How to know if your company is fucked?

September 15, 2006 9:19 AM

What are the warning signs that your company is a sinking ship?

I've been through a couple of bad experiences where a promising company went under, or became a crappy place to work due to various factors, including the economy and bad management.
While sitting through yet another mostly pointless meeting this morning, I began to compile a list of warning signs that it might be time to brush up the resume.
I am asking MeFi for their input, and if the list is good enough, I'll probably post it on my blog, or publish it elsewhere. (I'm especially interested in web/internet/software/new media companies)

Here's what I came up with so far:

A proliferation of meetings, especially closed door meetings and and pointless 'status' meetings.

Senior executives leave and are not replaced - someone else takes over their duties.

More emphasis starts to be placed on working hours and dress code. For example, coming in at 9:00 am sharp becomes more important than how many hours you actually work, or if your projects get finished.

Visible cliques form among the departments.

Dark humor and dilbertesque cartoons appear with increasing frequency.

posted by bashos_frog to work & money (34 comments total)

I'd go more basic than that.

Your paycheque is late.
Expense cheques are late.
There is no hardware budget and you are forced to rehab old hardware with the 21st century equivalent of popsicle sticks and glue when a box dies.
None of your software is licensed.
There is no training budget.
The cleaners are laid off and you and your colleagues take out the garbage and clean the office on rotation.
Your bosses insist on billing clients on milestones that you haven't really met.
Whispering around accounts receivable or accounts payable.
Your bosses emphasize the importance of getting a contract, ANY contract, regardless of whether or not the company can profitably execute the contract. They need the revenue.
The place is crawling with lawyers.
Skilled colleagues are dropping like flies.
posted by crazycanuck at 9:31 AM on September 15, 2006

Payment (or raises) in stocks/options instead of actual money.
Cancellation or narrowing of projects.
Senior management is often off-site or away.
"Investors" or other groups coming in and monitoring the company.
posted by blue_beetle at 9:32 AM on September 15, 2006

Senior executives leave and are not replaced

I would expand that to the entire workforce. Salary reduction through attrition is a big red flag of an employer in trouble.
posted by deadmessenger at 9:32 AM on September 15, 2006

Jack Welch buys the company

Accounts payable is spending a lot more time talking to vendors, or are not taking their calls.

Carl Icahn buys the company

No more free coffee

Microsoft buys the company

Performance reviews are delayed

Disney buys the company

"No private emails"

Company officers start dumping stock

Boxes of documents being taken from the finance office and loaded into white vans

Lots of night-time shredding

Frequent groups of suits touring the building with no explanation

Kirth Gerson buys the company
posted by Kirth Gerson at 9:33 AM on September 15, 2006

bashos_frog's list sounds more like signs that you're working for the government or other large bureaucracy.
posted by mcwetboy at 9:33 AM on September 15, 2006

Oh, and I've unfortunately experienced everything that bashos_frog listed above over the last 9 months, and 3 weeks ago, the company I work for (an Internet technology company, incidentally) was bought out by a much larger company.
posted by deadmessenger at 9:37 AM on September 15, 2006

From personal experience...

When you feel the need to take your paycheck to the company's bank to get cash, for fear of the paycheck bouncing. When you see see the VP of Sales in line doing the same thing, that's when you know you are fucked!
posted by COD at 9:44 AM on September 15, 2006

Your bosses insist on billing clients on milestones that you haven't really met. - AMEN

- Upper management gives you a complex, barely comprehensible reason why you are unable to receive product from a particular vendor. Upon calling the vendor yourself, you discover this complicated reason is "CREDIT HOLD"
posted by The Gooch at 9:47 AM on September 15, 2006

From personal experience:
* Coworkers openly drink at their desks before noon
* Account people openly lie about the number of employees to clients
* Owners ask you to lie to vendors
* The production manager whispers to vendors to "check the Dunn & Bradstreet before agreeing to the job"
* FedEx will no longer pick up due to overdue invoices
* Corporate Express will no longer bring pens due to overdue invoices
* You can't print materials at any major print vendor due to overdue invoices
* Employees are promised ridiculously elaborate bonuses (if we get through this, we're going to send everyone to Maui!) as opposed to reasonable incentives
* Owners talk about how fame/fortune/success is just around the corner more than the current state of the business
* Coworker who's drinking at 10am at his desk begins watching the Tommy Lee & Pam Anderson video at his desk. With the sound on. Loudly.
* Deadlines get more and more ridiculous. The words "team player" are thrown around a lot.
* People are given phony baloney inflated titles in lieu of raises
* The owner's daughter is promoted to head of everything, despite being 24
* The owner's son-in-law is openly running a side business from his desk/cubicle
* Coworker who's drinking and watching porn at his desk is promoted to assistant creative director and no longer hides his bong in his desk drawer
* Employees are told to lie about their marital status to clients, forced to flirt during meetings
* Owners ask designers to photoshop printers invoices to pad the out of pocket expenses
* Owner runs through the building right ahead of the builing inspector, yelling out, "If he asks, this room was here when we moved in."
* You are laid off. And then the layoff is recinded until after you turn your major project in. And then you are laid off.
* And then they call you two days later to ask you to freelance
* And then they don't pay your freelance invoices
posted by Gucky at 9:52 AM on September 15, 2006 [6 favorites]

--Not only is there an increase in meetings, but meetings with senior executives are convened with as little as an hour's notice; they're scheduled by e-mail instead of Outlook, with no pre-announced agenda

--During such meetings, the senior executive speaks to the regular staff in impenetrable corporate jargon for several minutes, and then switches into folksy plain English: "You know, back when I started working at this company, if I'd gotten news like what I just told you, I'd polish up my resume. But you don't need to worry about that. Days are different now."

--A change in pay cycles (moving from payment twice a month to payment every two weeks), or a move to start paying employees a week in arrears

--The CEO announces that he and his immediate underlings will not taking bonuses this year, despite the fact that they all took six-figure bonuses last year
posted by Prospero at 10:10 AM on September 15, 2006

* A mandatory meeting is held for the specific purpose of assuring all employees that everything is fine and that the company is doing well. Noone mentions how much stock the C level management is trying to dump on the market.
posted by ceribus peribus at 10:10 AM on September 15, 2006

1. Projects being put on hold
2. People being reassigned/pulled off projects
3. Nonstop budget revisions
4. lack of medium-to-long term strategic planning/focus on "wrapping things up"
posted by pdb at 10:16 AM on September 15, 2006

- Milestone meetings. Every. Single. Day.
- Employee/project member rate rate greater than 20% a year.
- Employees are offered the chance to buy the company.
posted by PenDevil at 10:23 AM on September 15, 2006

Personal Experience:

LOTS of new rules designed to give management a reason to write someone up for not following them.
Example: Security issues every "active" employee an access badge. You are told to wear this badge around your neck on a company issued lanyard at all times, even while in the work area. Any deviation from this rule will result in a write-up, including wearing your badge on your belt, or on a non-company issued lanyard. There is a subtle message now that the badges were issued because of a need to tell the "active" employees from "inactive" employees that do not have working badges. Badge violations are strictly enforced, and your third write-up will cause you to be terminated.
another example: loan proceessors being written up for not dumping their trash into the shred bins every night.

Cameras are installed at all entrances and at the corners of all work areas.

VP of operations dissapears mid-day, leaving subordinates in a lurch. This prompts a meeting with all staff to explain his exit was permanent and voluntary, even though he left about $20K in baseball memorabilia behind for no reason.

Turnover in upper management.

Layoffs at other locations being "leaked" by friends of the HR manager.

Payroll being changed from in-house to outsorce company, who oddly enough also outsources employees.
posted by Carnage Asada at 10:37 AM on September 15, 2006

A change in pay cycles (moving from payment twice a month to payment every two weeks), or a move to start paying employees a week in arrears

This happened to us in July. COMPLETELY jacked several eco-workers financially. We were offered three options to "offset" the week's pay we missed when the change occurred:
1) Do nothing and tough it out
2) Co. will grant a short term loan, paid back out of each paycheck
3) Cash out your vacation time

None of these really were of any benefit to the employees.
posted by Carnage Asada at 10:47 AM on September 15, 2006

er... co-workers
posted by Carnage Asada at 10:47 AM on September 15, 2006

I knew that things had gone bad when I noticed the phones weren't ringing much out in the bullpen of cubicles.

--No customers calling for support, because there were no customers. No prospects calling for new business, because Sales wasn't generating any new business.

--Executives holding mysterious closed-door meetings in two's and three's.

--The launch of a lame "internal marketing" intiative to boost morale (ha!) and improve employee productivity/performance.

I knew it was over the day I got paid with an envelope of cash, because the Payroll account used to generate the checks from ADP was empty....but hey, at least we got paid.
posted by junkbox at 10:48 AM on September 15, 2006

Non-sales employees are asked to spend a percentage of their time making cold sales calls.

Upper management spends copious hours writing and performing "team-building" presentations involving live trees and dirt, when the company's output has nothing to do with live trees or dirt.
posted by hsoltz at 10:52 AM on September 15, 2006

Wow, some of these examples would be unbelievable if I saw 'em in a movie! Here's my example, less dramatic but more of a distant-early-warning sign: mainstays of the company start bailing out. These folks are not necessarily high-level managers, but the facilities maintenance guy or an admin or the mailroom dude - basically the people who have been there for years. They're dialed into the gossip lines and they know everything.
posted by Quietgal at 10:57 AM on September 15, 2006

Actions speak louder than words. Watch what management is doing.

*Lots of closed doors that usually were open.
*Outsiders touring the facilities.
*Lots of spreadsheets being produced for outsiders regarding cash flow and finance.
*Usually talkative boss' assistant goes silent.
*Non-owner management starts coming in late and leaving early.
*Over dressed management. Either shopping the business or themselves.
*Management starts taking all accrued vacation.
*late payments.
*reduction in perks such as free soda, snacks, etc
*document retention policies are changed to be more proactive in getting rid of docs.
*Changes in personality from outgoing to silent with management.
*in a smaller company, when owner starts taking as much out of the business as possible. Starts charging personal stuff to the business.
*revenue recognition rules are changed to speed up the accounting of revenue from contracts to when signed rather than when delivered or paid.
posted by JohnnyGunn at 10:58 AM on September 15, 2006

Training and supply budgets are slashed.
VP lays off sales force.
Projects are put off or cancelled.
VP comes by and talks to you (kinda rare) and mentions the phrase "transferable skills".
Your schedule, once packed with work, is winding down, and there's little work in sight.
Boss asks you to work closely with someone - this means you won't have to supply documentation going out of the door.
posted by EastCoastBias at 11:13 AM on September 15, 2006

1. You're asked to take a "temporary" pay cut. It won't come back again.

2. The CEO tells you all that although we are are going through tough times its actually the same for everyone and no-one will be made redundant. Bonus points if he uses the words "over my dead body".

I've seen two cases of (2) and iess than a month later those redundancies came knocking.
posted by mr_silver at 11:16 AM on September 15, 2006

Personal experience:

Clocks removed from walls; employees caught checking their watches are accused of procrastinating.

Proliferation of skeleton crews on many shifts; receptionists often called to perform executive and management level tasks, with no increase in pay, title, nor benefits.

The top brass strolls about the workarea, all smiles and chatting with upper management; as they enjoy themselves, the senior members are oblivious to the fact that they may be blocking a hallway, aisle, stairwell or door during their banter session. In a number of cases, the top brass may even stoop to leaning against boxes or equipment, as if such items were inconsequential.

Delivery services/catering/utility companies angrily call lower management, demanding to know why bills were unpaid for 3 months.

Delivery services/catering/utility companies angrily call lower management, demanding cash in lieu of bounced checks.

Parent company of business is a reknowned holding corporation, which oversaw businesses in a number of fields. The field of trade you're in is one they've only just entered.

Important business meeting/"pizza party" is arranged, to trumpet the parent company's acquisition of an unrelated business. (Parent company, of course, is the aforementioned holding corporation).

Regional manager visits facility drunk. Takes your division's managers out to "lunch", and three hours later, they come back smashed.

Other regional manager shown to be a hard-as-nails, no-bullshit type. Lives up to the reputation, but baills out after two months, because s/he smelled blood in the water and had already applied for work in other outlets long in advance.

Top level manager appears to have sixth-grade reading level. Doesn't care about using profanity around vendors, staff, or clients, yet resents it when those other parties resort to being unprofessional.

Home office calls, asking for weekly/quarterly figures. When informed the report was issued earlier, person at other end shouts into the phone, "You're KIDDING me!"

Manager starts shaving/changing clothes/sleeping in office.

"Crackerjack" new hire turns out to be an old friend of management, who's only interested in the job not because they need the money, but merely to "repair bad credit" or pay overdue child support bills.

Other "crackerjack" new hire turns out to be interested in the job not because they need the money, but because the employee discounts are cool and they have extra time to kill.

Management begins running like chickens with their heads cut off because the IT department (or whomever's left in the IT department) received a notice that the software licenses on all machines will be under audit in a few weeks.

Concrete barriers serving as dividers in the parking lot removed, so cars can "pull in and leave wuicker"; same dividers moved/noticable dragged across the pavement to block off other access to company building.

Conspicious odor of mildew as water leaking through the cieling stagnates inside trashcans, buckets and plastic wrap.

Lights in parking lot turned off at night to "conserve energy".

Vendors screamed at for using company vending machines, as such behavior is "no longer part of the renewed agreement".

Fire exits propped open so management can take cigarette breaks.
posted by Smart Dalek at 11:23 AM on September 15, 2006

Technical staff expected to make sales calls during downtime.

Chief technical officer stops reading email to force owner to give him assignments in person.

Owner starts bringing large dog to office everyday where it proceeds to pee on deliverables on a regular basis.

Owner of a non physical goods, Information Systems company has technical and operations staff making runs to McDs to purchase happy meals so the included beany baby toy can be sold on eBay. Tells webmaster to start working on eBay clone and is flabergasted when webmaster let's him know that hundreds of man hours required at a bare minimum and PS a fractional T1 isn't going to cut it for bandwidth.

DBA forced to write a single table, 65 column, Access database to track said beany baby selling because multiple tables make direct record editing hard. Simple account and sales entry forms and reports written by DBA are "too hard to use" because records can't be "sorted like Excel" during input.
posted by Mitheral at 11:26 AM on September 15, 2006

The 'smart' business partner sells out to the alcoholic business partner.
posted by Gungho at 11:28 AM on September 15, 2006

Shifts in expense policy from using a company card to "use your own credit card and we'll reimburse you right away" to "we'll reimburse you every month" to "every quarter" to "we'll push it off long enough so that when we go under YOU'LL have a big chunk of debt on your personal card, and we'll never have to reimburse you."
posted by blue_beetle at 11:31 AM on September 15, 2006

You go to the doctor and subsequently find out your health insurance was cancelled for non-payment.
posted by pyjammy at 1:09 PM on September 15, 2006

- "Everybody's an account manager now!"
- All those "sure thing" customers are suddenly postponing their installations/purchases. Indefinitely.
posted by antifuse at 1:19 PM on September 15, 2006

I'm an expert! I have been employed by or involved with two companies that folded, two that were acquired, and two that had major downsizing. That's why I am now self-employed. In a few cases, I had a bit of an inside view, working in PR. I am sure some of these have already been stated, but for what it's worth, here are some leading indicators I experienced:

• Consultants or auditors on premise for re-engineering or valuation projects. A big uptick of strange people in suits walking around and parking in guest offices means something is up.
  
• Calls from headhunters to recruit you or your colleagues are increasing. They are sharks - they know.
  
• A big increase or decrease in outsourced work. Sometimes that's the first place that gets cut in an effort to avoid layoffs; other times, companies outsource more work to cut benefit expenses. Watch for a big change one way or the other.
  
• Closed door meetings at the senior management level increase or are held at odd hours. An air of mystery surrounds them.
  
• HR and PR staff staying late, being called in to meetings with senior staff. Watch for a change in HR staff demeanor. Some get stressed at impending bad news and it shows subtly; others get energized or exude a false bravado. They definitely are working harder.
  
• Your overall industry is in a downward spire or a soft market cycle; competition is fierce
  
• Management counts sales before the checks are in. Sales aren't sales until they are in hand.
  
• Your company begins to discount services or products and have lots of "sales" and sales incentives
  
• Unusual belt tightening - cutting back on subscriptions, conferences, training, equipment, travel, etc
  
• Late payment or non-payment of vendors
  
• General deterioration of employee morale
  
• Rumors really kick in. Many companies intentionally leak news to soften the blow in advance. Or discouraged managers no longer care about keeping quiet.

As deadmessenger points out, many of the indicators I and others have mentioned could also be the sign of a merger or acquisition activity too - your company may be for sale.

Talk to sales staff. They are the canaries in the coalmine, and see the problems first. Are they stressed? Leaving because they aren't reaching goals & getting bonuses?

Talk to clients and vendors. Are they happy? Are they paid on time? Is service and quality good? Has it changed?

Talk to freelancers and contract workers. Are they paid on time?
posted by madamjujujive at 1:53 PM on September 15, 2006 [1 favorite]

I'm told that a sure giveaway is the amenities in the restrooms, particularly in the womens restrooms (which tend to have more "non-essential" supplies). Once the restroom supplies are either cut back, or placed under some kind of restrictions of rationing, the company is toast.
posted by -harlequin- at 4:12 PM on September 15, 2006

Meeting rooms block booked.

HR people putting boxes of tissues in the meeting rooms.
posted by funboytree at 3:26 AM on September 16, 2006

All of the directors start buying very expensive cars.
posted by floanna at 6:14 AM on September 16, 2006

I think the earliest sign is almost always this:

Switching vendors due to non-payment.
This is always, always, always a warning sign.

The second, which is subtle, but just as insidious:
Taking new, quick turnaround jobs, for cash flow.
(this is how they're covering salaries)

Bashos - get that resume out there, take that vacation, get the company to commit to anything that they owe you (like training or the like) that isn't physical money.
posted by filmgeek at 8:22 AM on September 16, 2006

Anytime the words "Six Sigma" enter an organization. Well-managed companies have no need for this, and poorly managed companies...well, you know the rest.
posted by Carnage Asada at 3:41 PM on September 16, 2006