Day 123 - Mourning Bud, Changing Plans

          We had Bud put down on Saturday. He was game to the end. It’s a hard thing to do—having a pet euthanized—even when it’s been an inevitable outcome for a long time. Bud is the second dog we lost to cancer this year. The first one, Ani, was also a fawn greyhound. Both dogs were fosters that we ended up adopting because they were so personable and engaging.

Well-meaning friends keep pointing out to us what a difference we made in the lives of these two hounds. Maybe so, but what they don’t fully realize I think is how much difference the dogs made in ours. Difficult as it is to have to palliate gentle and needful creatures like Bud and Ani through a terminal illness, I would not trade away one minute of time with them for anything I can imagine. I miss Bud’s crooked grin and his rank breath.

          My wife’s dad, Nelson, had a cardiac event over the holidays. It had to do with his congestive heart failure. He spent a week in the hospital, and now he’s in the middle of several weeks in a rehab facility where they are teaching him to walk again. The Parkinson’s got ahead of him while he was laid up. His muscles lost their memory. He’s no longer able to care for himself. This is making him crazy.

He’s a proud man. He’s always been the one to take care of everyone else. Having to be done for is an affront to the essence of the man. He hates the rehab facility. When he gets out he’s going to have to live with someone. He won’t be able to go back to his house by himself.

          We’ve decided, my wife and I, over the past couple of weeks that we will go live with her dad rather than with our son. That way at least Nelson will be able to go back to the house he is familiar with and in which he would be comfortable. He will have a caregiver during the day and a series of therapists and nurses throughout each week. My wife and I will run his errands, cook and serve his meals, and see to his needs the rest of the time.

*****

          The last, and the most disastrous, of the new regime’s initiatives at Albatross was a project to rationalize our pricing. What management hoped to accomplish was a simplification of pricing models by bundling options together into packages, much like the automakers do, and making a lot of commonly ordered options standard equipment. The result would be higher average unit prices as customers were forced by the bundling to purchase options they didn’t care about in order to get options that they did care about. The higher volumes of heretofore lackluster options would result in lower unit costs and increased assembly efficiencies. This is the way it works in the auto industry. Why shouldn’t it work the same way in ours?

          Here’s a possible reason why that might not work. The customers are different. Most automobiles are purchased by individual retail consumers. Most school fixtures are bought by school boards. School boards are elected. They answer to constituencies, and they also have legislative mandates and imposed budgets to deal with. School boards are vastly different from retail consumers.

Mark Twain once wrote, “In the first place God made idiots. This was for practice. Then he made School Boards.” Twain had equally disparaging things to say about legislators. School boards occupy a kind of middle ground. They answer to the voters on one side—a collection of individuals many of whom are the very idiots that God made for practice. On the other side school boards answer to legislators—fools, charlatans, and liars if Twain is to be believed. There is certainly plenty of evidence to support that view. So we have idiots answering to and at the mercy of idiots and nefarious idiots on all sides. What possible chance do they have of behaving in a logical and predictable manner?

          This was management’s problem. They had a model in mind for pricing options that depended on not only the logical and predictable behavior of our customers, but a logical and predictable behavior that mirrored that of individual consumers. Right out of the gate this model didn’t have a prayer.

Many of the Albatross natives knew this, but Boome and his imported lackeys had already instilled a healthy fear of reprisal in those same natives to the point that they were understandably reluctant to share this bit of knowledge. Once again arrogance and a management style that depended largely on threats and abuse would trump the tribal sensibilities of an old and well established organization.

          The results were spectacular, but they took a long time to play out. Because management’s attention was by then focused elsewhere, corrective action was slow in coming. The symptoms were disguised as cost overruns—something we were already experiencing and thought we knew how to address. What appeared to be high costs however were actually discounted sales prices, because what actually happened is that the idiots on the school boards didn’t think that they should have to pay higher prices to get optional features on their orders that they hadn’t specified and that they didn’t want.

Because we had made this stuff standard equipment we couldn’t easily take it off the things we were building. The sales people were put in the position where they either had to give the extra equipment away by discounting the base price of the buses or walk away from the sale. Discounts and concessions were the order of the day, but because they were written into negotiated contracts, they didn’t get reported as discounts and concessions. They were just lower than normal contract prices.

What showed up instead were lower margins that quickly translated into operating losses. The person who finally figured all this out was my genius cost accounting manager—by then so universally loathed that no one wanted to give him credit. Total cost of this fiasco--$35 million. Did Jed Boome get fired over this? Nope. A lot of people lost their jobs in the reorganization that followed, but Boome wasn’t one of them. I was, but not Jed.