Chapter 71: Strategic Decisions

October 8, 1988, Chicago, Illinois

It was nearly 3:30pm before I saw Stephanie. My ROTC students had left, and Kara's study group was just winding down when Stephanie and Jorge came into my study.

"She died about an hour ago," Jorge said, his arm tight around my sister, who had tears on her cheeks. "Her parents will take her home to Brooklyn for a funeral."

I nodded, "Jess warned me that was likely to happen. How's my sister?"

I smiled because Stephanie was standing right there. She gave me a strange look but let her boyfriend answer.

"She's doing OK," he replied, squeezing her tightly to his side. "Melody and the other girls are taking it hard, so Stephanie had me tend to them as well. I did as much as I could."

"Good," I said. "Are you really OK, Squirt?"

"Yeah, I guess. I just need to get some sleep."

"Take her to bed, Jorge," I said.

He grinned, "There aren't many men who would say that to a guy about their sister!"

I smiled, "You take good care of her."

"Thanks," he said, nodding.

Jorge carefully led my sister from the room and I heard them climbing the stairs. I got up to go find Jess, who was in the Indian room with tea and a surgical textbook.

"Do they put all those pictures in those books because surgeons can't read?" I teased.

"I could practice on you, Tiger. What do you say?" she deadpanned.

"No thanks!" I said, but then became serious. "My sister and Jorge just came home. Chrissy died about an hour ago."

Jessica nodded, "It was pretty much a sure thing. Your body can only take so much abuse, and the combination of drugs she took is about as abusive as you can get. Maybe methamphetamine is worse, but it's not all that common here, because mostly it's made in Mexico or California. Or you have to have access to prescription drugs. Cocaine and heroin are pretty easy to obtain on the street here in Chicago."

"Pretty easy?" I asked.

"Take your nice new BMW to Cabrini-Green, cruise around for a bit looking for a guy standing in a doorway. Stop, wait, and he'll be happy to take your order."

"How the heck do you know THAT?" I asked.

"We talk to cops and paramedics all the time," Jessica said. "I asked them about it. How's Stephanie?"

"Upset and tired. Jorge is taking care of her. He's a good guy."

"She's a lot like you in many ways," Jessica said. "Does he know that?"

"He's been around us for about five years now, so he knows. He's a very different man from the young kid who showed up one day. He's developed a special relationship with Jennifer and Josie, and he and Stephie were very close. You saw him at her gravesite."

Jessica nodded, "I did. Do you know if your sister will go out with us tonight?"

"I doubt it," I said. "Just as I doubt Jorge will join the guys. She needs some time to sleep and some time to mourn. I doubt she'll go to the funeral; it's going to be in New York."

"Let's go find Kara," Jessica said.

As I suspected they would, Stephanie and Jorge stayed in, and just before the guys arrived, Jorge came to check that it was OK for the girls to come over. I replied that it was, and he inquired about the sauna. I promised that the guys would stay out and that he and the girls could use it if they wanted to. He thanked me and went back to be with my sister.

Guys' Night went off without a hitch, though I did check in on my sister and her friends. Jorge was taking good care of them, so I didn't worry too much about it. I was a bit surprised when Stephanie asked me if it was OK if Peggy, Lisa, and Cheryl stayed the night, and I agreed it was fine.

October 9, 1988, Chicago, Illinois

When I came home from working with Jolene on Sunday morning, I had lunch, and then decided I wanted a sauna before the race. I hadn't had much time to be in there, so the girls and I went downstairs. We found it already on, and when we went in, we saw Jorge sitting with one arm around my sister, and another around Melody, who was cuddled tight to him. Cheryl and Lisa were sitting close, but on the next bench lower, in front of them. Jorge looked at me, then indicated the two girls with his eyes and gave a slight shrug, as if to say they weren't in the best shape emotionally.

"How are you guys doing?" I asked as Kara, Jessica, and I took spots a bit away from the others.

"Hanging in there," Lisa said. "Melody and your sister were pretty broken up, but Jorge's done a good job of comforting them and helping us get through."

"Are you losing your place, Snuggle Bear?" Kara teased in a gentle voice.

"Voluntarily, in this case," I said.

"So you're starting a harem, Jorge?" Jessica smirked.

"Hey, I'm just following Steve's lead!" as he waggled his eyebrows a la Groucho Marx. But then his face grew serious, "The good rubs off. If the girls need to be held, I can do that for them."

"Sometimes, a hug is the best medicine," Jessica replied with a smile.

"Mine are free and available at all hours of the day and night," Jorge said with a grin. "And if I run low, there are some wonderful kids around here who give great hugs to replenish them!"

"You should count yourself lucky," I said. "Jesse doesn't hug just anyone!"

"If they're male!" Kara laughed.

"Oh so true!" I agreed.

Later on, Kara, Jessica, and I watched the race from Charlotte, North Carolina. Alan Kulwicki started on the pole, with Bill Elliott next to him. Bill had the better start and led the first three laps until he was passed by Geoff Bodine. Bill would only hold the lead one more time, and only for a single lap, but he stayed with the leaders through a caution-filled race that saw Kulwicki crash out on lap 193. The lead changed multiple times, with multiple drivers leading, but nobody was able to dominate. In the end, Rusty Wallace won the race, with Darrell Waltrip, Brett Bodine, and Bill finishing behind him. Earnhardt, despite leading the most laps, ended up four laps down in 17th.

"I can't complain too much," I said. "Wallace only gained 15 points on Bill and Earnhardt lost 43. That gives Bill a lead of 109 points with four races to go. Next week is North Wilkesboro, and if Bill can manage a top-ten, he'll be set because that's the last short track!"

"And you were so down earlier in the season, Snuggle Bear. He's going to do it."

I nodded, "I'd say he's going to keep the promise he made."

October 10, 1988, Chicago, Illinois

"Cindi has a revised plan she wants to talk to us about," Elyse said from the door to my office.

"Now?" I asked.

"Yes, is there a problem?"

"I have to eat lunch, and then get down to IIT to sit in on Scott's class. Can we finish in fifteen minutes?"

"Maybe. Why don't we try? I can have Kimmy order you a sandwich, which would give you more time."

"Sure. Let's do that. I'll be there in two minutes."

I made some final changes to a proposal I was working on for another PRIME to IBM RT conversion, then went to the conference room.

"Let's hear your new pitch," I said with a friendly smile.

"Sorry about last time," Cindi said. "I really should have thought it through and should have listened to Elyse. I think you'll like this better. We hire a new on-site support person to be based in Los Angeles, and we announce that next year we'll open an office in Pittsburgh or Nashville. That gives Cynthia time to increase the number of customers we have in the Western Region, and the support to do it right. Mario and I will focus on the Eastern region and try to build our customer base there, with the goal of Mario opening the office as soon as we have the revenue to support it. When the time comes, we can ask Zeke or Ralph to move. If neither of them will, then we'll have to wait until we have enough revenue in the Eastern Region to support hiring there."

"That sounds reasonable," I said. "Elyse?"

"Cindi has a bit more," Elyse said.

"The way I'm going to do this is by region. When a region can support a new staff member, or an office, then we'll make that request. The one exception is the on-site support person in California. We can afford it from the standpoint of all the time we gain from one of the Chicago guys flying out west. Not to mention the support visits we don't charge for because they're covered by the maintenance contracts. That one will pay for itself in savings, rather than revenue."

"That is a much more sensible plan," I said. "But what if we can't open an Eastern Region office?"

"First of all, we have all of next year. Second, if conditions change, they change. It might cost us a bit in PR, but in the long run, it'll be fine."

"Lastly, is Pittsburgh the right place?" I asked. "I mean, I'd love to have an excuse to go there during hockey season, but isn't that at the far edge of the territory?"

"It's a place Mario would want to live, and it's relatively inexpensive as far as cities with good airports go. Nashville is further from New York and New England. How about we just say 'Eastern Region' and leave it at that and see where we end up?"

Kimmy came in with my lunch, and I apologized for having to eat while we talked.

I swallowed my first bite of my sandwich, then spoke.

"I agree with the basic strategy of managing the regions by the revenue they generate, though I would say that you should keep a close eye on where you draw the lines so that they make sense from a travel perspective. That's one of our major costs right now, and reducing it without hurting our services levels should be one of our goals."

"So you DO read my reports!" Elyse smirked.

"And when those reports justify opening an office in the Eastern Region, I'll agree to that," I said. "Cindi, what about the rest of the concerns you raised?"

"I have the endorsements and we'll get a marketing piece out. We're talking to all our clients, but that's been the case since the last time they pulled something like this. We've had a few customers say that they're evaluating what BLS has to offer, but nobody has jumped ship yet. We might lose a few, but we're also actively going after their clients as well. For any firm that converts, I want to waive the installation fees. Not the travel cost or expenses, just the install fee."

"I don't like that idea," I said. "It sets a bad precedent. If word gets out, nobody will want to pay the installation charges. Even if you say that you're going to limit it to competitive upgrades, word WILL get out. We can't afford to waive the install fees for every client. If you want to eliminate installation charges, then we'd have to raise our prices or increase maintenance fees. But whatever you do, it has to be what Elyse calls 'revenue neutral'."

"How do we entice people to switch?" Cindi said.

"By having a better product and better support," I said. "Being honest, truthful, and trustworthy, and taking care of our customers. We can only do that if we charge enough to actually do it! That's our strategy and always has been. We're going to sink or swim based on that strategy. It's still my company, and I set the direction. If you don't think you can do it, then you have a decision to make."

"Steve?" Julia said.

"I'm serious, Julia. That's the policy. Period. Take it to the Board if you like. I think you'll lose. Doctor Lambert will probably support you. Karl might, but I don't think so. The other three will back me up. This isn't an operational issue, it's a strategic issue, and it's my company. You can disagree with me; you can argue with me; but when I decide strategy, that's what we do. If you disagree at that point, bring it to me privately. But the public discussion is done. I pay you to implement it, so implement it."

"You heard the man," Julia said. "Would you all leave us, please?"

Everyone filed out of the room and Elyse, the last one to leave, shut the door behind her.

"What happened?" Julia asked.

"Nothing! What have I preached since day one? The company will rise or fall based on our reputation. If doing the right thing means we can't stay in business, then so be it. Who and what are we if we decide that money is more important than doing the right thing by our customers?"

"Sorry, I didn't mean that. I was talking about how strong you came on. That's not usually your style."

"No, but I need to adapt my style to the situation. Cindi has been trying to run roughshod over me for the past year, and I can't allow that to continue. I think she's the perfect person for the job, and she's helped make us a LOT of money. But I honestly believe that NIKA should be an honest, ethical company that provides the best service possible to meet the needs of its customers. You've seen how I take care of my employees? That's how I want to take care of my customers. If we can't win based on that, then I'd rather lose.

"Let's say we cut our prices below cost to get deals from BLS. Where does that end? What if BLS lowers their price again? Eventually, something has to give. Who do we lay off? Sales people? Programmers? Telephone and on-site support? Admin? It's not like there's any dead wood here! Maybe we could end our internship programs without harming customers or NIKA. But ask yourself, is that the kind of company you want to work for? Where all that matters is volume? Where making the sale is all that matters? Where employees are treated just as numbers to be cast off if it makes the company profitable? I know I sure don't!

"I learned from Joyce's grandfather that business and friendship go together. You do business with your friends and you make friends with the people with whom you do business. You give your word and you keep it. And it only works if both sides benefit. He was known as a kind and generous man, and a man of his word to everyone, including his competitors. He was a ruthless businessman who did his best to make as much money as possible, but he always kept his word. And he always made money for his partners."

I was referring to the legitimate businesses that Joyce had taken on. But even on the 'other side' of his business, I'd never once witnessed him being dishonest or failing to keep his word. Sometimes keeping his word meant enforcing the agreements at the point of a gun, though that was actually pretty rare for him. His customers were more likely to face guns drawn by the FBI or local police than by one of Don Joseph's men. The Chicago Outfit was a different story.

I continued, "If our prices are too high, then we need to find a way to reduce them without harming our customers OR our staff. One way to do that, which I didn't hear from Cindi, would be to reduce commissions and raise salaries a bit to compensate. But we use the commissions to motivate the sales team. And it works, according to both Elyse and Cindi. We could try to reduce our expenses in other areas, but salaries are our biggest expense by far. The mortgage is a big one, but we need space for all these people, and owning the building allows us to build equity and profit from the increase in property values.

"There is no possible way we can reduce staff, and you know that. Dave has more work than we can do as it is, and that means hiring. We go slowly in that area for a reason — we don't want to have to let anyone go because we don't have work for them. Every single person who works here is involved in generating revenue in some way, including Kimmy! Every single person contributes to the bottom line. If you think about it, Kimmy is really the only administrative staff we have! And look at what she does — she's basically the office manager and the receptionist and still finds time to do work for Elyse."