Corporate Canaries

Gary Sutton

• Publisher: HarperCollins Leadership
• Year: 2007
• ISBN:
  9781418525989
• Topic: Business
• Subtopic: Management
• Index: Business

In today's tumultuous business environment, managers want guidance in the form of a timely theme, a unique and memorable metaphor, and outside-the-box thinking. That's precisely what Corporate Canaries delivers. The book features five core chapters revealing five common business hazards, and each lesson is accompanied by a story based on the author's grandfather's work in the coal industry, as well as an applicable "canary warning" for each theme.

ONE

You Can’t Outgrow Losses

EIGHT OF MY COUSINS and I sat around Grandpa, squatting on the scrubbed and waxed linoleum. He poked at the cobs flaming in his cookstove.

“The luck was upon me,” Grandpa said, “so I wrote Mother a joyful letter. I told her they gave me eleven hours of work, earning two dollar and twenty, each and every day to scramble through the tunnels, wearing packs of dynamite. Mother’s landlord would read my words to her, and she’d smile at my good fortune.”

Grandpa Sutton had left Ballybunion, Ireland, at age fourteen. He found work in a Harlan, Kentucky, coal mine.

CORPORATE CANARIES

Blaze McTavish owned the place. He pushed hard, never spoke gently, and didn’t know how to stand still. He instructed the men to drill, blast, and shovel, drill, blast, and shovel, never detouring or studying the wall veins. McTavish believed if they dug faster and straighter, ultimately they would discover the most coal. Unlike other miners, he blasted, moving rock and soil faster, ignoring the quality of the ore.

“It’s nature’s game of chance, men,” he explained. “She puts out thin veins of coal to fool us and hides the largest deposits elsewhere in her guts. The secret is to blast and dig far and fast so we score sooner.”

They dug. They blasted. They drilled. His mine produced more rock and consumed more dynamite, drill bits, picks, rail track, and ore wagons than all others combined in Harlan County. McTavish found just enough coal to maintain the frantic digging. The workers celebrated Thanksgiving with an underground lunch and a full hour break. With twinkling eyes, Grandpa said that his turkey drumstick looked big as a shillelagh. He felt thankful, feasting seven hundred feet below the surface of his new country.

McTavish worked the miners hard but did not ignore safety. Canary cages dangled from the overhead beams every fifty paces along each tunnel. The men knew to glance at the birds as they passed. If a canary fell from its perch, they’d shout an alarm, and all would sprint to the lift, hoisting themselves up into fresh air. A tiny bird’s tolerance for methane is below ours, Grandpa explained. These lifesavers signaled danger before any miners fell.

LISTEN FOR THE CANARY

Just like the canaries detected poison gas, our first “canary” warns when your company tries to sell its way out of losses. This is the most common cause of business failure. I’m not innocent. I urged Graphic Arts Center, our subsidiary, to boost sales. They did. Graphic Arts Center, the largest printer in the West, “blasted and dug” more printing business indiscriminately. We sold more. Losses started. My fault.

McTavish’s three powder monkeys, Grandpa, Liam, and Charlie, took turns loading and carrying the dynamite. Each week Grandpa worked in the shed Monday and Thursday, scrambling through the shafts Tuesday, Wednesday, Friday, and Saturday.

“So every three days, we powder monkeys rinsed our lungs with fresh air,” Grandpa explained. “But the Irish Virus, that whiskey bug, infected Charlie. He’d pass out in his tent many an evening.”

On the days when Charlie showed up late and hung over, Grandpa and Liam took his place, jogging to the shafts instead of walking. McTavish never noticed Charlie’s absences; he just grinned at Grandpa’s and Liam’s pace. Charlie always snuck in by 7:00 a.m., sixty minutes late, and worked an extra hour to compensate, until 8:00 p.m.

“I be scurrying through the tunnels,” Grandpa said, “and ’twas Tuesday. Me pal Liam loaded our vests.” Charlie showed up on time, Grandpa explained, so the pace went steady, yet hard enough that everybody sweated through their shirts by midmorning. Grandpa stooped and lugged explosives to the second tunnel, then the first, the third, and back to the second. He repeated several cycles before lunch, each time with a few sticks of explosives, never carrying enough to collapse the whole mine, should his load accidentally blow. Each canary chirped or fluttered as he passed. Grandpa’s lantern lit one wall, then the other, a stretch of ceiling, and the floor. He stooped and struggled, peering ahead.

“Probably ’twere always so,” Grandpa said, “but me thick head only noticed something on that particular Tuesday.” He watched McTavish himself drill the holes at the end of a tunnel during one of his deliveries. McTavish shoveled rock later the same day, after a blast, at the end of Tunnel One.

It impressed Grandpa to see an owner work alongside them, handling any job in the mine. But Grandpa also noticed several thin veins of coal lacing Tunnels One and Three. Thicker lines ringed Tunnel Two.

Liam and Grandpa discussed this finding in their boardinghouse before falling asleep. Grandpa lay under the bed, with Liam taking his turn on top of it. These coal stripes fascinated them, but they followed McTavish’s instructions, ignoring the walls, drilling straight, blasting and digging, hoping to stumble across a mother lode.

Several days later, Liam, Charlie, and Grandpa talked again about how Tunnel Two showed black stripes of coal in several places. It seemed to them that these veins showed where larger deposits must exist. Some were hints, barely a finger wide. One ran from the midpoint in the south wall to the ceiling. Another circled the entire tunnel, never thickening beyond two fingers. The third stretched wider than a hand, ringing the entire tunnel. But most interesting to Grandpa, all grew bigger on the south side.

Liam reminded Grandpa that they were making so much money that they sent some home each week, and McTavish understood mining better than they. Grandpa agreed. But he kept thinking.

Grandpa got Liam and Charlie to drop an extra vest to him in the mine, placing it on the counterweight each time the cage reached bottom. This way he could deliver two loads and surface only once. Grandpa hustled. He couldn’t do more in a day because delivering too fast might threaten Liam’s employment and certainly Charlie’s.

Blaze McTavish noticed. He wrapped a damp arm around Grandpa’s shoulders after work one night, told him great things lay ahead, and invited him to dinner.

“That moment was sure to come,” Grandpa said, “and with McTavish seeing my efforts, instead of me boasting, I became all the more appreciated.”

They ate in the hotel dining room. Grandpa told McTavish about the coal stripes in the south wall of Tunnel Two, asking if he’d ever tried digging instead of blasting, simply following the veins. McTavish patted Grandpa’s forearm, harrumphed, and complimented his productivity.

Later that night, Grandpa told Liam he had mentioned the coal stripes to McTavish.

“Mind your mouth,” Liam said, “oh, please, mind your mouth. We get princely pay from McTavish. Don’t be risking things.”

November’s temperature drop caught Charlie by surprise. He asked Liam and Grandpa if they’d share their room, although he hadn’t saved enough to pay. Liam and Grandpa felt awkward. Charlie had missed several days the previous month, forcing them to work harder to cover his absences. They turned him down, but dipped into their savings and purchased some old blankets from the hotel for Charlie’s tent.

Grandpa continued double-loading dynamite, making two deliveries instead of one per surface trip. He jogged to and from the shed on top. McTavish raised him by a penny an hour. He proudly wrote his mother, reporting his pay increase, hoping again that her landlord might read his letter to her. If not, surely Father Sullivan would.

LISTEN FOR THE CANARY

McTavish blindly pursued the coal, just as some companies blindly pursue sales. Indiscriminately. While competitors work smarter. EDS captured billions of contracts that IBM passed by. EDS bleeds, shedding management and employees while IBM reports profits.

Charlie, however, missed Monday and Tuesday, and McTavish noticed. When Charlie dragged in late Wednesday, he suggested to McTavish that they dig sideways, following the veins. McTavish fired Charlie. A James Wentworth, from London, signed on to take Charlie’s place. Charlie’s departure saddened Grandpa. A Brit replaced him, which agitated Grandpa.

“That wretched kingdom, fouled nest of Cromwell,” Grandpa muttered, despising the British. They showed Wentworth how to pack the dynamite vest after he carried for two days. Wentworth learned where each canary cage hung and how to watch them. After several weeks, they worked comfortably as a team. Grandpa never disparaged England again.

One Sunday afternoon, Wentworth invited Grandpa and Liam to watch a steeplechase. A group of English miners from a smaller operation in Harlan County, the Bixby Mine, attended. Wentworth took care that the groups mixed carefully, betting only a penny on a horse, imbibing one half pint of ale apiece and no more, comparing mine stories.

LISTEN FOR THE CANARY

Just as Donald Trump yells “You’re fired” on TV, his casinos enter bankruptcy again and again.

“It would be a chore, working for Bixby,” Liam said afterward.

“Aye,” Wentworth replied, “there’s apparently not a straight path in the place.”

“But did ye notice they get more coal than we?” Grandpa asked. “And they’re half our size. All digging, no blasting, just follow the veins.” They fell silent.

Early Monday, Grandpa pushed the sticks into the vests while Liam and Wentworth hustled up and down the shaft. Just as Liam scrambled back to the shed, Grandpa handed him a loaded vest. Blaze McTavish scurried past, shovel over his shoulder.

“Top o’ the morning, Mr. McTavish,” Grandpa said. McTavish turned, waved with a smile, and marched toward the shaft.

“We’ve blasted all three tunnels,” Grandpa added.

McTavish paused, shook a fist in the air, and shouted: “You’re the pride of that green island!”

“Might I speak with ye after hours?” Grandpa asked. Liam paled.

“Sure, laddie,” McTavish replied, walking on.

“Oh, no,” Liam said to Grandpa. “Let things be. We’re doing just fine. Don’t be turning over the cart.”

Grandpa replied that he wanted to help McTavish do better. The difference, he said, would be following the veins, just like Bixby. “With our size,” Grandpa said, “we could fill five trucks with black every day. No blasts, just digging.”

That night, Mc-Tavish and Grandpa met at the hotel and split a pot of coffee. Grandpa told McTavish what he heard from the Bixby miners. McTavish frowned, stared into his cup, and asked how many sticks were blown in his own tunnels that day. He smiled at the answer, but stopped when Grandpa suggested that their blasting might not be as productive as following the veins. McTavish left without a word.

LISTEN FOR THE CANARY

Had Time-Life understood this canary lesson—that you can’t outgrow losses— the company never would have merged with ...