What Is Holding My Organization Back? (Part 2)

This is the second part of a two-part answer to the question “What is Holding My Organization Back?” Last month we began answering the question by discussing constraints on success, common challenges and traps that organizations fall into. This month we continue the discussion of the “wants” versus the “needs” of the organization and how businesses can deal with some potential traps by taking action.

An issue that can arise is the too-rapid growth of compensation and benefits. Company founders are committed to providing quality benefit packages and time off in support of work/life balance. Be sure that you can afford what you promise! High-end benefit packages—insurance, vacations, 401(k) matching, etc.—for a few people may be doable. As you expand your operations and are required to extend the same benefits to everyone you employ, the price tag may just break your business. Recognize that you can phase in benefit programs as your business grows and increases its profitability and cash flow. It is very difficult to take them away.

For most managers and business owners, dealing with underperformers is something that is avoided. For the sake of your business, addressing performance issues has to occur. Underperformers drain your organization’s morale, financial resources, and return on investment. Every dollar you spend on someone who doesn’t do the job well, completely, or at all is a dollar that could be invested in someone or something that moves your organization ahead. Remember underperformance can be contagious, because it saps the motivation of other employees who see the “slacker” getting by and getting paid for not doing the job.

Perhaps a worse challenge than poor performers is situations where you have a valued employee who has performed well historically. He/she is a hard worker, BUT the business has changed and you need a new skill set and experience this person doesn’t have. It may be the organization can’t afford to invest time or training dollars for him/her to “grow” to fill the need or it may be the individual does not want to learn/grow. Organizations tend to justify hanging onto this person. For the good of long-term organizational growth and success, managers need to be able to address the situation. That doesn’t mean walking into the office tomorrow and handing this valued employee a termination notice. It does mean looking around the organization for options. You could move this person to another part of the organization if your organization is large enough. If you have no place for this person to go, then you can develop a transition plan that works for the person and the business. If you value the person so highly you have had a hard time letting them go, then be honest with him/her and, as a team, identify new positions and opportunities outside your business—a client or vendor may need a great person, a friend or colleague may need or know of someone who needs a competent, valued employee—look for options and deal fairly with the person. Current and former employees, clients, and vendors are usually your best (or worst) marketing message!

If your organization isn’t performing at its peak and you aren’t sure why, invest both your time and dollars in identifying the issues. You may be able to look internally and have your leadership team and employees point out the issues. If you opt for this alternative, be open to the good, the bad, and the ugly news. It is important to listen to the feedback; you don’t have to agree or disagree, explain or defend, challenge or accept. You are undertaking a process to gather ideas, information, and perceptions. Take it all in, and then analyze it.

If you opt to bring in an outsider to assist you in the process, commit to finding someone who will communicate honestly, with broad knowledge across many organizations, and seek out someone who has the ability to look across the spectrum of your business operations—accounting, finance, human resources, operations, and so on. Every organization is an integration of people, systems, and functional activities. To get a comprehensive picture of your business requires an understanding of internal operations and external market potential and perception.