Categorized | Job Hunting

Should You Join a Dying Dot-Com?

Posted on 26 November 2008

When Jill McCurdy was hired by the Koss Corporation in March 1984, she thought she had found the perfect position and job security in the process. The Milwaukee-based company, launched by John Koss in 1958, boasted a long and proud history as a manufacturer of stereo headphones.

“Anyone in the state would have been proud to work for Koss,” says McCurdy. But, eight months after she joined, the winds of change suddenly altered her course. Koss summoned all employees into the cafeteria to announce the company had filed for bankruptcy. Like everyone else, McCurdy listened to the bad news in disbelief.

History Repeats Itself
In the face of an ongoing dot-com shakeout, thousands of workers across the United States find themselves in the same situation. What happened to McCurdy is all-too-familiar: A new management team took the helm, spent money aggressively, and expanded the company too rapidly. Before anyone knew what happened, the company was in trouble. Koss’s credit dried up; suppliers wanted payment in advance.

Many people make the mistake of jumping ship at the first sign of trouble.

“We were in over our heads,” says McCurdy. Before long, the layoffs began, leaving just empty desks and darkened offices. In short, crisis ensued. McCurdy feared she might be on the pink-slip list. She had seniority on her side and was safe for the time being. But this was only a temporary consolation–the company could always close down completely.

Suddenly, McCurdy had to make a decision. Should she jump ship or pitch in and help resuscitate the ailing business? She opted to stay, a decision she has never regretted. Even though she faced the prospect of losing her job within weeks, it wasn’t a tough choice. “I loved the industry and I liked the people I worked with. Even though the company was in trouble, I saw it as an opportunity to take on new responsibilities and make a difference,” she says.

No Substitute for Hard Work
Like other loyal staffers, she rolled up her sleeves and wound up doing the work of three people. “We practically worked around the clock,” she says. “As scary as it was, it was exciting. Everyone lived and breathed the company because we had a big stake in turning it around.”

Hardly a year later, the company overcame its financial crisis and was out of the woods. McCurdy and a few others emerged as heroes. Management was grateful and McCurdy’s loyalty during times of duress paid off and opened doors that would have been difficult to pry open under normal conditions. In the space of six years, McCurdy ascended through the ranks from a training and development job to vice president for product development.

The moral of her story is simple: Crisis often breeds opportunity. “Many people make the mistake of jumping ship at the first sign of trouble,” says McCurdy. “But, often there is a good chance the company will pull through, which could mean incredible opportunities for the survivors.”

While the hero stuff sounds great, how do you know whether it’s worth sticking around? After all, nobody wants to go down with a sinking ship. “All you can do is try to make a good decision based upon the variables,” says McCurdy. “I believed in the company’s founder and its products. I saw real integrity and felt the company had what it takes to survive.”

Loyalty vs. Common Sense
While loyalty is admirable, Franklin Loew believes in looking objectively at the crisis situation from different vantage points. Loew is president of Becker College in Worcester, MA, and former head of a Boston-based pharmaceutical company. First, he says, you should evaluate the company’s products and services. Do they have what it takes to weather the storm? If the company is involved in unethical practices or if its products are flawed, get out fast. Second, can you risk taking a pay cut and losing your job? “If you have a family to support, it may not be possible,” Loew adds. “All these factors must be taken into consideration before you make your decision.”

An equally dangerous option is taking a job with a company that’s already in trouble. Many dot-coms fall into this category. According to a recent study by San Francisco-based Webmergers.com, a research service for buyers and sellers of Internet companies, 130 Internet companies folded since January and the closure rate is accelerating. More than 8,000 jobs were lost due to closures. About 75 percent of the dot-com shutdowns were in the B2C sector and 60 percent of the shutdowns involved e-commerce companies, Webmergers reports. And it’s not over yet.

You’re definitely taking chances when you stay with an ailing company or take a job with one struggling for survival, warns Amy Fried. She is an executive recruiter with Roz Goldfarb & Associates, a search firm specializing in new media placement in New York City. “In this sluggish economy,” Fried warns, “taking a job at a dot-com or telecommunications company is chancy. But, if you’ve been out of work for several months with nothing in the offing, what do you have to lose? It amounts to a smart survival strategy, especially if you have a family to support and a mortgage to pay.”

Crisis may be the ultimate networking opportunity, according to Gerald C. Meyers, former chairman of American Motors and co-author of Dealers, Healers, Brutes and Saviors: Eight Winning Styles for Solving Giant Business Crises (Jon Wiley, 2001). “Do the best you can and you won’t be forgotten,” he says. “Virtually every contact–company brass, employees, vendors, clients and customers–is a potential networking lead.” It’s also an opportunity to master new skills and potentially emerge as a leader.

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