Five Signs of a Troubled Company

By Ron | Jan 6, 2008

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No, I’m not speaking financially troubled. I’m talking about a company full of unhappy, discontented employees. They’re all around us. You may be working for one right now.

Here are five signs of a troubled company.

Picture of Frustration

1. A focus on policy rather than principle. Troubled companies often have too many people making rules at the expense of principles. Principles should be the guiding forces behind everything a company does. The most important principle: Customer Satisfaction. A company that initiates a rule for every potentiality without considering how those rules will affect a front line employee’s ability to attract and retain customers will have frustrated employees and dwindling customer transactions.

2. An inordinate concentration on today rather than tomorrow. Troubled companies don’t try to be inventive or innovative, instead they come to the marketplace with the same old, tired marketing, the same old, tired products, and the same old, tired processes. There is no desire for change, no desire to innovate, and no desire to become better by becoming different. Then management wonders why it gets harder and harder to grow profits.

3. Leadership doesn’t live up to its promises. Troubled companies are full of managers (they really aren’t leaders) who want increasing revenues, but never meet with the source of those revenues (customers); they make grandiose plans for productivity increases, but never commit resources to deliver them; and come up with programs for change, but never do anything to implement those programs.

4. A lack of confidence in customers. Troubled companies keep the customer away from anyone that isn’t directly tied to a sales position. Customer’s usually return the favor by refusing to share their needs or frustrations and as a result, take their business elsewhere. When a customer doesn’t return it’s because:

They move away (3%).
They become friends with your competitor’s sales staff (5%).
They find a better deal at your competitor (9%).
They are dissatisfied with your products (15%).
They experience rudeness and unresponsiveness at your business (68%).

For the record, rudeness and unresponsiveness is a management problem.
5. A distrust of employees. Troubled companies believe that employees are lazy and worthless. If you treat people this way, they will either behave how you expect them to act, or spend their time and energy building a case that you’re wrong. In either case, both the customer and the business loses.

What should the business leader do?

Define your core principles and design policies and procedures around them.
Make goals that stretch out from the next quarter to the next quarter century.
Install a leadership team that knows how to keep its promises.
Insure your management team is in tune with your customers.
Hire trustworthy employees and then trust them.

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