Wednesday 18 August 2010

7 Symptoms of Sick Businesses

Here is my list. You may have your own factors to add to my 7.

  1. Blame
  2. Meetings
  3. Politics
  4. Sloth
  5. Arrogance
  6. Macho Planning
  7. Deck Chair Syndrome

I am often asked if I would go back into employment. I could probably earn a great deal more money than I do at present, so why not leave independence behind and return to the corporate fold? My answer is the same as most of the strong minded independent business owners I meet. There would have to be something special about a business to attract me back into a world that I left behind 4 years ago.

Seven of the things I do not miss about large businesses are symptoms of a sick business - things that the very best businesses aim to eliminate.

Blame
A lot of people talk about eliminating a blame culture - few actually achieve it. The response to a problem is more often "whose fault is it" than "how can we help". One of the jokes often cracked by experienced project managers is that old chestnut:

"No project team is complete until we have appointed the PTB - (person to blame)"

When things go wrong, how often do you start asking questions that are aimed at isolating a blame recipient? And how often do you defuse things by making it your own fault then working on the recovery plan in support of the team/ supplier/ customer as appropriate?

Meetings
Internal meetings will continue to be run in this way until morale improves. Effective Meetings - Not. Are your meetings painful, unstructured, rambling affairs where you tell everybody how it is - building momentum as you go so that all the debate is a pointless charade and the decisions all get made in a blinkered way?

One of the dangers of the meeting culture is that, instead of canvassing opinions and capturing the best ideas, a "pack mentality" emerges where everybody jumps to the same conclusion without pausing to review data or to check facts. If your business is regularly sorting out the impact of the unintended consequences of poor decision making then you would be wise to seek help with making your meetings more effective.

Too Many Meetings
If you have created a culture where middle and senior managers are spending more than half their time in internal meetings - you may have a problem. If these same people are spending a further 20% of their time preparing reports for these internal meetings you have a big problem - especially if these reports all contain similar information re-formatted for different audiences. 50% + 20% = 70% - leaving 30% free to drive the business forwards. I am not saying that your meetings are not driving the business forwards some of the time, but your external facing senior people should be spending more time with customers. At the levels I am conjecturing, you are paying for 10 people to get 3 working with customers. Hardly efficient!

Politics
Some form of internal politics is inevitable in any organisation - humans work on relationships and success in any large organisation is a function of your power-base, aptitude and effectiveness. As leaders in an organisation, you have a duty to ensure that you are promoting and supporting your best people - those who are most able and who are most effective. If you fall into the trap of only promoting those with the widest power base or best grasp of internal politics you run the risk of creating a culture of mediocrity. You run the risk of losing your best people as they become disenchanted and move on.

Furthermore, your senior management team is not always going to be the people who are best able to support or develop the business strategy. As a leader, you are most effective when your support team is effective - not populated with people who agree with most of your ideas.

Sloth
Indolence and sloth are the results of the slow decision making and lack of drive that, in turn, arise from a lack of alignment in the business. By alignment, I mean that the objective setting and performance management systems in the business are not aligned to the strategy and possibly not aligned to delivery of the short term change programme.

Arrogance
Routine benchmarking and the proactive seeking of external inputs are marks of great businesses. Sick businesses, or even the slightly poorly, are guilty of :

  • Assuming their business is totally unique and incapable of benefiting from any external input;
  • Not-Invented-Here-Syndrome - unless they created it, it must be sub-optimum.

Unless you establish business processes to benchmark competitors, to actively seek best practice and to measure and capture customer feedback, your business is guilty of a supreme arrogance. Over time, that arrogance will allow you to fail to plan or to develop an adequate strategy. These failures will damage the business performance - possibly not in the short term but performance will be damaged.

Macho Planning
Is the biggest danger to your business the white-board or flip-chart used in your planning meeting? Stretch targets can be motivating - as long as they result in substantial action plans. Unrealistic plans run the risk of leaving you with a demotivated team. Worse still, your shareholders and other stakeholders will lose faith if you consistently miss your targets. Realistic plans - which should be stretching - should be based on:

  • Facts and data;
  • Buy-in throughout the business;
  • Alignment of goals and objectives;
  • Balanced measures;
  • You creating an environment which facilitates execution of the plan.

So, if you are tempted to "just add another 20%" on to a target without any realistic assessment or change programme. Think in terms of the market, the power of your proposition and of your business' ability to deliver - do be careful!

Deck Chair Syndrome
The corporate mantra surrounding many re-structuring projects is "Re-arranging the deck chairs on the Titanic". You may not be guilty of anything quite so dramatic, but if your business is resorting to re-organising reporting structures on a regular basis, you could be ignoring the root causes of the issues you are trying to resolve. As a rule of thumb, and assuming that there are no disasters or major people changes inflicted on you, any re-organisation which is not part of your strategic plan should be questioned. Just as major changes in strategy on a regular basis are themselves symptoms of problems, your organisation structure should be matched to the strategy. A military leader will deploy forces in line with the tactics derived from the strategy. Refinements will be made in response to the changing situation but major changes in resource deployment or strategy are usually indicators that there have been mistakes in the original strategy.

Summary
How many of these symptoms can you identify in your business? Your suppliers? If you can identify 2 or more of these symptoms, it is worth starting an improvement plan - but beware creating yet another initiative that prompts more meetings and more poor behaviour! Good luck.