They Don’t Know Beans About Business

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The recent terrible news coming out of Kraft Heinz — profits down, business unit values being drastically written down, a possible SEC investigation into bookkeeping practices — confirms something that many people (myself very much included) thought all along: you can’t cut your way to a successful business. 3G Capital, the Brazilian based private equity firm that controls this food conglomerate has made a giant mess of things by focusing entirely on cost-cutting and not at all on product development, innovation and marketing.

But in all the press reports about the disaster, one observation has been missing: 3G has also made life miserable for the employees of the company, who are treated like business slaves and forced to focus on saving paper clips rather than more worthwhile aspects of their job. We’ve seen from so many companies that unhappy workers produce a bad company.

And shame on Warren Buffett for being part of this. Buffett does a lot of good things but his condoning of this business strategy is despicable and against everything he says he believes in. I’m so disappointed in his behavior in this matter…and he should be too.

This goes beyond Stupidity….it’s just plain wrong.

2 comments

  1. It seems warren is losing his touch. I still do not understand why with all the cash on hand he refuses to pay dividends. It’s great that the stock doubled but now what?

    Like

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