Red Flags: Signs That Show You May Need To Improve A Company’s Performance

In this article we look at some telltale signs that show a company may be being mismanaged and what you can do as an employee and fellow manager to help overcome these issues.

What signs show a company is being mismanaged.

Management Paralysis

Inability for management to act is as frustrating as it is as debilitating for a company. This is discussed in an article from Harvard Business Review where it shows management dithering can lead to you constantly changing direction. As an employee or fellow manager, this constant change of direction leaves you unsure of what the actual direction, or next step is for that department, or the company overall. What can be even worse for an employee is completing a task with one set vision in mind, only for it to change. What is just as ineffective as a constantly changing vision? For a business, managers who don’t commit to a decision, or constantly delay. This paralysis can hamper the company’s ability to adapt and deliver future gains.

The Same Mistake, Over and Over

A clear sign that a company is being mismanaged is the same mistakes occurring again and again. This can be as a result of poor process, or of bad man management (training, realigning, following up). Have you worked in a company where a single order results in lots of extra work just to correct these mistakes? If the answer is yes, it is probably due to a process issue. When a single order results in multiple refunds being processed, or redelivery of missing parts, that’s a telltale sign something is wrong. As a leader, there is a balance that we must strike between managing a team, and overall business strategy. When a manager focuses too deep on strategy, over the day to day running of the business, processes can suffer. 

What impact can this poor management have on a business?

From Paralysis to Frustration

Paralysis or indecisiveness of a manager will most certainly lead to frustration within the team. Remember, people go to work wanting to do an excellent job. Given this, there are fewer things more demotivating than delivering a piece of work, only for the direction to change. Unfortunately, one thing that is worse, is not being able to do the work at all. This can happen if the manager, or management team cannot make a decision on the next step. When this happens, the level of frustration can ultimately lead to higher employee turnover. There are very few team members, be it high performers or not, who will stomach such paralysis or changing focus for a long time.

Process Workload or a Compliance Issue?

Whether it’s the process not being fit for purpose, employees not following the process, or simply bad man management, the outcomes are the same. When there is poor process management, it results in a host of follow up actions to correct it. All of these corrective actions have a hidden cost. It is the corrective actions that make a business inefficient, every corrective action has a negative impact on profitability. Furthermore, the process inefficiency will have some serious consequences. Not all processes are customer facing, although where they are the impact could risk future sales. Where a process is compliance driven, it may have serious legal implications.

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What’s the way out? How do we solve these issues?

Identifying the issue is of course the key to resolving them. This is the same whether it is process inefficiencies, or management paralysis. For process issues, these are generally easy to spot, simply due to the corrective actions that are required.

Keeping close to your team and their concerns, creating an open forum to discuss issues will usually highlight mismanagement on a departmental level. Unfortunately, slipping standards from mismanagement that occur over time, may become norms within the business. Correcting the mismanagement will result in less operational costs, improved staff engagement and happiness.

Where paralysis occurs, again you will generally begin to sense a frustration within a team, by keeping close to the team. Ultimately, such paralysis over time will breed a culture of keep doing the same thing, even when the market and business needs to move forward.

What do I do if the business knows about these issues, but doesn’t want to resolve them?

Resolving Management Paralysis

With such an issue, it is important to be able to manage upwards. This is an art form, and something that takes some time to adopt and deliver effectively. Take the time to diplomatically outline the issues affecting you, your team or the wider business. If no one raises the issue, it is very difficult to resolve it. Remember, a management team may, or may not be aware of the issue.

Resolving Process Issues Across Teams

Ultimately, if the mismanagement is affecting your team through corrective actions, you can setup a business process reengineering project. Using the route cause analysis will identify the issue and give viable cause to resolve with the affecting team. Working with the incumbent line manager to resolve this will highlight the mismanagement, allowing them to close that gap. Ensure that the outcomes and metric improvements are highlighted to the wider business. Unless the mismanagement is wholesale, i.e. affects the entire management team, over time, the ineffectiveness will be highlighted and measures to close that gap will be adopted.

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