Corporation... Continued

Every so often, I begin getting an increase of calls, letters, e-mails, smoke signals, carrier pigeons, and owls inundating me with questions about work. How's it going? Is your job safe? Have they laid people off? Are they outsourcing? And on and on. With what little I know, I will whet your appetite.

Anyone been hearing about the economy lately? Small thing. Closest to the Depression we've been since the... well... the Depression. A $700 billion bailout for Wall Street. Oh, and Europe and Asia are feeling the heat. Iceland is about to declare bankruptcy, for God's sake. What chapter would that be anyway? It's bad; we all know it. But what, exactly, does that mean for a company that collects on bankrupt debt? And what does that mean for a fund like Lone Star that owns a company that collects on bankrupt debt, not to mention owning God knows how many other types of companies? Alright, already, so many questions...

At first glance, what this means for my company is more bankruptcy. More bankruptcy means more ability to collect on bankruptcy. More ability to collect means more money. Whoa! Not so fast. Just because we might have more bankrupt accounts coming in the door doesn't mean the debtors responsible for those accounts will have any money to pay us. They're broke, remember. So, chapter 7 filings will go up. Even with the new bankruptcy legislation passed three years ago.

In addition, it's tougher for my company to get the loans we need to pay for the accounts. Yes, we get loans to purchase the accounts and then pay the loans off over time while also recognizing at least some profit. So, higher interest rates mean more difficulty finding loans that will allow the company to go after accounts. As you can see, there's good and bad.

But wait, there's a way around the purchasing of accounts. Service them! Instead of acquiring a loan to purchase accounts, we just bring the accounts in-house and keep a fee for dealing with the bankrupt accounts. It allows the owning company to continue to collect, recouping the value while at the same time allowing us to earn money without having to secure a loan. So, why don't we do more of that? There's a whole lot more competition for servicing. And we can't charge a fee that falls off the map just because it's lower than the competitors. At some point, we have to have confidence in our own abilities and tell customers that they get what they pay for. It's worked a few times.

Okay, deep breath, moving onward.

That was my company. Now, how 'bout the company that owns my company, Lone Star. They're accustomed to turning businesses like Ty Pennington does houses. Buy them, make them better or tear them apart, and sell them (or their pieces) within three years of purchase. It's worked well thus far. What has changed? It's the economy, stupid. No, not that you're stupid. It's just a saying. You know. First used in as a slogan in Bill Clinton's '92 campaign. Remember? Ah, never mind. So, anyway, Lone Star can't sell these companies as quickly because there's no one to buy them. What happens next? Some confusion. Some reorganization. Some action.

Lone Star decides they're going to jump in and purchase some bad debt. In Germany. In South Korea. In the good old US of A. Good old Merrill Lynch US of A accounts, to be exact. Among others. To do what with them? Collect, of course. Not through my company. At least not yet.

But there has to be more than that venture. Lone Star has to think differently about their acquisitions. Instead of pumping up or slashing and burning the companies, they have to sustain them. Foreign word, sustain. So, how do you sustain?

Well, there's the one choice. You don't. You make like nothing's happened and you try your old tactics. Bad idea. Another choice, choose to run the company the way a company should be run, i.e. with some kind of operational excellence. What might that be, you ask? Six Sigma. Remember Six Sigma? Ed showed me the books in his bookcase. Used at Motorola and GE, manufacturing companies. Worked well too. Got them close to Six Sigma in many of their lines.

Well, since I've read a bit more about Six Sigma, let me very briefly explain. If you order a warm, fresh hamburger with mustard, ketchup, lettuce, tomato, and no pickle 1,000,000 times from McDonalds, they can get it wrong thrice. That's three times they can forget the pickles. That's it. They have to be spot on the rest of the time. That's the result in a nutshell. How do they get there? Ah, well that's the rub. Increase effectiveness and efficiency using the tools of Six Sigma. BUT - and it's a big but, and I cannot lie - the support and vision MUST. Let me start that again... The support and vision MUST come from the company owners/leaders/decision makers. If it does not, then Six Sigma turns into another quality initiative that will be undermined somewhere in its midst.

Yes, yes. So what about the people at my company? What about me? Interesting question. Six Sigma does not say NOT to outsource. Nor does it say NOT to downsize. Not explicitly, anyway. Instead, it says that a company must do what is efficient and effective. Is it efficient to send the company's IT team somewhere else? If we're talking India, China, Djibouti, Liechtenstein, or Moldova, probably not. If we're talking San Fran, Dallas, or even somewhere else in Seattle, maybe. But that place would have to make up for our knowledge base and internal efficiencies. Could it? Maybe.

And what's the company's vision anyway? Purchasing requires loaned money. Servicing requires competitive rates. Something else entirely means new knowledge acquisition by the workers. Which is it? I don't know. I know that our leaders went to speak to Lone Star last week, but there is still no word about what's next. Still no vision. We are - not stuck - just waiting. And what do we do in the meantime? Well, my team will be taking Six Sigma certification classes at Bellevue Community College. And I'm in the process of completing my Project Management Certification Application. Training. For my company? Or for the future? Dunno... I jus' dunno.

I yield to the blessed St. Ignatius 'If you don't know where you're going, stay where you are.'

More to come...