you think of this article? Please share your comments with me.

“You pay peanuts, you get monkeys.”
  ~Steve Arnesen