At this blog, we have always tried to moderate and conservative in our claims. We have never stated that TBI will go bust on such and such a date; we do not want to indulge in speculation, and there’s no way that anyone outside Head Office can know exactly how bad the finances are. However, there is no longer any doubt that they are on the way down fast. Over the past two years, the evidence has become ever more dramatic.
In 2015 the company threw out its hapless former director, the much-despised Mariam Kartikatresni. This was a clear sign that there was no longer enough room for two ‘Ibu-Ibu’ at the top of the food chain. Then in 2016 they were forced to close down not only their own Head Office in the Sequis Centre but also TBI Sudirman. It was very clear that this company was going downhill fast. That they are ‘moving’ TBI Kuningan, their former flagship school in Jakarta, is another sign that their fortunes are deteriorating rapidly; they are now going to have to slum it in a smaller and less prestigious premises. However, exactly when this ‘business’ hits rock-bottom is still anyone’s guess.
Weak as they are, and as much as the loss of TBI Sudirman must hurt, they still own a chain of schools. At least in the medium term, it is is very likely that TBI (The Bozo Institute) will be the clown-show that keeps on giving laughs. However, over the long term, there are now serious reasons to doubt their viability. In a series of three posts, I will offer the thesis that this company has now crossed some kind of threshold, and it is now gone from exhibiting early to late signs of business failure. In our view, this is a company in a state of terminal decline. Making reference to the literature on the topic, we will run a three-part series arguing that this company is now entering the later phase of business failure. It may hang on for several years more, but from now on the momentum will be downwards.
In the first part, we look at the early signs of business failure, and argue that TBI has been exhibiting them for many years.
EARLY SIGNS OF BUSINESS FAILURE
It is not clear exactly when TBI entered the early phase of business failure, but we would argue it was around 2009 when Ashley Platts, Mariam Kartikatresni and Luke Preece started spreading their tentacles around every major position in the company. It is probably true that TBI was already losing market share before that, but after this clueless troika extended their control, the situation become much more dire. If you read business articles about the early signs of business failure, it was around this time that they started ticking a lot of boxes. It will not be necessary to examine all of them in detail. I will just raise a couple of the more serious ones to make my point.
We really liked Point 5 on this list: “The business is complacent and hasn’t made a change in months“.
Wow, that point really hits home. From 2005-2008, there were still changes being made. The company expanded its network of (mostly terrible) franchise schools out to places such as Bekasi, Depok and Semarang. True enough, some of these schools went bankrupt and others became infamous for ill treatment of teachers. Yet opening schools amounted to a change of sorts. By 2009, the franchise schools had fared so poorly that the expansion program was called to a halt, and since 2010, TBI franchise expansion has been dead in the water. Since 2010, very little has changed for this company in general. The same old incompetent managers such as Eny, Scott Martin and Luke Preece were being shuffled around between various schools with falling student numbers. No new blood. No new ideas. Photos on their website reveal the same streaky, old whiteboards and dated course-books which they were using in 2009. The company had become moribund.
We also really liked Point 6 on the list: “You have a high employee turnover rate.”
Within several months of us leaving TBI in 2012, there was not one familiar face at Jalan Riau or Jalan Kuningan. Every teacher or manager with a lick of sense got out as soon as they could. As one of our informants at Jalan Riau (Bandung) told us: “The most popular topic of conversation among Native Speaker teachers is how many months before we can leave.”
In 2013 we heard from a teacher at TBI Bekasi who was the first ever Native Speaker to complete a one-year contract at TBI Bekasi. The school had opened in 2008. It took 5 years before a single teacher completed a contract at that school. When people talk about a high employee turnover rate, they aren’t thinking of TBI levels. TBI has turned high employee turnover into a kind of art-form. Their skills at alienating people with their bullying and unprofessionalism have to be seen to be believed.
In other words, TBI was already showing early signs of business failure 6 years ago. They were a chronically under-performing business which was delusional about their own prospects. Instead of addressing the problems, they victimized anyone who dared to question them, driving them out of the company and calling it a victory. Yet bad as they have long been, they were still faring better then than they are now. In the next part, we will look at the transition to the later stage of business failure.