Customers represent the core of any organisation and are essential as they provide the revenue needed for the growth and sustainability of any commercial operation. Organisations must prioritise customer satisfaction and loyalty by providing products and services that meet or surpass their expectations. This can only be accomplished when the organisation's directors and team leaders are held responsible for its performance, which is essential for steering the organisation towards success.
The Role of Organisational Senior Leaders
Directors and team leaders are vital in making strategic decisions, supervising operations, and leading teams to ensure that objectives are accomplished and performance targets are reached. If directors and team leaders do not carry out their responsibilities efficiently, the organisation risks not meeting expectations and potentially losing revenue. Customers anticipate a specific level of quality, reliability, and consistency when engaging with an organisation.
If the organisation does not meet these expectations, customers may patronise other businesses, decreasing revenue and harming the organisation's reputation. Directors and team leaders are entrusted with the critical task of guaranteeing that the organisation fulfils its customer commitments to establish precise performance objectives, offer their teams the required resources and assistance, and track advancements to confirm that goals are achieved.
When directors and team leaders fail to take accountability for the organisation's performance, they neglect their responsibilities to the customers and the organisation. Organisations frequently face challenges in handling accountability, especially in dealing with underperforming staff. Often, individuals who are not meeting expectations are permitted to continue in their positions without facing any repercussions, resulting in a culture characterised by passivity and average performance.
Directors and team leaders need to be accountable for the organisation's performance. Low-performing senior leaders will remain low-performing if an organisation does not ensure they are dealt with. It is wise to remember that staff are paid for their services in exchange for a salary and that organisations must never prioritise staff "rights" at the expense of customer service. Staff and customers are equally important, and one must never disadvantage one at the expense of the other.
The Symptoms of Poor Performance
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:
- A dealer of heavy construction machinery imported equipment from Europe to the UK, where it was initially CE-compliant. However, after modifications for the UK market, the equipment was sold to customers without undergoing independent safety testing or re-evaluation for CE compliance. The organisation did not ensure adherence to regulations by providing model-specific fitting or maintenance guidelines for options and attachments sourced in the UK. Additionally, it neglected to address the potential organisational risk liabilities of equipment failure by not establishing suitable customer and supplier contracts to transfer the risk liability back to the inbound supply chain.
- A civil engineering organisation struggled to effectively oversee its accounts payable invoice system, accumulating over two years' worth of unpaid supplier invoices totalling more than £5 million. The significantly high quantity of outstanding invoices severely hindered the company's ability to secure financing, settle payments with suppliers, and complete construction projects punctually. The backlog of unpaid invoices increased costs as suppliers perceived the risk of partnering with the contractor as excessively high.
- A retail and manufacturing business struggled to effectively oversee its manufacturing requirements planning (MRP) system, resulting in prolonged lead times for raw materials, subassemblies, and finished products. These extended lead times caused considerable customer attrition, as delays, inventory levels, and capital invested in stock rose while product availability, profitability, and sales diminished.
- A manufacturing operation could not align supply with demand, producing goods without adjusting production schedules to optimise efficiency and minimise costs. Insufficient stock levels heightened the value of customer backorders, extended order lead times, increased risk-hedged inventory levels, raised supplier minimum order requirements and contributed to costs associated with stock obsolescence. Consequently, there was a decline in customer order fulfilment rates, cash flow, sales, and overall profitability.
- Public sector bodies that fail to ensure compliance with the UK government's procurement legislation. These organisations fail to follow such practices yearly, increasing their costs by an average of 2 – 7% per annum ahead of the open market, depending on the consumer price index (CPI) rate.
Without the necessary support, resources, or expertise in critical areas such as accountability, feedback, and performance management, senior leaders may be unable to lead their teams or achieve their organisational goals effectively. Struggling directors or team leaders must address these deficiencies, seek support and development opportunities, and strive to improve their management and leadership skills to succeed in today’s complex and competitive business environment.
The Issues of Organisational Low Performance
Directors or team leaders who struggle with performance often misplace blame, neglect to hold individuals accountable and provide minimal or no constructive feedback, particularly regarding negative assessments. This deficiency in management and leadership skills can lead them into a challenging position, as they may lack the necessary support, resources, or expertise in these vital areas, particularly within large corporate or public-sector environments.
Addressing low staff or organisational performance issues can carry significant social repercussions and pose considerable personal risks for directors or team leaders. As a result, they tend to adopt a highly risk-averse approach when confronted with underperformance, which can further exacerbate the challenges they face in effectively managing staff. The problems are apparent when it comes to dealing with staff who:
- Contribute little to the overall performance of the organisation.
- Do not have the skills and capacity to perform their duties effectively.
- Lack determination to address and rectify organisational deficiencies.
- Have lost the motivation or engagement to complete their allotted tasks.
- Fail to commit to fostering improvement within the organisation.
Directors or team leaders who struggle with performance often find themselves in a difficult position due to their inability to manage their teams effectively. This lack of leadership skills manifests in various ways, including misplacing blame, neglecting to hold individuals accountable, and providing minimal or no constructive feedback, particularly regarding negative assessments.
One of the most common pitfalls for struggling directors or team leaders is their tendency to misplace blame when things go wrong. Instead of taking responsibility for their team’s performance, they may point fingers at others or external factors, deflecting accountability away from themselves. This lack of accountability can create a toxic work environment where staff feel undervalued and unsupported, decreasing morale and productivity. They may overlook poor performance or inappropriate behaviour, allowing problems to persist and negatively impacting the team, setting them up for failure and hindering their success.
Instead of offering guidance and support to help team members improve, they may criticise poor performance, leaving individuals feeling discouraged and unmotivated. This lack of feedback can hinder team development and prevent individuals from reaching their full potential. Ultimately, these management and leadership skills deficiencies can have severe consequences for struggling directors or team leaders, particularly within large corporate or public-sector environments.
The Consequences of Organisational Low Performance
Within the UK, four in ten UK 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, while 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 customers and requirements.
- Lack of Strategy: Without a well-thought-out plan, 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 support an organisation’s cash flow. Directors and team leaders must understand and control their costs and acknowledge the risks and opportunities to minimise unwelcome 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 potentially lead to any organisation's demise. Even a profitable organisation can incur a crippling cash flow crisis. The ineffective management of debtors, high stock levels, overwhelming debt, and late invoicing are often caused by this.
Low-performing directors and team leaders drive and manage low-performing organisations. They set the culture that ensures low performance across the organisation, as they fail to:
- Integrate horizontally between functions.
- Listen to cross-functional teams.
- Talk to staff to get a steer on issues.
- Mentor and coach teams in the development of tactical planning.
- Seek input to create the organisation’s strategic direction.
- Plan to achieve higher team and organisational performance.
Organisations that excel in performance create a dynamic atmosphere conducive to success. They inspire employees and team members to push their limits and reach their fullest potential. In these high-performance settings, individuals often increase their productivity, making the work environment less burdensome. As a result, the workday tends to pass more quickly and is significantly less frustrating.
Conversely, organisations that struggle with performance are often characterised by dysfunction and high levels of stress. These environments can lead to notably low customer service standards, further exacerbating employees' challenges. The difficulties encountered in such settings highlight the critical areas where leadership often falters, making it one of the most demanding aspects of a director or team leader's responsibilities.
The contrast between high-performing and low-performing organisations underscores the importance of effective leadership and a supportive work culture. Leaders can mitigate stress and enhance overall employee satisfaction by fostering an environment that encourages growth and collaboration. Cultivating a thriving workplace is essential for achieving sustained success and delivering exceptional customer service.
