What is the point?

Discussing the book The Peter Principle may seem odd. But for family owned and small business it is very important to realize that big company fiasco's can attack your business too. You are not immune. As a matter of fact, you are vulnerable. Many small and family owned business owners think that they are immune to big business problems and it is quite the opposite.

Take, for example, health insurance. Because of the smaller size of your group, you might be paying higher rates but health insurance as a benefit is so important to your employees these days. At my current consulting arrangement (they have 5 employees and sales of about $500,000), the primary and most important benefit is health insurance. The employees here are all family and they are all desperately in need of this benefit and are willing to pass up other things like vacation pay, some holiday pay and raises to make sure they keep the health insurance.

You might think that is not a problem for big businesses. Well, look at General Motors. One of the things that has them in trouble is $98 Billion in unfunded retirement plans and $43 Billion in health care costs for retirees and others. It may be what puts them in bankruptcy. That number is mind boggling. It is one of those things that their management should have been thinking about a long time ago. Instead, times were good, cars were selling and credit was easy. Not now!!! Sure they cut many jobs and closed plants. It was too little, too late. Just wait until they go into bankruptcy and all current contracts are now open for discussion. Guess what will be most important to the unions and the rest of the employees. Cut their pay, reduce their hours, don't contribute to their 401(k) BUT do not get rid of our health insurance. Just watch and see.

The Peter Principle endeavors to get all businesses to understand that they must be sharp. Constantly watching their customers, their market and their employees needs and be ready at a moments notice to change gears. Quit spending so much time worrying about who has what title and concentrate on your planning, strategic planning, and running a lean, mean, fighting machine.

What do you think?