When did I know my business was failing?

One of my favorite parts about teaching business strategy at Cal Poly is the bluntness of students when they've reached the final quarter of their Senior year.  By the time a student reaches Business 401, their capstone course in the Business program, they are well versed in the art of grilling their professors.  Some are vicious, some are polite, my favorite though are the ones that pull out the full court press!  My teaching style is one that puts myself out there.  I don't have anything to hide, anything to be ashamed of.  I have business success stories and I have business failure stories.  I might not have a PhD, which is one reason I don't get to teach more often, but I have experience and real world knowledge to share!

I will never forget one quarter when I was sharing some stories of my Jiffy Lube world.  I was sharing some of the experience of going through a Chapter 11 bankruptcy with our Jiffy Lube company in Washington State.  A student raised their hand and asked: "So Professor Porcher, when did you know that your business was failing?"  Up to that point I had shared the experience of buying the stores, the challenges we faced, the bankruptcy filing, the year long experience in bankruptcy, the sale of our assets and the filing of my personal bankruptcy as a result.  But this question caught me off guard.  When did I KNOW my business was failing?  Given about ten seconds to think of my response I came up with: "you know, to this day I don't think of my business as failing or failed."

Obviously the business failed.  We failed to make good on our debt, our vendor/supplier obligations and failed to successfully reorganize under Chapter 11.  So how can I possibly look at the business as if it wasn't failing or failed?  Quite simply, I always saw a way to make the business work.  I never stopped trying to make the business successful or to change our fortunes.  Every day was a challenge.  Every day brought something new and different.  But, I never stopped trying.  My true belief is that failure begins when you stop trying.  Sure, the writing was on the wall that the business was in trouble, but that was when I tried harder.  I tried to find solutions to the problems.  There was no quit.  Even after making the hard decision to file Chapter 11, there was no quit!  There was always an end game, and end solution.

There was a time in July 2011 that I knew we were going to lose the business.  My partner and I met with the new President of Jiffy Lube International: Stu Crum.  It was our last ditch effort to get support for our own reorganization plan.  Unfortunately our plan was not convincing enough for Stu to stick his neck out on the line for us.  I hardly blame him.  Our pockets were obviously empty.  All we had was our dignity, our pride and our promises to deliver now where we failed before.  Without new money, there was little else.  To Stu's credit, he delivered the news to us himself.  He took ownership in his decision and he sent us packing.

For four plus months after our plan was rejected we continued to run the business. We continued to deliver with our effort, enthusiasm and pride in a business that was effectively no longer ours.  We did so without compensation,  knowing that the end could come at any time.  We spent almost an entire year in Chapter 11 and that was the most successful year of business for us.  We were profitable.  We were up in volume.  We made good on our obligations.  We kept over 150 employees employed!  We created a model that could be successful without the burdens of our bloated oil contract or overly burdensome debt.  I don't view that as a failure!  I never stopped trying!

That student came up to me after class and thanked me for sharing.  I thanked him for asking the question and encouraged him to always look for opportunities to ask the difficult question.