Right now, I'm loving Exxon Mobil (XOM). Loving it!
Maybe the oil colossus deserves some of the negative press it has received over the years. But the reason I love Exxon isn't because it made record profits last year, as oil prices rose and consumers got squeezed. No, no. The reason I love it is because it made a ton of money this past quarter, too. Its three-month profit was $4.6 billion. Wow!
Wait a sec. If I loved Exxon only because it made tons of money during this so-called "Great Recession" than by that logic, I should be loving a lot of other big companies, too. Because it seems like a lot of profits were made this quarter.
Don't believe me? Check out the 2009 first-quarter profit scoreboard:
Keeping the Hatchet Sheathed
Oh sure, everyone's numbers were down from the prior year. But isn't this supposed to be the worst financial crisis since the Great Depression? Apparently no one told these guys. They seem as if they're doing O.K. Of course, they took this news quite differently from the people running Exxon. They cried. They panicked. And they seem to have put the blame squarely on the shoulders of their employees. So to fix the problem they just—you guessed it—laid them off!
These companies, despite earning millions or billions, recently got the hatchet out or announced upcoming layoffs: Pfizer, 19,500 people; DuPont, 10,000 people; IBM, 7,800; Microsoft, 5,000; J&J, 900; P&G, 90.
But Exxon didn't. Even with a 58% drop in earnings this past quarter from the same quarter in the previous year, the oil giant did not lay anyone off. I recently moderated a small business town hall event and asked 15 or so business owners if they would do the same if revenues were down so drastically. All said yes. "As long as you're still earning money—not to mention in really difficult times—why get rid of your most valuable asset?" one participant told me. That doesn't make sense to people who know what they're doing.
"Our business plans are developed with a very long-term view in mind," Exxon Chairman and CEO Rex Tillerson said at a press conference after the inauguration of a liquefied natural gas plant in the Persian Gulf state of Qatar, according to the Associated Press. "So the fact that we're in a temporary economic downturn—and it will be temporary; it will turn—really does not affect our business plans at all."
Tillerson is taking the long-term view. Is he crazy? That sounds more like a smart entrepreneur rather than the typical puffed-up-scared-by-Wall-Street CEO.
Tillerson sounds like many of the business owners I know. We really, really don't like laying people off. And for most of us, as long as we're still showing profits, we're going to keep our people employed as best we can.
We're not philanthropists. It's not altruism. It's selfishness. Acquiring and training good people costs a lot. Losing these people is a killer. So we do this for our own self-preservation.
Yet still, we're not as cold-hearted as some of those big company execs. In a 50-person company you tend to really get to know your employees, their families, their lives. Kicking them out in the cold, for no other reason than just to maintain or increase your own profit levels, is not a very human thing to do. Or good for the community. And our businesses need our communities to support us.
Although the CEO of one of the world's largest companies, Tillerson is behaving more like a nimble entrepreneur. Independent business owners, like Tillerson, look toward the long term. We know downturns, and we know busy times. Everything's a cycle. So when things slow, we come up with other things to keep our employees busy. They clean house. They get more training and certifications. They help collect cash or do some telemarketing. They paint. They entertain at our kids' birthday parties. Whatever. We keep them employed. Because we know we'll be needing them soon enough. And turning them loose benefits no one.
People: Our Most Valuable Asset
During this recession, we've learned a few other tricks, too. Some of my clients have reduced their work week to four or even three days (but keep all benefits intact). Others have pushed their employees to take vacations. A few business owners I know have temporarily cut paychecks. Even those who have been forced to lay off employees give them a first priority for their job when things pick up again. We'll do everything we can to hold on to our most valuable asset, our people.
So I admit to having a little soft spot in my heart for those guys running companies like Exxon. I'm not suggesting you ignore the company's well-documented lack of interest in alternative fuels and other shortcomings. But for keeping people employed, I'll spread a little love their way.
Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service, and financial management tools to small and midsize businesses. Marks is the author of four best-selling small business books and writes the popular "Penny Pincher's Almanac" syndicated column. He frequently speaks to business groups on penny-pinching topics. More penny-pinching advice from Marks can be found at www.quickerbetterwiser.com.