Like a car with an engine that
can't fire on all cylinders, a business that's dysfunctional may move
forward for a while. But eventually it stops running.
Companies don't start out maladjusted, of course. It just tends to happen
over time.
"The hallmark of a dysfunctional organization is a gap between reality
and rhetoric," says Ben Dattner, a New York organizational psychologist.
When resources are not used effectively or fairly, when plans are heavy
on talk but weak on action or when barriers to communication cripple performance,
you're dealing with a dysfunctional company.
Once diagnosed, the corrosive effects of such problems can be corrected.
But make no mistake: It's neither easy nor immediate. You need to be tough-minded
about identifying the source, particularly because it often starts at
the top, where the power resides.
Here are three telltale signs that your company is unhealthy and some
possible ways to get it well again.
1. You've got leaders who fake it.
Recently, management consultant Linda Hanson of Dallas-based LLH Enterprises
was called in to help turn around a Houston construction company that
had about 50 employees, annual gross revenues of $160 million and senior
managers who were at each other's throats.
"People were snarly and mean," Hanson says. "There was
in-fighting and lots of yelling. They had lost respect for one another
and weren't working as a team." A prime example was the information
technology (IT) manager. Although every department depended on him, the
other managers complained that he "didn't care about their problems,
didn't have time, didn't listen, didn't support them and marched to his
own drum," Hanson says.
The atmosphere got really heated when the chief executive officer, in
an attempt to change the culture, hired a new, buttoned-down sales manager
who began instituting very different policies and rules. The hiring drew
such fire from the other managers that Hanson was tapped to address the
company's ailments.
She began with exercises in "process mapping." At a meeting
of the managers that included the CEO and president, she asked everyone
to look at work flow and operations, focusing on inbound orders, external
sales, delivery and so on. She asked each manager to stick up a Post-It
note whenever he saw a glitch or something wrong, without finger-pointing,
of course. "That caused great excitement," Hanson says. "They
began to see the duplications and the weaknesses." More importantly,
the CEO and president, who were usually removed from such details, had
their eyes opened to what was going on.
Later, she confidentially asked each manager to evaluate himself and all
the other managers. Then she went back to each to report: "Here's
how you see yourself and here's how the other managers see you."
That stopped a lot of the backbiting.
Hanson also required the managers to meet one-on-one for lunch, for a
golf game or the like, every month. Each executive was given specific
and corny assignments for such meetings, such as being told to talk about
a hobby or an interest — anything but work. The idea, of course,
was to build relationships. Within four months, she says, managers set
up meetings to discuss business scenarios rather than to fulfill assignments,
which was the result she intended.
Still, the real problem stayed at the top. The CEO and his friend of 10
years, the president, "were both volatile people and they weren't
changing," Hanson says. Even though they were asking senior managers
to evaluate their work habits and improve peer relationships, the chief
executives themselves were unwilling to do the assignments or to work
at transformation.
"Within four to six months, the company was functioning much better,"
Hanson says. But it needed another nine months to a year to really come
together. And that didn't happen. "You need to set a picture at the
top of what the company should look like. It's very hard to say to the
CEO, 'You're the problem.' "
Lesson: The discrepancy between what leaders say they
want and what they really want often causes company dysfunction. You can't
ask employees to do anything you're not willing to do yourself.
2. You've got bosses who like to point fingers.
No company can flourish in an environment that penalizes experimentation
or trust. While that sounds obvious, on a day-to-day basis the nature
of risk-taking inevitably means a great number of dead ends before any
breakthrough. Very few managers remain calm after hitting the wall.
But how you handle those crashes — and how you encourage employees
to pick up the pieces and start anew — makes all the difference
between a company that encourages innovation and one that stagnates.
"When you see a pattern of blaming and people trying to protect themselves
and their particular turf, something is wrong," says Ross Moserowitz
of Franchise Insights, a Bedminster, N.J., consulting company.
Lesson: The remedy is to put your trust in the people
you hire and give every employee sincere responsibility. Hands-on, my-way-or-the-highway
entrepreneurs won't find this easy. But that's how the business gets better.
3. You've got a CEO who doesn't set priorities.
Fast-growing companies are often so intensely focused on moving to the
next level that no one is actually in charge. That's how dysfunction creeps
in and takes hold.
Paul Glen, an IT management consultant in Marina del Rey, Calif., tells
about a 20-year-old software company that hired him to create a new product
management department. The business had released several successful products
and grown to 100 employees with 13 departments, each headed by a different
executive. Every one of the managers reported directly to the CEO, so
no one had to talk to anyone else about his department's work.
When Glen asked each executive what the new department would do, he got
13 different answers. It turned out that the company didn't need a new
division at all. What it needed was someone to coordinate the company
agenda and get the managers to share information.
The idea for a product management department was how the executives expressed
their need for better coordination. "The product development department
didn't take direction," Glen says. That meant the group simply created
products and released them without checking with any other department.
So sales didn't know about the features of the new products, or when to
sell them. Support and consulting were also in the dark. They couldn't
help customers implement products or fix any problems. And so it went.
"Each department flew off on its own, trying to do what was right."
Priorities were constantly shifting. Decisions were continually made and
unmade. "The CEO assumed the executives had the authority to make
product decisions and it wasn't her job to tell them what to do,"
Glen says. While everyone had the very best of intentions, chaos reigned.
Lesson: Company leaders must set the mission and the
agenda. A hands-off policy can only go so far.
Epilogue: Time for a checkup
Smaller businesses are both more susceptible and harder hit by the ripple
effects of dysfunction. With a close-knit staff, it's easy to make allowances
for people's tempers or bad moods or refusal to take responsibility. But,
sooner or later, that kind of thinking catches up with you and the business.
Lesson: Take the time now to check the health of your
workplace. And make the course corrections you need. Starting now.
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