Business Lessons Learned

I was working for an Internet company when the "tech bubble" of the late 1990s burst in 2000. The company conducted manager meetings around the same table the founding partners used as a desk during the day and, all too often, as something to sleep on during the night when the demands of running a start up called for an all-nighter.

At the end of one of the meetings the CEO announced that the company, Invision.com, would be getting new conference room furniture. "It's really nice stuff, too," he said. "One of the companies that owes us money is going out of business. The best they can do in terms of paying us is to give us their conference room furniture. Of course, if they hadn't wasted so much money on fancy conference room furniture they might still be in business."

Based on what I read in the newspapers of late, I have to wonder if that business lesson has been forgotten or was never learned by the men and women running some of America's biggest corporations. As I watch companies everybody thought would be around forever fade from the corporate landscape, I become more convinced that the bigger the company is, the more likely it is that it succeeds despite itself.

Take General Motors, for instance. How does a company with so many resources at its disposal find itself in a situation where it can't last much longer without government assistance?

What's truly amazing, however, is the talk we hear of how the "Wall Street bonuses" won't be as large this year, and also about how the executives who ran AIG, Lehman Brothers and Merrill Lynch are entitled to billions of dollars in exit fees. Excuse me for sounding naive, but shouldn't bonuses and exit fees be tied to performance? How can anyone involved in creating the mess we find ourselves in today even THINK about taking an extra dime?

Those business people who take risks and succeed are entitled to whatever it is they can get, legally. It's the rewarding of failure, incompetence and quite possibly criminal behavior, however, that best explains how we find ourselves on the precipice of economic doom today.