The departments, confirmed as they were into the mass delusion of infallibility by Wilson himself, went their own ways, mesmerized by the promise of even greater achievements yet to come. In the process, they ignored the more pedestrian requirements of business such as serving the customer, in this case, the independent distributor. If Wilson and his managers had stopped to reflect on the peculiarities of their distribution network, they would have been far less likely to advance their plans so aggressively. Many of these distributors had grown up in the business as janitors and had themselves only recently stepped out from behind a buffing machine. They simply did not have the organizational depth nor the experience required to accommodate Pioneer's proposed expansion.
Fundamentals were being neglected at home, as well. The company's accounting systems, for example, were badly tangled, which came to light when it was discovered that two tractor-trailer loads of product -- each worth $21,000 -- had been dispatched but never invoiced. "And those were only the ones we found," Wilson laments. "There may have been more. People had started thinking an order was just a piece of paper. But it's gold, you know. I mean, things were getting loose around here."
One by one, in a quickening series of revelations, the causes underlying Pioneer's losses began to emerge. Nothing seemed to be going right -- anywhere. Wilson had recently appointed a new vice-president of sales development, and for the first time he had gone outside the company to find him. But all his best intentions foundered on the nightmare of antagonism that developed between this manager and his associates, including regional managers and several distributors. "He just didn't fit in here," says Wilson. "I don't know what got into me." Eventually, Wilson fired the man, an experience he describes as "the most distasteful I've ever had in business and one I never want to repeat."
Then, to make matters even worse, the big promotion, the one bright spot in the gathering gloom, guttered and fizzled and went out. That news was especially hard because Wilson had already hired 12 new employees for the production line. But through a combination of Pioneer's scheduling oversights and Honda's inventory controls, the company could not get the engines it needed to satisfy the demand for the discounted buffing machines. Once Pioneer had even diverted a Japanese cargo ship in mid-ocean so it would arrive at Los Angeles rather than wait for it to dock at Norfolk, Va., the usual port of entry. In Los Angeles, an idling tractor-trailer was waiting with two drivers who sped the engines to Sparta in only two and a half days. Still, it was too little, too late, and Wilson was ultimately left with a large increase in payroll expense and no work to offset it.
On and on it went; the litany of woe seemed endless and Wilson and his colleagues were now afraid, afraid that the company itself might fail. And then the crisis broke, marked by a meeting between Wilson and his distributors.
In late October, during the annual convention of the International Sanitary Supply Association, in Houston, Wilson sat down with some 15 distributors to review the company's predicament. While by then he was well aware of many of the specific complaints, others were less familiar, including charges that his sales force was often poorly trained and that the company's customer service stank. "Basically," says Daniel Merkel, president of Prinova Co., a Pioneer distributor based in San Francisco, "we were trying to get him to see that he was putting all this stuff on the drawing boards when there were still fundamentals he wasn't doing well." At one point, Wilson even heard himself described as a "growth junkie" who was "way out ahead of his company." The discussion was painfully frank and it was perhaps for this reason that Wilson was able to break through to a new point of view. "No one had a specific solution," says Wilson, "but they helped me see the trees and the forest. That's when the light bulb turned on, when I realized what we were doing wrong. We had lost our focus, our identity, and our sense of direction." More than anything else, Wilson saw the company's foray into hand dryers as a perfect example of the company's meandering ambitions. "I ask you," he says, "what were we doing in hand dryers? We were a market-niche-driven company, and our success was in that niche, and that niche was floor care. It's successitis that makes you do those kinds of things."
In December, Wilson invited 15 of his managers to lunch at the High Meadows, a local motel-restaurant complex. He stood in front of the group and confessed himself. "I told the I'd been on an ego trip," he says, "that I hadn't been myself. I took full blame." Then Wilson went on to outline a program of recovery. He called it "Back to Basics." He said the company had lost its way, but that this would get it back on track so they could all "concentrate on getting the company profitable again, on making it a sane place to work." In the days that followed, the company stopped promoting new products, discontinued foreign advertising, abandoned hand dryers altogether, laid off 18 employees, most of whom had been hired for the doomed buffing-machine promotion, and completely revamped the accounting system. In addition, Wilson installed a new management structure meant to close the communication gap and keep him from trying to run the company by himself. He established four committees -- sales, operations, finance and accounting, and executive. In this scheme, the three functional committees would meet monthly to review the overall condition of the company. If the committees could not reach consensus on a particular issue, it would be referred to the three-member executive committee. If the executive committee was also stumped, they would call in Wilson himself. Otherwise, the committee model would run the company while Wilson spent his time pondering broad questions of corporate policy and strategy.
