The Problem of Growth - J. Peterman Company

Reflection Essay: The Problem of Growth

The Rise and Fall of the J. Peterman Company talks about the issues that organizations face when they experience growth and are unable to get a grip on the speed at which the organization is growing. They end up taking rash decisions, because sometimes there isn’t enough time to consider all the factors. Apart from the business decisions that need to be made, there are decisions with respect to staffing and resources that need to be attended to. And sometimes trying to figure all of this, the main goal about why the company was started and what it really stands for is lost. There is no one particular reason because of which the J Peterman company failed. It was a combination of several factors, over a period that contributed to its failure. However, I believe its roots were sown after the company decided to work on expanding into retail. The company did well until 1996, where it had a close-knit group of people, all working towards the same goal. However, these goals were not stated in the form of a vision statement. Since they were a small group, it was common knowledge to them. Post 1996, the company’s rapid expansion into the retail sector and hiring new employees, who were not aware of the ideas and goals the organization shared, cracks began to show up. And from there on, the downward spiral started. Also, the company took up more than it could handle, which was another reason that contributed to its failure. In addition, the other two readings talk about how important it is for organizations to understand what they believe in and how they want to go about achieving their goals. It is not necessary to follow the herd mentality and go about doing the same things that other organizations are doing. It might have worked for them, but you need to truly understand what works for you. John Peterman had it really going with his company. It was doing well when it was a small group of close-knit people, who understood the company’s vision. However, with the rapid expansion and the fact that he was answerable to the investors, put him in a hard spot where he had to take decisions that he wasn’t comfortable taking. Hence, it is crucial that you don’t lose the motivation that drove you to create the company and what it really stands for.

When I read the J Peterman story, I realize how similar it is to what my dad’s business and company experienced, however my dad was able to take a step back, assess the situation and take a stand for what he believed in and the reason he started his business. My dad owns a rent-a-car business back home in India. The business started out small, with my dad having a small part of our home converted to an office consisting of 4 staff members – 3 drivers and 1 office staff. My dad spent most of his time trying to get business, all the while trying to increase his fleet of cars. He was involved in all the business processes, right from getting business for the company, finding the right drivers, working on invoices, following up with the companies for payments and sometimes if the need arises even being the back-up driver. Having no experience in the field of rental cars, but just the passion for cars and the idea to provide the best service to customers is what drove my dad into pursuing this line of business. The year 2000 saw a boom in the Indian market and the business started to grow. What started out as a small business with 3 drivers, now grew into something much larger. He had 12 drivers and 4 office staff by the end of 2000. And this growth was experienced in a period of 1.5 years. This was tremendous growth and my dad felt he stretched too thin to look into all aspects of the business. Initially he was involved in the process of hiring drivers for his company. He would take the test drive, do a background check and only then approve of the driver. He would personally train the drivers on how to address the guests and the kind of service he expected them to deliver to the guests. However, now with the business picking up, he devoted most of his time meeting with corporates and trying to expand his business. The process of hiring drivers was left to his managers. But with the increasing work load, the managers were not able to train the drivers the way my dad did. Soon, they started hearing complaints from their clients with respect to the service provided by the drivers – it was not up to the mark. Sometimes the companies would personally call my dad to address how they felt that the quality of the service was declining. This really hurt my dad, because when he started out, he envisioned to be the company that provided the best service. He realized that there was no point trying to get in more business, if the quality of his service was declining. The competitors would easily take away his business. Besides the reputation he had created for the company - of it being the one that gave the best customer service was being hurt and he realized that he needed to address this issue immediately. He set up meetings with his drivers and explained to them about the complaints that the company was receiving. He asked them what was really going wrong and understood that they lacked in their language skills. Since, most of the corporates had international guests coming in, they required drivers who could speak basic English. My dad then made sure that all the drivers took English lessons. Also, there were monthly trainings that took place to teach them etiquettes. The steps taken started to give good results. My dad would hear back from companies saying they like the initiatives taken by the company to groom the drivers and that the company was gaining back its reputation. The company ended up being voted the best rent-a-car company for the year 2001-2002.

...