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| (Photo courtesy: Wordpress) |
Many won’t admit but they maybe either
working in a Zombie company or running one.
According to Wikipedia, "Zombie
company" is a media term for a company that needs constant bailouts in
order to operate, or an indebted company that is able to repay the interest on
its debts but not reduce its debts.
Here, I’m using the term Zombie Company slightly
differently from the Wikipedia’s definition. A Zombie literally means the
walking dead. In that figurative sense, a company is a Zombie company that has
nothing organic about it, but dead, zero growth.
Some of the obvious sign of a Zombie
company are that its on a decline, lesser profits each year, zero product
growth, mounting debts and severe staff attrition.
But, what about the subtle signs of a
Zombie Company in the making?
Here’s my take on the seven key signs that
should tell you that you are in a Zombie Company.
1. Company is stuck with a ‘Killer’ idea, but fails to see that the world doesn't care.
When a company backs a ‘killer’ product or
service which is ‘ahead of its time’ and declares that they are gutsy enough to
jump into a fray that no one else has done in that scale, then you either get a
dynamite of a product (or service) or you get stuck with a poor idea which the
world doesn't care about. Yes, its brave to have a fearless mindset to pursue
such a dream since such fearless companies have given some amazing products and
services (Apple, Napster, JustDial are few such examples that come to my mind
immediately). But year after year when the market conditions do not improve and
all your assets turn worthless including the investment in technology
procurement then it is a Zombie Company.
I’ve been associated with two startups that
had killer service and product to offer. However they failed to acknowledge
that the world wasn't ready for their product and yet they pumped in money to
make it work. The first startup had a fairly good run with its homegrown ‘killer’
online portal of group shopping concept for atleast 2 years before funds dried
up, and it ended up where all other dot coms ended when the dot com bubble
busted.
The other startup was promoting a ‘Killer’
product that would potentially change the way public utility services are run
in India especially the consumer segment.
However even after three years of operation and a mounting loss staring
at their faces, the promoters of the company continued to proclaim themselves
as the pioneers in the field. The startup rejected offer for consolidation as
it didn't want its technology to be ‘sabotaged’ by fellow bed partners. Other
competitor, a reputed MNC player who was in the fray, chose to shut down this
part of their business in the face of unsuitable government policy. While the
ground was still slipping from under its feet, the startup refused to give up
and kept pumping in money to fund its quest. Managements of such companies fail
their basic responsibility towards the shareholders. More often than not it is
too late before they fall prey to their ego and pride of admitting that their
‘killer’ product is a failure.
2. When ‘Change’ is a bad word.
Who doesn't appreciate change? If you are not surprised when I tell you that most
of the bosses do not want to change
the way things are done, then you have worked in a Zombie company, my dear
friend! I’ve had several run-ins as a young manager with my superiors, finding
it hard to convince them to view things differently or to even consider a simple
change. When there is no logical answer as to why a suggestion is being
rejected, then you know that it is time to move on.
3. I’m OK but you’re NOT OK.
The world is perfect when one adopts the
view that “Im OK, You’re OK”. When the life position changes to “I’m OK but you’re
not OK” then an egoistic state is reflected. In companies, such a life position
can be detrimental to its sustainability. When I was with a media company, my
editor turned down my idea of an article as he felt that my story was ‘too
abstract’. He constantly kept comparing his standard of writing with his
subordinates’ making us feel more and more unworthy. With a small team working
for this magazine, such an attitude didn't take the magazine too far.
4. “Its not our fault, its theirs.”
If I had a hair for every time I heard that,
then I would be a werewolf.
The internal conflicts in a company,
whether inter department or intra department, if not stemmed by the management,
can single handedly lead to the downfall of any company. It always amazes me
how easily the most obvious solutions are disregarded just because team battles
are ever so on. I recall the time when once a meeting was dominated by the
issue of a missing inventory and by the end of the meeting it looked like all
departments right from the Gate Security desk to the stores dept and the
quality dept, purchase dept., and even the receptionist, all were entangled in
the blame game. It is even worse when the conflicts extend to the top level of
Management. When the buck doesn't stop anywhere, it is time to either roll up
your sleeves and do something about it or…
5. “No Money”
One of the easiest telltale signs of a
zombie company is when you keep hearing, “Sorry no budget” when you ask for
simple requirements such as laptops. The burden of huge debt plaguing the
company leads to lesser or no increments, no investment in R&D, lesser
dividends to the shareholders, and almost no money to return to its investors. On of the media houses I worked at ignored the tell tale signs of an impending bankruptcy facing them while they kept pumping in funds for a new division, perhaps I should've read the signs early and saved five months of my time that I wasted there without salary!
6. “Why call an expert when
I know everything”
Those who run zombie companies refuse to
acknowledge that they need help. When it comes to hiring a consultant who can
advise on improving their administrative skills or ways to tighten resources or
even to refresh technological skills, top management of zombie companies turn
down such proposals saying, “I know better”. I have come across one such person
heading a company who felt he was an expert in almost every subject right from
finance, to legal, technology, business development and team building, Quality
norms such as ISO standardization, you name it! It is not uncommon that such units
also refuse to hear the negative reports about themselves. Whether it's a
feedback from customers about faulty products or insufficient service, if such
matters are not taken seriously and instead blame is shifted to the customers
or external factors then such a company is headed for a mighty fall.
7. Walk the talk... NOT!
When companies claim to set a standard of
quality or progressive level and don't follow through, it is a sure sign of
failure. I’ve worked in few such companies where it was disappointing to see
them make tall claims not only to their employees but also to their customers
without having a concrete plan to achieving that objective. Nothing could be
worse than not being able to walk the talk at corporate as well as individual
level.
