Loading ...

As an avid reader of the Harvard Business Review, one of my favorite sections in the magazine is the case study.  Each case study is about a “fake” company, it’s leaders and a difficult situation that the company and CEO must deal with. After the CEO makes his decision how to deal with the situation, real experts weigh in on what decision they would have made.

MBA programs use case studies as an excellent way of teaching and they use real companies. Alex & Emilio (A&E) salon based in Royal Oak, MI could be such a study. Their story is a good one where two hairdressers come together and decide to open their own salon.

Case studies are never about success as much as they are about how to deal with unexpected disasters or situations that can create long-term problems if not dealt with correctly. A&E opened in the heart of downtown Royal Oak, drew a great crowd, expanded and hired more hairdressers. A&E was and will always be about hair; forget about going there for a massage or bikini wax.

Like most businesses, everything was going great until late 2008. Then the economy plunged and the rest is history. But what this case study is about is not only did A&E have to deal with the economy, they had to deal with their top talent defecting to another salon without notice.

In the salon industry, this is a common issue. But until it happens to you, one doesn’t pay much attention to it. Ironically, the same thing happened to another salon in Royal Oak and that salon didn’t make it (but there was a semi-sweet ending). And this is exactly what was on the minds of A&E: survival.

They had to make difficult decisions on how to move the business forward. Their rent was high, their lease was long and they were committed to their staff. In the end, it was their heart and soul that got them through. They persevered and made many right choices.

Then something happened that usually happens to good people. The main talent that defected came back. Other top talent that went to work for the competing salon (that never worked for A&E) left and joined A&E. And more talent joined through word of mouth. The results: business is better than ever.

The best part of this case study is that A&E are the same people today as they were during their crisis. Sure they have a bigger smile on their face but what made them successful in the beginning is what made them endure and reach this new point in their business life. And for those that take the plunge in owning a business, this is one case study that makes it worth it.

Happy Tuesday!