The Denver Post | BUSINESS
January 15, 2017, at 12:49 am
Over the holidays, I spent some time reflecting on both good and bad management practices among clients that I served last year. As I thought about management practices in general, I couldn’t help returning to one company that had engaged our firm to review its operations.
During the review, we found that our client had experienced very poor operating results in 2015, and 2016 was projected to be even worse. With missed revenue targets, negative earnings, high employee turnover, a lawsuit and demoralized shareholders, the company was close to imploding. One management practice stood out like a sore thumb: The company president was a bully. He suffered from what I call the “smartest guy in the room” syndrome.
For example, at a company customer review meeting, the president, in an accusatory tone, asked each account representative why he or she was not generating more sales. When the representatives explained their reasons and offered recommendations for closing more sales, the president dismissed their answers, calling them nonsense or unreasonable. He embarrassed the representatives with caustic remarks in front of their peers.
Staff members’ ideas were never good enough to be considered, much less implemented. He chastised employees for not being more aggressive about making their quotas. He appeared to be competing with them by boasting that he always met his sales quotas and never had any of the problems they described.
During our operations review, we interviewed a number of managers and employees. The president’s management practices were described as “abrasive,” “abusive,” “arrogant” and “condescending.” Many employees said they had put their resumes “out on the street” and were seeking other opportunities.
Bullying in the workplace usually starts at the top. In this case, other company officers tolerated the president’s management style. Bullying puts all employees, not just those who are being bullied directly, into a state of fear. As a result, it’s extremely difficult to be positive, creative or productive. Bullying is one of the most demotivating, demoralizing and debilitating of all management practices. It’s the quickest way to lose your most talented people and develop a reputation in the marketplace for having a ”poor work environment.”
After spending a good deal of time at the company’s offices, we also observed other poor management practices. Rarely did senior management treat employees as individuals or offer simple courtesies. Greeting staff members in the morning, asking about families and complimenting employees when they accomplish major tasks are easy interpersonal skills that help bond employees to their companies. It’s debilitating to employees to feel unappreciated – particularly when they believe they’ve done a particularly good job on a project or solved major problems for the company.
In our review, we also observed poor communication to employees and disorganization and indecision among management. Employees did not trust senior management. When it came to corporate values, management did not “walk the talk.”
It’s demoralizing for staff to see senior management spouting the rhetoric of corporate values but not practicing those values. Senior managers who fail to model appropriate behavior in the workplace or in their personal lives send a message of shallowness and phoniness.
When we provided our findings to the company’s board of directors, we recommended that the president be terminated. The culture of the company and its operations issues were beyond repair if he continued to lead the company. After discussing the report’s findings, the board asked us to provide details about what the new president will have to do to save the company.
The new president will face daunting morale challenges beyond the operations issues. The new president will have to:
- Build a new foundation – a core team that shares the company’s vision to drive accomplishment. Choosing the right person for each role will be critical so no one is saddled with constantly having to perform tasks that are not part of the employee’s responsibility. That can cause resentment.
- Forego coaching weaknesses and focus on leveraging strengths and passions of the new team.
- Manage without ego. Select a senior management team that can admit when operating systems are failing and be willing to change to improve. A feeling that “we are all in this together” must permeate the organization and is critical to inspiring motivation.
4 Select senior management that will own the operating systems from start to finish. Managers should be obsessed with the details, the metrics, and the numbers.
- Compliment staff members when they hit their goals. If goals are missed, work with each member to examine what he or she could have done better.
- Solicit genuine feedback from both management and staff. The president’s team members must be vocal and active participants in the company’s operations to eliminate inefficiencies and make improvements as the business grows.
- Set management and staff expectations. Accountability and responsibility are two of the most effective management practices any business can employ. Regular meetings – every week or two — will demonstrate management’s commitment to the goals, the operating priorities and the focus on people and processes.
A few weeks later, the board terminated the president, and the search for a new president is underway.
Gary Miller is the CEO of GEM Strategy Management, Inc., an M&A consulting firm, advising middle-market private business owners prepare to raise capital, sell their businesses or buy companies. He is a sought-after business consultant and speaker on M&A issues, strategic business planning, business valuations, exit planning, what buyers are looking for in acquisitions and how to prepare for due diligence. He can be reached at 970-390-4441 or email@example.com.