There’s no such thing as job security

It’s no secret that job security is on everyone’s mind, and I’ve been in that position myself. After getting laid off from a boutique consulting/contracting company in the early 2000s, I managed to land another position at a similar firm that showed great potential. Over time, however, I learned that the company’s promise was too good to be true.

My first project was managing a four- to five-week consulting engagement to define the information integration architecture for a division within a large biotech firm. My team got to work, meeting with stakeholders, interviewing key staff, identifying pain points and success factors, and assembling the product. Throughout the process, I tracked actual hours against planned hours and actual deliverables against planned deliverables. Our analysis, architecture, and road map eventually encompassed 60-plus pages.

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Though we weren’t very late in delivering the documentation, we were working more hours than projected. I grew concerned about sustaining this effort, so I poked around the shared drive and found project plans made by my predecessor. I also asked the accountant for time sheets covering these assignments, from which I created my earned value reports.

The evidence was incontrovertible: Every single project was dramatically over budget. Each of these projects was supposedly a success, but in terms of payroll and other expenses, they cost more than the revenue they generated. When I went to the CTO with this news, he didn’t believe me until I showed him the data and explained my earned value projections.

I made it a priority to change my projects so that they were financially successful. I cut back the deliverables by over 75 percent. In place of long documents, we produced a PowerPoint stack. In lieu of analysis statements, we wrote up our notes and delivered them as is. Product comparisons, as well as pros versus cons, went out the window. Instead, we provided a summary of the solutions with a road map and an offer to further evaluate recommended solutions as part of the implementation analysis.

When we were almost three weeks into our next five-week engagement, we had completed only 15 percent of the work, and it looked like we would go more than 400 percent over budget. I had to kill the project. But before we finished, we negotiated for cost increases because the client failed to meet their contractual terms and closed the project profitably — the first moneymaking project I could identify.

It was then that I decided I had to move on, but before I could make my move, the CTO called me into his office and told me the company was closing its doors in two weeks. However, he asked if I would consider working hourly with three other colleagues to help close down some projects. It was better than unemployment, and the rate and terms were good, so I agreed.

Within a few months, the four of us had completed two more profitable projects and were talking of starting the company back up. Our hopes were soon dashed, however, when the CEO and CTO committed to a new project, but for a lower fee and on a shorter time line. This absolutely guaranteed the project would cost us more than we would earn. It appeared that the higher-ups had learned nothing from the earlier failure.

In addition, my invoices were very late in being paid — way past the 15-day terms I’d been promised. I also knew that the sum of outstanding invoices was approaching $175,000, including my colleagues’ exposure. At our current pay rate, it would be a long time before we’d see full reimbursement for our work.

Additionally, I found out the company was factoring its invoices — getting money from the bank before the invoice had actually been paid, and it had been the case for months. In spite of the successfully executed projects, the company was unable to produce a positive cash flow –a very bad sign.

To get to the bottom of the situation, I sat down with the CEO to share my concerns about our finances, and he revealed that the company was walking away from over a quarter of a million dollars in invoices from vendors, previous landlords, phone companies, office suppliers, service providers, and so on. The bosses were planning to turn their back on a huge pile of newly acquired debt as well. The idea was to default, close the firm, start a new one, and transfer the invoices and payments to the new enterprise, all of which sounded like fraud to me.

This was the final straw. I had been devoted to my job and to the people who worked beside me. I had no problem logging long days and nights. I was often described as a good company guy, one who tends to say yes to new duties and requests.

But I had been burned by the layoff at that first company, and now I was exposed more than I could afford. On top of that, I had just learned that the CEO was likely committing fraud and screwing his vendors. It also seemed very likely that my colleagues and I would be pushed aside if it became too troublesome to pay us.

So I did something I had never done before: I told the CEO I was going to move on and needed to devote my time fully to finding my next position. We balanced my remaining invoice against my COBRA payments and the company laptop in my possession, and we called the split even. I believe I came out a good deal ahead of the other guys (poor bastards).

Choosing to leave that job and my colleagues gave me the opportunity to start a firm myself. Additionally, leaving the job on my own terms provided the benefit of maintaining good relationships with everyone from the original company. I wouldn’t necessarily wish my experience on anyone else, but at least I learned my habit of watching the numbers, balancing budgets, and focusing on the big picture paid off in the end.

This story “There’s no such thing as job security,” was originally published at InfoWorld.com. Read more crazy-but-true stories in the anonymous Off the Record blog at InfoWorld.com.