Recently in Delaware, a well know auto parts company did a comparative study and decided that Delaware was ripe for expansion. The acquisition costs were low, taxes low, and competition was archaic and outdated. They received the required financing and moved in.

They built a new store every 120 days. Gradually they had received all but the most loyal of its competitor’s regulars. They began to set the standards of how business could be run. Were one to write a textbook on how to succeed in acquiring a new market, they would have been the most quoted source. Comparatively their service times per transaction were faster, their customer satisfaction results the highest, and their return to the bottom line was better than those same company’s stores in other states.

Every opportunity was met with success. Investors as well as customers were happy they had moved in.

Then, almost inexplicably, the upper management decided to buy a local strip club that was up for sale. They tackled the purchase with meticulous detail. They wined and dined, then cold shouldered the prospective seller, until he, desperate to unload the property, gave it up for a song. No one is certain as to why this company would go into a venture half-cocked. Some thought it was for reasons, deep, secret personal reasons, that guided the chief executives decision. But for a song, the place was acquired and a great party was thrown to celebrate the new diversion. It was even whispered by some, that all entertainment costs charged to the auto parts conglomerate, would be at cost, if even charged at all. Those few who fearlessly stood up to the executive and challenged him to explain his weird choice of action, were chastised publicly and told not to worry, it would pay for itself ten times over……

But no one knew how to run it……Apparently upper management was so concerned with the acquisition and the possibility of future profits, that in their rush, they had failed to plan for its management.

“Don’t worry. We will do it” they said. They chose a bright young parts manager and put him in charge. Since the facility was intact, they placed want ads for employees and prepared to open their doors. But being new to the porn arena, caused many of the local entertainers to become a little leery of signing up. “Let’s wait and see” was their approach.

Desperate, because of upper management pressure to get something done immediately, the young part’s manager asked some of the company’s most loyal employees to moonlight for him in their off hours………Opening day was a flop.

Jeers, hoots, holla’s were shouted at the dancers. The locals treated them with contempt. Who pays to see a middle aged pot bellied male clerk, dance around in a thong? Not only did the employees get shouted off of stage, but they failed to receive tips as well. Desperate, the young parts manger made deals from his car’s window with hookers off of Route 13. He asked them to come in and fill his roster. The hookers would do so only if he stipulated that they could ply their other trade within the club’s walls. He felt he had no choice but to agree.

Costs were running 200% more than anticipated. They had underestimate the clientèle. Southern businessmen, these locals were not. Heroin was sold openly.

They had bitten off more than they could chew. Those who had supported the diversionary financial venture, began to come under fire by stockholders. Over and over the CEO reassured them that all would work out.

Close it down to stop the financial bleeding he was told. No he insisted. That would be a failure. He would not do that. Instead we will staff it with all our employees. Every employee will work half a day at one of the stores, and the other half would be at night, inside the strip club.

As the staff levels increased, operations stabilized. However the client base hemorrhaged. Most nights were devoid of customers. Occasionally a group would arrive from out of town. The strip club soon sucked up more profits than the auto part’s stores could afford. For the first time, the company dipped into the red. It never recovered…………

Then came the vice squad. Arrests were made and prostitutes and management were incarcerated. Fines were levied against the holding company. There was no money left to pay them. Under court order, the doors were closed.

For whatever the reason, whether it was due to loyalty, or trust in his past brilliance, or personal fear, no one stood up to the CEO. All who came to advise him, left with head hung, hat in hand……No one pushed back…at least not hard enough…….and as the result,…..the entire enterprise was eventually auctioned off to pay the creditors no more than 18 cents per dollar invested……….

Moral of the story: Extravagant adventures sometimes end where you least want to go……Planning make perfect……

Relevance of the story: I’m sure you are smart enough to have figured it out by now.