After reading the news today and seeing one of the latest salvos from Pres. Obama’s campaign1 (Romneyeconomics.com, watch some of the videos, they are pretty striking) I finally achieved an understanding of Mitt Romney and what he is proposing for the country. Let me explain…..
Fifteen years ago, when I first started working in IT, I went to work for a small software start-up company. There was a small group of investors who hired a former attorney as CEO. The thing about this CEO was that in his former career, he had bought companies (usually through a hostile take over), then he would break up the company and sell the parts. He would essentially squeeze as much money out of it as possible and destroy it in the process. He became wealthy and influential in such endeavors. At the time, I remember thinking that it reminded me of a “chop shop”. That’s an illegal venture that steals cars and breaks them down into their various parts for sale because they can make more money with the car’s parts than the car as a whole.
Nowadays we call this “vulture capitalism”, but to me, 15 years ago, it was “chop shop capitalism”. Same difference. Now here’s why this is important. This CEO was very good at destroying companies, but he was hired to build something. In running our small company of eight people, he was hired to take a unique hardware setup and specialized software for a huge niche market and grow that into a profitable venture. That niche had some competition but there was no one with true market dominance nationally or regionally. So it was, in essence, an open playing field.
I began working for this software company coming from a background within the customer base of that niche market. I believed in this small software company and the product that they offered to my former profession. I honestly felt it had the potential to be phenomenally successful and help my former profession to provide its services more efficiently and effectively. I wanted to be a part of that, not only for the profit but for the benefit to society. I worked harder than I have worked before or since.
Over time, I began to worry about the way the company was being run. It seemed as if there was no real plan for growth. It was all too haphazard and far too much pandering to investors. It seemed as if there was no real business strategy for penetrating the market. We were, what I called, “squirrel chasing”. I don’t know if you have heard that expression, or if other people actually use it in business, but it basically means that if a customer asked for something customized, no matter how ridiculous, impossible, immoral, stupid, or outside the scope of what our application was meant to do, the CEO would tell them “yes”. And the programming team would have to deliver it and the customer support team would have to support that customization. I was a member of both teams.
Unfortunately, we never had the chance to nail down the core functionality of what the market needed so we were always pandering to a specific client instead of developing for a vital process in a vital industry. In other words, this CEO had no idea what he was doing in regards to producing a product for a particular market. He had no idea how to create long-lasting, mutually beneficial sales relationships and no concept of how to listen to the experts in the market (of which, I was supposed to be one, that’s one of the main things I was hired for, my expertise in that field).
I left the company after three years because I knew he was running it into the ground. And, ultimately, I was right. In less than a year after I left, the CEO moved the offices from rented corporate office suite to a tiny strip mall unit. He went to the investors and said, “we can’t make a go of it, our only option is to buy out the competition”. These individuals were wealthy but not crazy wealthy…not on a level of Buffet, Gates or Jobs. They were also disinterested in the detailed management of the company. They were in for millions and could not afford to walk away (whereas a Buffet, Gates or Jobs would have walked away or gotten a new CEO and started over). They simply wanted to make a profit.
The CEO used this time to punish enemies within the company (which had shrunk with my leaving). Those “enemies” were pushed out and the remaining investors dug ever deeper and eventually bought out the competition. In the end, the company, even though it acquired the competition, employed fewer and fewer people. I’m not entirely sure they ever made a profit. Their intent was to use already existing people, infrastructure and accounts. And in doing so, the CEO built nothing and, one could successfully argue, missed out on a much greater opportunity along the way.
It wasn’t until today that I realized how much Mitt Romney reminds me of that CEO. He’s all about telling people what they want to hear, regardless of the practicality or even the morality of what they want. He only wants their vote–to close the deal, to make the sale just like the CEO only wanted a deal. He’s the investor who wants his money back. And he doesn’t care what he has to do or who he has to hurt in the process to get it back. He doesn’t care that fewer people might be employed, that the customer might not be getting the best product or service, and that, overall, he has added nothing to the country.
Essentially what Romney doesn’t and the CEO didn’t care about was their long-term business relationships, nor what their actions would do to their employees or their customers 2. It wasn’t about building anything long-lasting and profitable, but about getting as much profit as quickly as possible and then pulling out. The original software and hardware setup was canned and they simply absorbed the existing competitors’ accounts and applications. They made nothing new, they added nothing to the economy and they paid back their investors, maybe. Where were the new jobs? The innovation? The future? Nowhere to be found.
That shortsightedness is the difference between President Obama and Mitt Romney. The President has passed many bills (e.g., Health Care Reform) that will help to develop this nation over the long-term and invest in its future with an understanding that there may not be big profits available right away and that there is much work to do. However, sometimes you have to spend money to make money and that is what is behind so many of the recent reforms advocated by Pres. Obama. If we don’t find a way to stop rising health care costs, then it won’t matter what we do economically. And long-term, reform was what was needed (and still more reform is needed in future).
On the other hand, Romney wants to plan for short-term profits, as little work as possible, and to ignore the possibility for long-term growth. Unfortunately, many Americans are of like mind. We are impatient, as to be expected with such a young nation. However, if we don’t start thinking long-term, we will end up as morally bankrupt and as useless as the software start-up company and that “chop shop” CEO for whom I once worked.
1. BTW, what’s up with Fox News, the home of biased reporting, re-posting a Reuter’s story written by Patricia Zengerle? See what I mean here. The point being, does journalism now mean being a stenographer and not a fact checker? I tried to research Patricia Zengerle but couldn’t find exactly WHO she worked for in the various places listed in her online profile at Reuters. Should a White House Correspondent’s work history be public knowledge now? I mean, I want to know what their influences have been and what biases they could potentially have and one way to know that is to know who they have worked for. What do you think? I only know that I don’t trust anything out of the mouths of any journalist on the national scene unless it can be independently corroborated.
2. Getting a customer’s money is NOT the same as getting their long-term business. One is “closing the sale”, aka, the famous Alec Baldwin scene in Glengarry Glen Ross where “Coffee is for Closers” VERSUS the trusted relationship that lasts because you deliver the best product and service for the best price. You know, the proper way to do business and build success as opposed to the “I’ve got mine and fuck em” mentality that “vulture capitalism” exemplifies.