If you do not act to transform the management of your company, death comes quick and for sure!

The financial crisis has brought many effective and good behaviors, such as increasing levels of responsibility at work, streamline processes for achieving results, management thorough the available resources, caring for a job, etc … but also behaviors and attitudes generating failure, bankruptcies and self-generated insolvencies.

One of these suicidal behaviors is that owners or general managers say; “We have to wait for things to settle down a little longer, then we see what we do,” or, “in May 2013 things will get better and the market will give the go ahead….”

In fact, they do nothing else than to generate the inevitable death or bankruptcy of the companies they worked hard for over 15-20 years.

What has happened to this company?! At this moment it is completely undercapitalized; the owner is seriously ill, employees are desperate and fearfull for their jobs, unpaid customers, employees and families with children had their dreams dashed and of course the examples could continue.

What are the first signs of a company that needs a quick and consistent change at all levels of business?!

I’ll present below a very concrete approach so as to help you in managing your business, namely:

  1. Company imbalances and dysfunctions signals;
  2. What happens if you don’t act immediately or wjat are the effects on the medium and long term of:
    • Employees;
    • Managers;
    • Financial results of the company;
  3. Clear actions to eliminate problems;
  4. The first signs of a steady business;
  5. The clear results of your actions.
Company imbalance signals:
  1. Every employee has clear goals, but not realised more than 80%;
  2. Employees challenging objectives under the pretext that are not real, they are very large or have no connection with reality and the market;
  3. Employees do not know how to determine the objectives and consequently don’t put any effort to achieve them;
  4. Employees who promise a lot and do nothing or less than promised;
  5. Employees who achieve their aims only at very high;
  6. Managers who make huge psychological pressure on employees to achieve the objectives assigned but get nothing but directed stress;
  7. Procedures exist in the company, but are not observed or assumed;
  8. Processes that are not implemented or assumed. From here arise malfunctions on the degree of achievement of objectives;
  9. Existing job descriptions which are not assumed or useless;
  10. Performance Indicators unrealized;
  11. Activity Reports incomplete, inconsistent or ambiguous;
  12. Evaluation systems that have no impact or effect only for demotivating people;
  13. Bonus systems that have no effect on the achievement of objectives. In other words, although it seems a good bonus system, sales are not growing;
  14. Training or organization of training sessions, but without results due to the lack of implementation of concepts gained;
  15. Employees leaving the company in the first six months because of the lack of implementation of a system of organizational integration.
Long-term effects on employees, managers and financial results:
  1. Employees who are demotivated, lacking in professional sense and they become jaded, depressed and yield little or no results;
  2. Managers who fail to prove any ability to cope with a chaotic system of management and business. Later they will become victims of professional desegmentation (see Article disaster of a bad head hunting process);
  3. A company’s financial results will be disastrous, the company can easily enter insolvency or bankruptcy, decapitalisation of the company because lack of control of uncollected receivables from customers which in turn became insolvent, negative cash flow;
  4. Financial resources spent in vain with no tangible results. Hence the lack of trust for undertaking organizational actions, training, consultancy, etc .;
  5. Successive attempts to organize the company, but without tangible results;
  6. Smoldering conflicts between company management and employees;
  7. Organizational chaos, lack of control over employees and their results;
The clear actions to eliminate problems:
  1. Mechanisms of business forecast through which to establish strategic, operational and tactical goals;
  2. Mechanisms to disseminate the objectives for each hierarchical level and competence;
  3. Mechanisms of accountability and achievement of quantitative and qualitative objectives on positions;
  4. Constant support for each employee to carry out the actions initiated in order to achieve objectives;
  5. Allocation system, dissemination and achieving the goals on all positions.
  6. A format system for job design;
  7. Strategic coordination system of employees and positions in the company;
  8. Psychological motivation system of employees in conjunction with the implementation of a stimulating or mechanical incentive system;
  9. A management by objectives system assumed by all company employees;
  10. Standardization of system performance, assumed by all company employees;
  11. A performance evaluation system, undertaken by all employees of the company;
  12. Operational and strategic control system which is efficient and adapted to the company.
The first signs of rebalancing the business

After the first six months of the initiation and implementation of the actions above:

  1. Employees assume the setting and achievement of objectives;
  2. Employees are motivated and involved to succeed as a result of receiving real support from their managers;
  3. Managers are focused on mentoring and coaching activities of employees and less on excercising useless psychological pressure;

After the first six months and 12 months of initiation and implementation of the actions above:

  1. Employees are involved in achieving job and are motivated to carry out all their actions;
  2. The company will be a systemic and organized one and results that can be expected. In this sense, we can concretely predict revenues, operating expenses and investment;
  3. CAPEX and OPEX, very good;
  4. Financial indicators are stable and controllable.
Clear results of actions:
  1. Increase by at least 25% achievement of objectives on the job;
  2. Employees oriented solutions and concrete actions centered on business growth;
  3. Assuming, by all employees, the objectives assigned, and how these are set;
  4. The disappearance of doubt about the lack of consistency in setting goals;
  5. Systemic organization of the company so as to eliminate malfunctions caused by incoherent company activity and control of the results;
  6. Total control over actions and results of each employee so the company can focus on growth and consolidation and not on solving business problems of functionality, employee motivation or control;
  7. Employees are motivated to remain in the company and grow with the company;
  8. The need for company development and consolidation of business;

Doing a summary of the above, we started from the finding that all companies are doomed to failure if they are not organized and do not act systemically, strategically and unless management changes are taken.

Probably watching carefully the above one would ask; How long do we have ?! When will the first results appear?! We have to start over?! How should we invest?! Does it deserve our efforts and do we have the guarantee that we can succeed?!

To all these questions, I can respond with great interest and openness if you want.

Petre Nicolae is managing partner in the training and consultancy company CBC Romania and has an experience of over 15 years in business management, occupying in turn on positions of top management in the largest national and multinational companies in Romania. Works in consultancy since 2003 and specializes in strategic and organizational management.
In the past five years he has specialized on professional recruitment systems and head-hunting. Besides his practical experience in top management, Petre Nicolae holds an E-MBA, free practice certificate in Business Coaching and a PhD in Strategic Marketing and Sales.