The 7 signs that your company is in serious trouble.

The 7 signs that your company is in serious trouble.

Published on October 26, 2015
-Tim Miller

Over the last few decades I have had the privilege of seeing and working with some phenomenal companies. As a supplier or customer, you just know when a business is destined for greatness. You feel the passion dripping from every employee on a shared mission to make their company great.

Equally, I can also intuitively know when an organisation is past its sell by date. You sense that no one cares, or if they did once they have long since given up. So what are my 7 signs your business is in trouble.

Number 1 - Good people leave (not good people stay)

Great companies, keep and retain great employees. It seems odd in an age where we are all expected to change jobs frequently, but the good companies just seem to be chock full of talent. Talent without experience or authority to act, can lead to frustration or mistakes. But keeping your best people and empowering them to drive things forward creates a force to be reckoned with.

However, when you see the real leaders and innovators drift away, the rot starts to set in. I know it is controversial to say the “not good people stay” but I am sure you will know what I mean. If you work in a large organisation, try this exercise. Grab a blank piece of paper and write down every rubbish ‘leader’ or manager you can think of. If you are still writing after 3 minutes, then your company has a problem. We have all, also seen, good people give up and often these make the worst of all leaders.

Number 2 - Business re brands or updates its vision statement

A great business might update a logo or 2, but if you are ever called into all employee wide sessions where the “New” vision of the company is rammed down your throat then your business is on the rocks. The culture of an organisation is how it performs every day, day in and day out. Hiring a bunch of consultants and getting HR to tell everyone “We are the Leading provider of goods and services in our industry” doesn’t really help much. Of course a really clever vision or brand will invent an industry where you are the leader. But we don’t see many vison statements that say the following; “Our stock price has taken a beating so we are going through a process of ‘visioneering’ and we aim to be the leading average provider of mediocrity in our industry”. Just be honest, “Our mission is to increase shareholder value so the board are happy”. This leads me on to the next point.

Number 3 - Shareholder value is more important than customer value

I believe that relentlessly driving up customer value will lead to increased shareholder value. But relentlessly driving up shareholder value might not help customers at all. The financial markets are a fickle beast at best, and today’s trophy businesses are tomorrows turkeys. The markets seem to act like a lake full of fish (Piranhas), chuck in a good looking piece of food and everyone wants a piece of it. The current trend is for hardware businesses to buy up highly prized software companies. Sometimes this works when the sum is greater than the parts. But if your business sucks, buying one that doesn’t won’t help you and will just spoil a perfectly good software business. You can’t graft success onto a failure.

Number 4 - Corporate politicians start running the business

Too many business divisions are run by corporate politicians. These people offer no intrinsic value, have swallowed every book on management theory and are only really skilled in covering their backside. The best of these politicians become 11 month managers. Coming in from on high telling everyone locally they have got it wrong. Cutting costs to starvation levels to show a fake increase in profitability then moving on to ruin the next piece of the business. I smile because these people often refer to themselves as trouble shooters and they are absolutely correct. They shoot trouble all over every bit of the business they are let loose on. If you see one or more of these active in your company, then it is prime time to sharpen your CV.

Number 5 - Nothing changes

A clear sign your organisation is in trouble is when nothing changes. OK change for changes sake is pointless and if your company is good why change it. According to a report published by the Bank of Korea there were (in 2008) 5,586 companies older than 200 years. Of these, 3,146 are located in Japan, 837 in Germany, 222 in the Netherlands and 196 in France. But what I mean by nothing changes are that internally the company fails to adapt and grow. When innovation dies then eventually so does the company itself. I have written elsewhere on my Darwinian views on business so won’t elaborate here. I think another symptom is that change takes too long. Look at your IT department as the best barometer for this. Are you at the cutting edge providing next generation levels of staff and customer engagements. What do your systems and processes tell you about your business? Is it changing? Adapting? Exciting and growing? Or dead, entropic or past its sell by date?

Number 6 – Everyone is stressed and under pressure

The surest sign your organisation is sick is when it makes its employees sick. Too much pressure or stress on people doesn’t work or isn’t sustainable. Good employees will put more pressure on themselves than any manager could. They are self-motivated and know what needs to be done. An organisation needs to nurture and nourish talent then focus it. It is that simple.

Different people react differently to stress. Some thrive, others give up and some even subvert the pressure into negative feelings and behaviour. But does your company offer praise as well as pressure? Or does it beat you with a stick when you don’t perform and then beat you with a carrot when you do?

Number 7- The fun goes

The final sign that there is trouble ahead is when the fun goes. When we all enjoy what we are doing, working together in a team towards a common goal doing a good job and enjoying the company of colleagues and customers then work is fun. I am familiar with Maslow’s hierarchy of needs but even when we are ‘self-actualising’ or improving ourselves, which is supposed to be one of the highest levels of needs (after food, shelter, love etc) I still think it is better to do this whilst having fun.