Nowadays, not all businesses succeed and often have to close their doors because there is simply a lack of positive results. Everyone has no choice but to move on to the next best thing and we neglect to give much thought as to how the business reached its breaking point and what could have prevented it.
There is one key thing that we all preach is the backbone of our business: people. In the past, while consulting on turnaround initiatives, I have witnessed that the majority of failed businesses have fostered sub-optimal executives for far too long. It’s quite simple: If your business is failing and you are confident that your business model should correlate positive results, then perhaps it is time you start to evaluate your human capital, specifically your senior executive team.
In my experience, there are eight major signs you can look out for to uncover if you do not have a suitable team running your business.
1. Too many meetings. When your management team continues to have meetings after meetings they are opening the door for employees to form bad habits that induce inefficiencies. Meetings become too long when there is a lack of solid leadership; no one wants to be held accountable for a decision and thus the conversations go on forever. These types of meetings are extremely unproductive. Ask yourself, while your management team is meeting about a meeting: Who is running and looking after the business?
2. Lack of ownership. When you witness a member of your management team not taking the initiative to perform a crucial task, because it’s not “their responsibility,” it’s an indication that they are not holding themselves liable to the success of your company. Managers need to work as a team and hold the timeliness and the value of a certain goal or outcome to its utmost magnitude so their business never suffers consequences. You want to maintain managers who treat your money and business as their money and business.
3. All plan, no action. If you are signing off on project plans that seem to have similar content continuously rolling over, there is a weakness in your management team, and it is called lack of execution. This clearly indicates that your managers are not following through with actions and most importantly not monitoring progress. Managers who lack a sense of urgency to adequately run your business usually inflate the cash burn rate.
4. Losing ground in key areas. When your profits start to deteriorate and you start to generate negative results, it’s a clear sign that key processes have been broken. Your management team has failed to endorse a detailed understanding of the workflows that directly impact the financial performance within your company.
5. Too many excuses but no solutions pitched. If you task your management team to turnaround the business and they constantly pitch excuses and not solutions, be concerned. It is evident they are not your turnaround team.
6. Good employees start to leave. When your best players are leaving your organization, they might have been demoralized by the lack of leadership and actions driven by your management team. It’s time to take action and start having one-on-ones with your entry-level staff members.
7. Lack of SOPs (standard operating procedures). There is nothing more precarious than having a lack of documented standard operating procedures. If everyone is working a process in their own unique way, it’s a recipe for disaster, as you won’t have a dependable checks-and-balances process that would monitor the accuracy and performance of business practices.
8. Lack of employee training and development. When employees are desperate for knowledge and your management team opposes or neglects to offer training and development, your management team has failed to invest in its core asset: your people.
Don’t be afraid of a restructure as this will ultimately demonstrate to your employees that you care and are paying attention to your business. It is often in situations like this, where entry-level staff feel abandoned because business owners continue to leave sub-optimal leaders in place.
It’s important for shareholders to constantly evaluate their C-suite members to ensure the objectives of the organization are being met and that profitability is not being deteriorated due to suboptimal behavior. If you can root out these issues in a timely manner the organization won’t suffer holistically. Often, changing management positions helps drive growth and innovation within the business as well as success from different angles.
We fail to make key decisions on our leader representation because we fear a void, an empty seat, per se. However, what is a sub-optimal executive bringing to the table now that you will miss?