High-performing
organisations generate their energy to succeed. They induce staff and Team
members to elevate themselves to perform at their highest potential. However,
even though people achieve more in high-performance environments, staff and
Team members tend to find working in such an environment less taxing. The
working day feels shorter and vastly less frustrating.
At the other end of the
scale, low-performing organisations are plagued by dysfunction, are incredibly
stressful to work within and suffer from inconsequentially low levels of
customer service. Leadership's most common failure points are the most challenging
part of a Director or Team Leader’s role. Poor-performing Directors or Team
Leaders blame the wrong people, fail to hold people accountable and give little
or no direct feedback, especially when it is negative.
These management and
leadership aspects push the Director or Team Leader into an uncomfortable zone.
They lack the support, resources, or skills in these critical areas, especially
in large corporate or public-sector organisations.
There appears to be a high
social price and a substantial personal risk in the Director or Team Leader's
future if they dare to deal with the issues of low staff or organisational
performance. Directors or Team Leaders become incredibly risk-averse when managing
low performance. The problems are apparent when it comes to dealing with the
following:
- Unproductive staff.
- Staff who lack the intellect or
intelligence for the role that they have been assigned.
- There is no political will to
overcome the organisational weaknesses.
Low-performing organisations
suffer from an incredibly diverse range of issues, which have been allowed to
develop into significant problems, typical examples of which might include:
- Public Sector Bodies that fail to
ensure compliance with the UK Government's Procurement legislation. Every
year that these organisations fail to follow such practices increases
their costs by an average of 2 – 7% per annum ahead of the open market,
depending on the Consumer Price Index (CPI) rate.
- A Heavy Construction Equipment
Dealer importing construction equipment from Europe. The construction
equipment was CE-compliant upon import. However, it was sold to UK
customers without CE compliance when the construction equipment was
adapted for the UK Market. The organisation failed to ensure CE compliance
by implementing model-specific fitting instructions for UK-sourced options
and attachments. The organisation also failed to mitigate any commercial
risks of equipment failure by ensuring that the threat was transferred
back to suppliers by having the appropriate customer/supplier contracts in
place.
- A construction company failed to
manage its accounts payable Invoice system, resulting in unpaid supplier
invoices worth over £5M for over two years. The high value of outstanding
invoices made it incredibly difficult for the organisation to raise
finance, pay suppliers, and deliver construction projects on time. The
issue of unpaid invoices pushed costs up as suppliers viewed the risk of
doing business with the organisation as unacceptably high.
- A Retail and Manufacturing
operation failed to manage its Manufacturing Requirements Planning (MRP)
system, which increased the lead times for raw materials, subassemblies
and finished goods. The increased lead times led to significant customers
being lost as lead times, stock levels, and capital tied up in stock
increased, whilst product availability, profitability and sales were
reduced.
- A Manufacturing operation failed to
match demand with supply, leading to products being manufactured without
levelling production schedules to maximise manufacturing efficiency at the
least cost. The low availability of stock increased the value of customer
back-orders, order lead times, risk-hedged stock levels, supplier minimum
order values and stock obsolescence costs. There was a reduction in
customer order fulfilment rates, cash flow, sales and profitability.
Within the UK, four in ten business
organisations fail within five years of their start-up. This could be for
several reasons, such as:
- Weak leadership: A director or Team Leader who
excels at leadership will communicate, direct, reward and offer the
opportunity for personal growth to their staff and Teams, whilst a poor
leader will demotivate and allow their Teams to become ineffective as they
fail to inspire those around them.
- Bad Planning: Failing to prepare is preparing
to fail. Long-term Planning is the key to success. When mapping
organisational growth, a Director or Team Leader must conduct market
research to establish their customers and requirements.
- Lack of Strategy: Without a well-thought-out
strategy, an organisation does not have identifiable business objectives
and will lack the focus required to achieve its goals and objectives to
move forward. A lack of goals and objectives means an organisation will
not have a clear vision of its future. Goals and objectives are used to
develop long-term growth and productivity plans for the organisation’s
sustained success.
- Losing Financial Control: An
organisation must always know its financial and cash position. Accurately
forecasting income and costs is a prerequisite and will ultimately support
an organisation’s cash flow. Directors and Team Leaders must understand
and control their costs and acknowledge the risks and opportunities to
minimise any nasty surprises. Inadequate financing can lead to an
organisation's failure, as without access to sufficient capital, an
organisation may not have the funds it needs to grow.
- Poor Cash Flow: Cash flow is the lifeblood of any
organisation. Poor cash flow management can lead to the demise of any
organisation. Even a profitable organisation can incur a crippling cash
flow crisis. The ineffective management of debtors, high stock levels, bad
debt, and late invoicing are often causes of this.
Low-performing staff,
Directors and Team Leaders drive low-performing organisations. Poor performing
Directors set the culture that ensures low performance across the organisation,
as they fail to:
- Integrate horizontally between
functions.
- They do not listen to
cross-functional Teams.
- Talk to staff to get a steer on
issues.
- Mentor and coach Managers in the
development of tactical planning.
- Seek input to create the
organisation’s strategy.
Team Leaders set the
performance criteria to ensure low performance across the organisation, as they
fail to:
- Tactically plan to achieve higher
performance.
- Plan for improvement and
productivity gains.
- Set sufficiently challenging
performance targets.
- Communicate with staff.
Customers do not have the
right to incur poor performance. Directors and Team Leaders need to be
accountable for the organisation's performance. Organisations fail to manage
accountability, as low-performing Directors and Team Leaders are allowed to
remain low-performing Directors and Team Leaders rather than being dealt with.
Low-performing Directors and
Team Leaders also forget that staff are paid for their services in exchange for
a salary, preferring to prioritise staff "rights" at the expense of
customer service. High-performing Directors and Team Leaders know that staff
and customers have equal importance and never disadvantage one over the
other.
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