The Rat’s Rules: #5 "The first rats to leave the ship are the ones who can swim."

The Rat's Eye Business Rule #5: Stuff ends. Eventually, everything and everyone dies. Anyone who uses the words “forever,” “in perpetuity,” “to the end of time,” or any phrase or word similar to those in relation to anything human is clueless about time, death, decay, and entropy. Businesses, and in particular corporations, are designed to be easy to kill and for the killers to get away punishment-free.

Businesses often get shutdown to protect the people with the most money and power. The bigger the business, the more protection provided to the perpetrators. The people who did the work, created the products and services, produced the products and services, and who believed in whatever "mission" the business pretended to have get sacrificed. It's the way life in this country has worked for 200+ years, with only a few moments of interruption. Corporations whine that "employees aren't loyal these days." Interpret that to mean, "You people are too smart to buy into my bullshit."

Somewhere out there in the web is a reprint of a great speech Andy Grove (one of Intel’s founders) gave to a collection of business assholes where he explained why employees did not owe those rich and powerful men one ounce of loyalty. His recommendation to employees was to consider their employers as one of many possible customers and to treat their own careers as independent businesses. One absolute rule for the self-employed is to never limit your business to a single customer. Likewise, an employee who commits all of his output to an employer is destined to be disappointed and, probably, unemployment or worse. An employer deserves exactly the same loyalty as that employer gives to employees; nor more and probably slightly less.

In my 50+ years of employment, the majority of my past employers are gone. Now that McNally Smith College of Music has joined those ranks, seven of the twelve employers on my resume have vanished. One, ex-Fortune 100 Guidant is on record as Forbe's #2 "Worst Mergers in History." Another Fortune 500 train-wreak, Telectronics, would have resulted in criminal FDA prosecution if Clinton had been a fraction of the Democrat some mis-remember him being. Two of the small corporations on my resume were absorbed by larger firms; one for a profit and one sold for patents and equipment. The rest just disappeared without a trace. Not a one of those failed companies were well managed, but the mismanagers were all grossly overpaid for their incompetence. Most of them were grossly over-compensated for blowing up the companies they mismanaged. The fortunes created by some of those golden parachutes could have solved Greece’s economic problems.

Here's what I learned from my first experience, back in 1972, with one of those companies. My tech-mentor, L.A. (Arnold) Stevenson, a high school dropout/genius Air Farce-trained electronics tech who is still the hands-down best educator I have ever met, "The first rats to leave the ship are the ones who can swim." That lesson taught me that the day to start looking for work was the day I got hired to a new job. That habit really came in handy when I started my own businesses. 

There is an obvious reason for that, too. The people who stick it out to the bloody end either feel they have no other good option or are so limited or incompetent that they don't have a better option. The ones who bail at the first sign of self-destruction are those who know they can find as good or better employment elsewhere. As Andy Grove infamously told us all, "Your career is your business, and you are its CEO." You are also your business' most important customer and everything you do in your career/business should be designed to first serve that obligation. In the last 20 years of my own career, I finally learned that it was time to leave when I stopped improving myself at work. That means when the resources to make yourself more marketable dry up, you should jump ship.

I didn’t stick around for the bloody end of any of the companies I worked for, but I got damn close in my first engineering job. The first time that company crashed, I stayed until I’d been asked to layoff every one of my techs and mechanics; then they laid me off just before Xmas (sound familiar?). Six months later, that company rehired me as a contractor which, eventually, turned into a management job. The next time their market collapsed, I was the first out the door; leaving my employees and friends with a little more job security and a big warning notice that “the end is near.” One of my best friends tried to stick it out to the bloody end and when he was laid off the Reagan economy was in full recession and there were NO tech jobs to be had in Nebraska. He died of a massive heart attack at 35 an unemployed year later. That was also a life lesson for me.

A lesson I learned the hard way from two of my defunct small company employers was “Never invest more of yourself in a business than the owners (or the people who profit the most) are investing.” For the last 15 years of my career, I regularly turned down management positions because I know enough about myself to know that my loyalty to the people who work for me will override my common sense and I will violate this rule. I will try to drag a dead horse over a mountain, even if I see the executives sitting on the damn horse while I try to move it. The simple solution to that problem is to avoid horses/management altogether. I can’t “fix” me, but I can sure as hell put some fences around my options.

Another thing I learned from Arnold was that I never wanted to be an employer. Everyone who has ever worked for me did so as an independent contractor. I don’t need the responsibility, the people who have worked for me didn’t need to be trained to be dependent on me, and I have always been too interested in too many things to want to be tied down to one business model or customer base.

I worked, weekends and nights, as an independent contractor for Arnold and he paid me about 10x what I made on an hourly rate with my day job. He constantly reminded me that he was my sole customer and that was a bad thing. That spurred me into doing a lot of electronic design work which led to my first product “invention” and a royalty check that saved my family a few years later when I was laid-off and near broke. 

Postscript November 2022: One of the big quarter-flipping winners of the past two decades has been Elon Musk. Purely by luck, his first dotcom was one of those 90's train wrecks, Zip2, that was foolishly acquired for a buttload of cash by the late-not-so-great Compaq. From there a sketchy online bank. X.com, which was merged with Musks' fascist buddy, Peter Theil, and turned into  Paypal, which was bought for a hilarious amount of money by eBay, making two of the most dangerous, most idiotic lucky fumblers into billionaires right when Republicans were eliminating the hyper rich from tax burdens/responsibilities. About the time those two were lucking into their fortunes, the people who were tossing money mindlessly into anything with a dotcom tail started damming up the waterfall of stupid cash, leaving the lucky ones who skated under the wire to take advantage of that timid moment in investment. 

Luck and management skill rarely go together and Musk, in late 2022 is demonstrating that fact. Immediately after buying Twitter, little Elon laid off 7500 Twitter employees with the finesse of a rural northern Minnesota lumberjack set loose in a national forest. Now, of course, he's trying to lure some of them back, but the exodus he began with his incompetent mismanagement "style" is resulting in more rats jumping ship; that includes a bunch of Twitter's most critical management people who are getting out while the getting is good. What do you want to bet many of those people will be recruiting ex-Twitter talent to create Twitter's next round of competition? Having voided their contracts, Musk will have a tough time enforcing anything resembling a non-compete.

#143 Personal Words (2005)

All Rights Reserved © 2005 Thomas W. Day

For the last four years, I was blessed to work for a man I respected and trusted.  A couple of those years were the best experience in my working life.  I'm not saying the company, the school, for which I've worked has been respectable or trustworthy; just the man.  However, it has been a rare enough experience just having the opportunity to work for someone with positive qualities that it has spoiled me for the usual management riffraff.  This man, Michael, quit today.  The school's management didn't think Michael's leaving was important enough to let the rest of us know, but the word spread through the staff like a fire of despair. 

The last year and a half has been tolerable, but in decline.  The people who own and mismanage the school are the usual lot; boy-men who couldn't make a sane decision if their inheritances depended upon it.  But that hasn't mattered for the past twelve years of the school's existence, because Michael could always be counted on to make the important decisions for the organization.  While the owners rattled around in their palatial offices, posing for portraits and polishing their egos, Michael hired staff, distributed resources, settled disputes, and moved the school from a dilapidated warehouse in Minneapolis to a shining new facility in St. Paul.  When every major step was completed, the owners would make a hand-waving appearance and express wonder at their miraculous accomplishments. 

Other than being a bit irritating, most of us didn't mind their ignorance, because Michael knew who did the real work and he made us into the kind of team that rarely exists outside of myth and dreams.  Today, members of that team met in hallways, the parking garage, and at least one bar to mourn the end of a workplace era.  I heard expressions of anger, disappointment, sorrow, and pain from people working in sales, maintenance, administration, and (above all in an educational institution) the teachers.  The loss of no other person in the school could have inspired so much emotion, and we've had some sad losses in the last couple of years.  If both of the school's founders had died in the floods of New Orleans, a bare fraction of that passion would have been generated.  The feeling in the school was similar to what I experienced in 1963, as a school boy, when President Kennedy was assassinated.  Hearts were broken, spirits were crushed, bonds of friendship and common goals were damaged. 

Of course, the mismanagers were oblivious to all of this because they were distracted, as usual, by illusions found in their office mirrors. 

As I sat in a bar with friends, fellow instructors, listening to plans for revolt, alternative business ideas, descriptions of escape routes, and general melancholy, I tried to come to peace with my own future.  Not long ago, I planned to spend the rest of my working life with this group.  For the first time in my adult life, I had been part of what felt like an indestructible force; like an NFL offensive line, and I was watching it dissipate like a beautiful sunset fading to darkness.  For me, the school isn't a serious place without Michael there.  What we do, suddenly, seems pointless without his encouragement, honest faith, and vision for our institution and our students.  Michael believed in what we did, he supported it.  Michael had taught every class we taught.  He understood our industry and our technology.  He recognized and attempted to fix problems before we saw them coming.  Even if the industry we represented is mostly in the past, he believed that we could guide our students into the future, making music and changing lives.  He created the school's mission and he believed in it.

What's left is about money, power, and the usual suspects are in control.  Something extraordinary has been turned ordinary.  It's incredible how easy that is to do.  Destruction is always easier than creation, but it's not as inspiring.

September 2005