We had three floors in an old industrial building in Kowloon, Hong Kong. One floor was for design, development, operations and support (myself included). The floor below housed our prototype manufacturing line, so we could make a few phones to iron out the wrinkles before sending the product for mass manufacture. The floor below that nobody really talked about.
I was looking to save some money and thought we could get by with less space, so I asked what the third floor was used for. “Storage”, I was told. But to the best of my knowledge, we didn’t store anything – we manufactured to order, so everything got shipped to customers.
I smelled a rat.
Gordon and I went down to the store, and so it was. Racks and racks of boxes. We opened a few and they contained phones I didn’t recognise. These were old phones. Very old. Well past their warranty period.
It turns out that when we got a customer order, we’d make a extra hundred or so and put them in stock in case the customer wanted more or they were needed for exchange. And they sat there for years, gathering dust. Some of them had been there for more than a decade. And by now they were unsellable - actually a liability. As if to add further insult to injury, these useless museum pieces were sitting on the financial balance sheet as stock, as if we could turn them into money! It would have been better to give them to the customer and ask them to pay us if they were sold.
At our next management meeting I gave the team a 'museum' phone each, a visor, a pair of gloves and a hammer. It was before the days of high-visibility jackets! And we had a happy 15 minutes smashing these phones to bits.
We gave the remaining working phones to various charities around Hong Kong and got a bit of publicity. We also took them off the balance sheet, which made it look a bit sick. But we got rid of the third floor and saved money.
Three lessons:
Don’t hold onto stuff that’s useless – get rid of it. Be ruthless.
Don’t pretend that useless stuff is an asset and has a value. Purge the crap and get as close to the truth as you can.
Don't take what people say at face value. Keep digging until you hit bedrock.
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