I’ve seen it way too many times in my career – CEO’s and executive management firing great people as a first line defense to saving their sinking company. More times than not, the problem was not with the employees they chose to dismiss, it was with them: the “leadership.”
The truth of the matter is, if you as a CEO or executive manager feel like you need to get rid of people to revive your bottom line, or reduce your opex, it is you who needs to go. Poor leadership is always the reason for a company’s poor performance. Always.
"Everything rises and falls with leadership." -John C. Maxwell
If you’re in an executive role, and your company is in a bad financial situation, here are 5 essential things you must do to influence the bottom line and save your business:
1. Accept responsibility. A true leader never blames others for the demise of an organization. When employees fail to perform or effectively execute a strategic initiative, it ‘s often because expectations were not clearly defined, and the employees were not given the resources they needed to successfully achieve the objectives set forth. Leadership failed them, not the other way around.
Chances are, if your company is struggling to survive, I could come in and, in a very short period of time, point out exactly where things came unraveled. If you accepted full responsibility and owned the problem, could you do the same?
Truth is, you don’t have an opex, sales, margins or operations problem. You have a people problem. More specifically, you have a problem because you’ve neglected the human element of running your business. Ironically, it’s the very thing that can make your business run effectively once again.
2. Humble yourself. One of the biggest challenges I’ve seen leaders of a company that has experienced any degree of success face, prior to experiencing turmoil, is that of ego. Leadership gets cocky, and drunk on their marginal victories. Now it’s time for the CEO of the company to rally his executive team, humble himself, and admit to bad decisions and overly ambitious extensions of resources.
3. Get naked with your employees. The absolute worse thing you can do, in the midst of a company wide downturn, is lock yourself and your executive team down in the executive suite, and go silent to the rest of your employees. Yet I’ve seen it time and again. This destroys morale and starts the rumor mill cranking. Nothing could be more harmful to your company in such times. Rather, realize that the solutions to this problem you’re facing will not come from the CEO or the executive team.
The solution, all the answers, will come from the brilliant minds of the people you hired to carry out the vision and objectives you set forth prior to this disaster. Stop treating your employees like mindless incompetent worker bees. Admit that you made a mistake and be completely transparent with your employees. As you have probably figured out by now, most of them are far more intelligent than you and your executive team anyway. Therefore, it’s probably time you . . .
4. Leverage the wisdom. Your employees have been doing all the heavy lifting to make your company the success it has been up until this point. As a result, they have the granular insight you need to identify the leaks in the boat. Don’t dismiss nor minimize the value of their insight, suggestions and especially, their ability to create solutions to the problem.
Rally your troops, create a safe environment for them to brainstorm, vent, discuss ideas and offer insight. Then, invest in professional development and training that helps improve their leadership and communication skills. This will give them the ability to maximize and leverage their technical expertise, because they will increase in their ability to influence both internal and external customers.
5. Stop holding others accountable. What is this, the 1970’s? If you, as a leader, haven’t figured out by now that people, by nature, resent being “held accountable,” you need to hand in your own resignation. You simply aren’t fit to lead. You have no influence. People support what they help create. If you can do a good job in leveraging the wisdom of your employees, thereby giving them a stake in the resurrection of the company, they will own the problem and the solution. They will hold themselves accountable with great pride. You just need to get out of the way and be a true leader of people. Hold yourself accountable, not others.
Many will be tempted to believe this does not apply to their company or situation because they are “different.” Again: ego. Trust me, your situation is no different. I’ve worked in and consulted with more than one hundred different companies in my career, and the problem is almost always the same.
The company experiences early success and growth maybe even a long history of winning. But when the ship starts to sink, it can usually be brought back to egos out of sort, and a neglect of the human element.
Value your people, serve them, invest in their professional development, and you will have a much better chance of righting the ship.