You can’t do any good when you’re dead

Though the title of this post is true for individuals, its applicability to companies is what I’m going to focus on today. Yesterday brought the news that American Apparel is in dire financial straights and may have to declare bankruptcy. This news caught me off-guard, though I don’t follow the company closely. However, I was under the impression that they were growing like crazy and had strong financials. I don’t care much for their style of clothing, but I admire some things about the company. They have a staunch belief in making all their clothes in the US, and paying their companies a “living wage”. My agreement with their beliefs aside, it’s so refreshing to see companies that actually have beliefs that I’m inclined to admire them when I see them.

For American Apparel, while I admire their quixotic approach to business, this latest turn of events has reminded me that the road to hell is paved with bad intentions. You can set out to do the right thing for everyone involved, but without a dose of reality, you’re likely to only make things worse. Is it really going to be better for all those thousands of American Apparel employees who were making a “living wage” to be unemployed? I’m not trying to make the point that you shouldn’t take care of your employees. You absolutely should. But you also have a responsibility to keep the business solvent, because a business going under ultimately does a lot of harm to the employees and other stakeholders.

In spite of the news yesterday, I remain something of an idealist myself, and look forward to creating businesses that create long-term sustainable value for their customers, employees, and investors.