Re: What do you mean by 'utterly naive'?
I ran a company years ago whose primary market was dying. What we should have done is made most of our staff redundant and changed the focus of the business to the bits which were making money (email systems and browser based software development).
Instead, we (the directors) took pay cuts and kept the staff on hoping against hope we could revive the loss making core business. This was the wrong thing to do. Our staff were talented and when we did eventually have to let them go they all very quickly found great jobs on better pay. It would have been much better for everyone involved, staff, management and shareholders to make the redundnancies early instead of hanging on. That's a lesson I never forgot.
There is an assumption that anybody who runs a business is a ruthless psychpath who treats people like meat. In the vast majority of cases the exact opposite is true, and it was because of our loyalty to our staff that we eventually had to wind the company up. As I say, it's a lesson I learned the hard way.