MARCH 8 — The line separating the two is very often blur.
For the sake of discussion, let’s assume that I’m a third-generation owner of a company contracted to run a commercial frog farm.
Let’s say my grandfather, who started the company, had noble intentions to cater to the demand for frogs in the Western dining industry. The frog farm owner would pay a fair remuneration in exchange for my grandfather running the farm well based on expectations and deliverables outlined in the contract.
My grandfather, with his passion for frog farming, was very dedicated and his passion rubbed off onto his management team. The farm was well-run and well-maintained, and the expectations in the contract were met, maybe even surpassed on occasion. This meant that the farm produced the best-quality frogs in the market, recorded good profit margins as a business and the farm owners were very happy with the company.
In this case, my grandfather’s company deserved the remuneration in exchange for good management of the frog farm. Excellent performance also built goodwill and trust with the owners.
When my grandfather passed the reins of the company to my father, my father continued existing practices yet also sought to do some things in his own way. At this time, the frog-farming industry boomed.
Globally, a researcher estimated in 2009 that between 180 million and over a billion frogs are harvested each year, with demand driving numerous species to extinction due to the fact that most of the demand were met by wild frog populations.
Hence it was a bigger industry in my father’s time then when the company was founded. Logically, the frog farm prospered further and recorded even bigger profit margins. The owners grew richer given these conditions.
But maybe the management team in my father’s time did not share my grandfather’s passion. The management quality began dropping. “Cost-efficiency” entered the picture and the company began finding ways to cut costs in order to increase its own profit margins — maybe using poorer-quality fences to keep predators out and frogs in, skimping on artificial frog-feeding necessities, poor maintenance of landscape and pond design, etc. Maybe corruption crept in, with some of the staff beginning to embezzle money and misusing company resources.
This hurt the quality of frogs churned out by the farm and the farm lost some portion of its frog market share to competitors offering higher quality frogs. The frog farm’s performance as a business deteriorated. Correspondingly, the owners’ profit margins reduced.
However, the business was still profitable albeit less optimally, so the owners took no action given the goodwill and trust from my grandfather’s time.
Then the reins passed to me. By this time, the corner-cutting and corruption practices are considered normal and are at rampant levels. My grandfather’s frog-farming vision was lost and the management is performing poorly. Instead of trying our best to perform well, my management team is on auto-pilot, just going through the motions.
The frog-farming business is barely keeping its nose above water and the owners have unhappily noticed. Instead of high-quality frogs, the farm now produces overpriced, disease-ridden frogs due to poor feeding, which also caused cannibalism among the frogs, lowering population and resulting in lower total frog output. The farm’s financial records are full of discrepancies and it is slowly losing customers who turn to other frog suppliers offering better-quality frogs for fairer prices.
In this scenario, naturally the owners would seriously consider terminating my company’s longstanding contract and hiring another management company to operate the frog farm.
Can I cry foul and call the owners ungrateful? Riding upon the goodwill and trust gained during my grandfather’s time, can I demand loyalty from the farm owners and tell them to continue rewarding me for my grandfather’s excellence while delivering sub-standard performance myself?
The simple answer is no.
The frog farm is a business and it must continuously look to the future in order to continue surviving. It would be within the owners’ rights to ensure their business is running optimally and gaining maximum profits. Delivering what you are hired for does not equal a debt of gratitude on the owners’ part, and the moment the performance falls short, the owners would be crazy not to act in order to rectify the situation.
This means goodwill and trust earned by my grandfather’s time means nothing. While the company endured, the people running it have changed — the management is only as good as the actual people staffing it and what they can deliver now, not yesterday.
The owners would be out of business if they do not fire my team and hire another operating company that can deliver better performance. As for my management team, it’s up to us to improve ourselves and perform to the owners’ expected standards.
It’s about results and doing what is in the owners’ best interests, because at the end of the day it’s their frog farm at stake.
Nothing personal, just business.
Disclaimer: The writer’s family has never operated a commercial frog farm and no frogs were harmed in the writing of this article.
* This is the personal opinion of the columnist.