Killing the Goose that Laid the Golden Egg-A Modern Business Fable

Everyone knows the story about the Goose that laid the golden eggs. It’s a story about greed and how greed overcomes common sense, and how the goose gets cooked, and everyone ends up losing and hungry.

The same exact kind of thing, sort of, happens in the corporate world. I know this might seem hard to believe, but it happens every day. It happens especially in the contracting business, where the drive to produce more with less while maintaining high quality service levels is the driving force behind contract renewals.

A company makes a bid on a contract and manages to win it. Over the next few years, it works its way into becoming a leading contractor at the company. Everything is just perfect. The contract holder is happy, the contractor is happy, and the contract employees are happy.

For a decade, the company gets used to asking for things and receiving them with no questions. The flexibility and the willingness to provide virtually any service to the company becomes one of the unwritten dynamic forces in the contract.

As a result, the contract company expands. They add a new piece here and a new piece there at the customer’s request. All along the way, the relationship between customer and contractor becomes nearly seamless. A new emergency arises, no problem says the contractor, let us handle that for you.

Then of a sudden the cost of that contract gets noticed by the company’s management team. They start to wonder why they are paying this contracting company so much to provide these services, and it seems like we should be getting a better deal. So a new contract is sought.

Under the new contract, the customer sets constraints on overall cost and clearly defines the work they want performed. The contractor, in order to meet the requirement, has to share the goose with another company that meets some pre-ordained specifics about size and ownership. As a result, the new contract calls for plucking the goose somewhat. We don’t need all these tail feathers, and we don’t want the wings says one person on the contract proposal team. Oh, and we can probably reduce the amount we feed the goose, too, they say.

As the goose slowly deforms from the changes that have allowed it to blossom in the first place, the contractors go about figuring how they can continue to get enough golden eggs to support their program metrics. They begin to look at ways of cutting into their costs in order to improve their profit margin. They start looking at the goose’s legs and think, well we can just get some replacement legs and let those old legs move on. The new legs would be cheaper and would use less food, and we can put that money into our profit margin and that will make the big bosses happy and that will add to our bonuses and the customer will still be getting what he asked for.

But the legs aren’t strong enough to hold up the goose, and it starts to wobble just a little bit. As a result, it can’t get to the food that is being brought in, even though it is less, and the goose starts to thin out. Pretty soon the goose falls into bad health. It can no longer produce the nice shiny gold egg it used to produce daily. Now, instead, it can only produce a golden egg about half the size of the former.

Unhappy with the outcome, the big bosses call for more profit margin. The project managers agree because not meeting the demand has a direct effect on their well-being. They look around at other ways to improve the profit margin. Finally, they realize there is only one way to increase profit margin. Food for the goose has to be reduced. Within days of the reduced diet, the goose starts to show signs of disease. Its feathers fall out, its skin dries up, and it staggers as it tries to produce yet another golden egg. But this time as it strains to push an egg out, there is no egg. It pushes and pushes and pushes. Still no egg. The managers come over and huddle up. How are we going to meet the big bosses demand for more profit, they ask each other.

Finally one of the more brilliant of the bunch decides that if the goose can’t push the egg out, they will just have to go get it. With a flurry, out comes a butcher knife and they slice open the goose. Inside they find blood, guts, meat, bone, and sinew—but alas no golden egg. As they haul the remains of the goose to the recycle bin the managers look around. There is little left of their empire and as they start to realize their dilemma, the big boss hauls them into a conference call: “Have you figured out how to get more profit margin?” the big boss asks.

At first the managers are shocked as they realize there is no more golden goose. Then they start looking at each other knowing that without a goose they don’t need as many managers. Fewer managers means more profit. We can handle this. We can do this. The first knife strikes.
Ahhh, sweet profit, I know you well.