This week, I found a couple of articles that I had considered for separate posts.  Upon reflection, I think there’s a unifying theme for both of them.  They’re about major companies doing idiotic and self-destructive things.

I don’t mean the usual types of stupid hijinks such as appointing diversity officers or anything like that.  I mean they’re taking actions that threaten to ruin their brands, corporate cultures, and possibly their businesses.

First, IBM has decided to stop allowing its employees to work from home because, well, nobody seems to know for sure.

You’d think that IBM’s executives would realize that the company’s unparalleled record of financial growth and innovation might somehow be connected with the fact that, at last count, about 40 percent of its employees work from home.

But you’d think wrong.

IBM management has decided to kill the goose that’s laid decades-worth of golden eggs by forcing its workers to report to regional facilities. Employees who don’t comply will be fired.

The majority of employees have complied, but I think that’s only because IBM has bought out so many companies, there’s nowhere much better for many of them to go.  Still, if you’ve ever had the opportunity to work from home, you know the enormous benefits that come from no longer having to commute or arrange child care.  Were I a talented software engineer, I’d tell IBM to get fucked.  I agree with the author that this is a profile in failure in the making.

Next up is Starbucks.  They treat their employees like crap, this is known.  But it appears that they’ve adopted a “beatings will continue until morale improves” mantra.

But the employee left the meeting infuriated, feeling that Starbucks was forcing baristas to take responsibility for customer-service problems caused by other issues like understaffed stores, an increasing demand from mobile and drive-thru orders, and time-intensive drinks. In the meeting, he said, Starbucks essentially ordered employees to find a way to improve the customer experience — or quit the company.

“Everyone’s jaw dropped,” he said. “There was a point where they said if you’re not down with this, you’re welcome to get out.”

Now, it goes without saying that an IBM engineer is a helluva lot more valued by the workforce than a barista, but this is shake-my-head crazy.  I like Starbucks coffee just fine, but I rarely go there.  One reason is the pretentiousness, sure, but it’s also because it’s always an agonizing wait every time I go.  If I can’t go in and leave within five minutes with a simple large cup of black coffee, it’s unacceptable.

See, I only drink black coffee.  So those of you with your fancy frappucinos are usually an obstacle to my inner joy.  Ah, but now I see that it’s not your fault.  Starbucks has apparently deliberately been causing slow service because, well again, I have no idea.  Then they lay the blame on the hassled employees at the bottom of the chain.  That’s just ignorant.

I don’t understand modern corporate culture anymore.  When they take actions that clearly will, no matter how evil or bizarre they may seem, boost profits; I get it.  I don’t see where either of these cases will do so though.

Providing office space for formerly remote employees costs money in IBM’s situation.  This certainly won’t increase productivity and is more likely to reduce it.

Starbucks would seem to be increasing profits by paying their employees shit wages and understaffing locations, but nobody is going to keep going there if the mobile and drive thru orders are causing such delays that a capuccino takes half an hour to purchase, are they?

Yeah, I just don’t get it.  Even the diversity stuff and other virtue signalling that most corporations do these days is okay with me.  I get why they do it even if I think it’s retarded and condescending.  Major and probably disastrous decisions like those being made by IBM and Starbucks just confuse me.  I guess I’d be annoyed if I were a stockholder or, worse, an employee.

10 comments

  1. My office is more than 60 miles from home, so I greatly appreciate the arrangement where I normally work from home two days out of the week. It gives me necessary time to focus, I’m more relaxed and productive, and it helps stress and health overall, all of which are beneficial to both me and my employer. With videoconferencing and broadband, I barely skip a beat. It’s not something I could do every day of the week–there are important benefits to consistent face time–but it’s a very reasonable balance. When I had originally approached my boss about such an arrangement, he was enthusiastically supportive, saying “we wouldn’t want to lose you”.

    We also have a lot of remote site and home office employees spread throughout the U.S. These folks are accountable and accessible, closer to the customer, and there is a huge overhead savings not needing to host them in expensive DC-area office space.

    Companies are shooting themselves in the foot from a productivity and cost standpoint, and risk losing performers if they can’t accommodate telecommuting. Of course, the job has to be compatible with it.

  2. Most of my team members are on the East Coast. My employer saves a buttload of money by letting me work from home instead of relocating me and paying me a higher salary to make up for cost of living. I’ve mentioned before that I could make a higher salary than I do now working somewhere else, but there’s no monetary amount I can place on maximizing the time I get with my kids. I wouldn’t want to change it.

    I’m baffled as to what IBM is trying to accomplish.

  3. Often times these large corporations use tactics such as this as a way to lay people off without calling it a “workforce reduction.” It’s basically letting people go via this tactic without the hassle of firing them or the negative press of “LAYOFFS AT IBM!!!1!.”

    I haven’t worked in an office in years. My career has been fantastic. I will not take a role where I have to be in the office on a regular basis. I purposely outline that requirement to headhunters that call me every day. Some roles may need to be in the office more due to the nature of their work, but that is why I don’t take those roles.

    My value is the knowledge I have in my head, the ability to speak to large and small audiences and keep them entertained and drive large deals along with driving product direction. None of that requires my butt in a chair in a cubicle (I am posting this from a nice comfy spot looking at my kids playing on our farm).

  4. This might be the case for ibm but I doubt it has much to do with Starbucks. When I first read the ibm dynamic in the post I certainly got that sense. “Bringing people together” and “multi-discipline leveraging” are company speak for layoffs. Once these employees are back in ibm will probably have them explain their roles and decide if they should be kept.

    The Starbucks one is just bargain basement squeezing the bottom line if you ask me. I bet the company measures their cost in employees on a very flat rate (meaning no one barista is worth more than another). Cutting staff is their way of saying to do more with less, which will make them more money in each chain without easing operating costs. They clearly feel that if the employees don’t like the situation there’s plenty more lined up to fill the ranks.

    There’s probably a number of causes outside of delivering bigger profits but even as a layman if I looked at the landscape of coffee shops and boutique fast food I’d wager that this is a tacit way of Starbucks reacting to a more competitive landscape. There’s a lot more players in chain coffee, and even fast food chains like McDonald’s offer coffee options that are pretty competitive.

    In my experience once a company has decided it is losing money and comes to the conclusion that they can cost cut their way out of it, it’s probably just a matter of time before they sink into irrelevance. Reducing the bottom line is a bandaid on a biller wound of the real problem: they’ve stopped innovating.

  5. Yep, you can only cut so much. Increasing sales/margins is the only way to sustained growth. Maybe they could figure out how to make a coffee cup that doesn’t cost $30?

  6. That’s true about Starbucks – I was only focusing on IBM.

    You’re other conclusion about cost cutting to resolve revenue issues – I’ve been in 1 or 2 companies that were hyper aggressive. Once we saw revenue fall we didn’t cut back on travel for sales etc – we INCREASED that budget and expected our sales teams to rise to the occasion. They did – and we excelled. On the other hand I have been at many companies who try to save their way out of bad markets or business plans – never works. It’s only delaying the inevitable. Either they are too weak to really lead and therefore are destined to fail or the market has changed and they can’t adapt. Either way, it’s a leadership failure and cost cutting never raises the top revenue line.

  7. It certainly sounds like a cost-cutting measure to get workers to quit without firing them. Starbucks workers generally get what they deserve if the company wants to blame them for its snobby clientele.

  8. That is the sign of a bold company move, and an executive that was willing to roll the dice on the profit margin. It sounds like a good plan to me, to increase exposure to potentially new markets and incentivize sales (who are probably going to want a commission more than a raise). Good leadership.

    I think with Starbucks they are holding on until they can change the business model. I’m not looking at their spreadsheets but if we think about where their costs are it is a pretty good bet they see the future in less brick and mortar locations and an expanding reach with delivery/drive thru. Most of the locations I’ve seen are probably lease based and in high foot traffic areas.

    If you look at the news, malls are closing and Americans have fallen out of love with destination shopping, and in love with click sales/delivery. So, with that in mind what I might do as an executive is honor the lease terms I was in so my credit worthiness stays good and simply look to be out of the leases for as little cost as possible.

    If a particular location makes money, great. If it loses, that’s to be expected because the greater trend is less people are out shopping for entertainment. That would only leave delivery, and what KIND of brick and mortar remains. They’re obviously trying to expand digital sales and I have no doubt future baristas will be delivery people.

    The only other kind of shopper they care about are people like thrill, who get Starbucks on the way to an essential destination but don’t see the wait time as waiting for a special craft brew. There’s two new Starbucks locations in my area and there’s two unique details about them: 1.) Starbucks built them, which means they’ve invested in the layout, the land and probably a longer term lease (if not ownership). 2.) they’re drive thru locations on busy intersections of very noteworthy commuter routes.

    Fear not thrill, Starbucks heard your concern and they’re changing. 😉

  9. I work for IBM (from home primarily, in a role not likely to be required to go to an office since I travel a lot), and just to show you how massive this company is – I didn’t even hear about this until I read it in an article last week, while many employees apparently got notice in February that this was coming.

    If they did change the policy, and make me go to an office when I wasn’t traveling…I guess I’d do it. Yeah, it would suck to go back to an office, but I could always “travel” more since my boss is in New York, whereas I’m out west. I’ve only ever met the guy once, so it’s not like he would be looking over my shoulder, even if I were in an office.

    As to the reasoning, it’s pretty strange. But then 20 quarters in a row of declining revenue can make management do some really stupid things.

  10. I’d agree with this sentiment normally, but IBM has had at least three RIF’s in the last two years since I started working there, so they’re not afraid of that headline as much as one would think. They just announced the 20th quarter in a row of declining revenue, so I think management is in panic mode, and they are doing anything to look different for the shareholders…even if it’s a stupid idea.

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