I worked for a startup in the 90s where our boss came to us one summer, and said, “look, I have to be honest. Times are hard. In a few weeks, I’m not going to be able to pay all of you. So, you have two choices:
- We shut down today. I pay you each for the next few weeks pay, and we close up shop. No questions asked, no pressure.
- You each take a cut in salary, approximately 1/2 of your pay, or however much you can afford to cut. We keep working on making a sale, and if we do, we probably won’t be able to pay you back.”
What happened next..
We sat in a conference room, about 10 of us. Generally people said they wanted to bail. But I stood up and I said “look, we are this company. We make it what it is. We know we’re the best in this business, so why go work somewhere else that, at best, will be mediocre? Most likely it will be one of our lame competitors, with their shareholders and Wall Street goons. So I’m not saying I’m not going to freshen up my resume, but I for one am taking the pay cut.”
The Result
Everyone stayed. In about a month, we got a new contract and our doors stayed open. The next spring, we all got a huge check out of the blue. The boss called a meeting and with a tear in his eye he said “you guys make us what we are. You took a risk and believed in each other, in our sales department, and me, and not one of you came to me about those wages. Therefore I have repaid you all today plus an additional $2000. Thank you.”
The company is still in business, in a larger facility. It’s a little smaller these days, but the soul of the company is still there. I left for other reasons eventually, but I’ll never forget the lesson I learned: companies are people, and the future of a company is in the hands of those people. So… treat them right. If not because it’s the right thing to do, because it’s good for business.