Rotting trees are a funny thing. They look healthy enough until a storm hits. That's when branches fall or, in the worst case, the whole thing comes crashing down. I think that companies behave in a similar way. To that end, here are 10 ways that managers allow their companies to rot.
10. Ignoring Communication Issues
Here's a pretend conversation in a media company:
Editor: All of our articles are showing up as a blank white screen except for the Hed and the Dek!
Salesperson: This needs to get fixed immediately or we may lose an RFP!
Engineer: We're investigating issues with the CDN, the API and the CMS.
Technical Marketer: Can we return a 503 until the issue is fixed?
Ad Operations: This will lower our RPV if it recurs.
Financial Analyst: That will directly impact our EBITDA.
Executive: Heaven help us, our IPO is just around the corner. Should I list this as a risk in our S-1?
Jargon and acronyms may speed a conversation up, but they slow collaboration down and can make smart employees feel dumb or marginalized. Explaining things may seem slow or condescending, but in my experience, a person is comfortable saying "Yes, I already know what that means," but is reluctant to say, "I don't understand." (This holds even truer in large groups.)
9. Always Adding, Never Subtracting
Growing a company is like growing a plant: Pruning it allows newer, stronger shoots to grow. Sure, some old stems may fall off naturally, but, if they don't, the dying branches may steal enough resources to kill the growing ones. Focus and attention are finite resources.
8. Managing for the Quarter
$100K today or $400K in three months? In my experience, many management teams will take the $100K if it means they'll make their quarterly numbers and look good at a board meeting. I suspect these managers would be fired if their board knew that decisions were being made this way.
7. Promoting Talent Away
It's not possible nor desirable for everyone to be a manager, but sadly, taking a managerial role is the only way to score a promotion in many companies. For example, the best engineer may be great at solving technical challenges, but no better at managing a team than a mediocre engineer.
6. Telling White Lies
"I know the name of every person in the company," said my CEO in an interview. I laughed as he said it because it wasn't remotely true. Nevertheless, the next day at work, I noticed that some of my co-workers hadn't dismissed the statement as puffery like I had. They knew that the CEO didn't know their names and it made them feel diminished and unimportant. White lies seem harmless, but they can breed a culture of dishonesty and resentment.
5. misunderstanding Why Something Works
The road to hell is paved with misunderstood intentions.
I've heard senior executives sing the praises of an open floorplan, citing Bloomberg and Facebook as success stories. Then those same executives retreated back to their offices and shut the door. (Mike Bloomberg and Mark Zuckerberg, both billionaires, sit amongst their employees.) This is a bit like parents telling their children how important family dinners are and then excusing themselves each night to eat privately at a restaurant.
Similarly, an open door policy should mean that anyone can confidently raise a concern up- or across-the-company in confidence and without fear of reprisal. Nevertheless, I've seen open door policies turn into a sad game of telephone where the concerned employee is later warned about going above someone's head or behind someone's back. This effectively leads to a closed lip policy.
4. Keeping Bad Employees Around
Super workers are amazing. They accomplish 3-4 times more than very good workers and are 12-16 times more effective than underperformers. (I'm not pulling these numbers out of thin air: part of my job is to quantify teams.) Imagine a simple team with only two members: an underperformer and a super worker who is 12 times more effective. The super worker spends one-third of her time coaching and managing her struggling colleague, and maybe he doubles his output as a result. This isn’t the win that it seems to be: The super worker alone is 20% more effective than the pair.
I understand, of course, that a single person isn't a team and that coaching new or struggling employees is an important investment. My point is to show that keeping under-performers around saps the productivity and morale of a team, and in extreme cases, the whole company.
3. Celebrating Too Early (aka, The Redesign Problem)
From: CEO
To: Company
Today is a big day for the company. Open your browser and you'll see a sleeker, faster and all-around better version of our website. This is cutting edge work and a hearty congratulations is deserved for all involved, so please join me in saying great job!
From: Joe User
To: Customer Service
Your new website is terrible! It's slow and all the stuff I use disappeared, I have to scroll endlessly to find things, the page dances around as it loads and the site search is broken. Fix it or I'm gone!
I once saw 70% of paying customers cancel their subscriptions (yes 70%!) after a website redesign. Many executives desperately clung to the belief that the redesign was a success, even as thousands of complaints piled up. By the time they admitted the truth, it was too late. Jobs were lost.
2. Throwing Good Money After Bad
Problematic employees, struggling divisions, failed acquisitions: Most companies face challenges like these. The trick is knowing when to invest through the trouble and when to call it quits.
I don't have guidance to share because every situation is different. But, I will say that struggling companies tend to ignore successes, or take them for granted, while investing time, energy and money in things that aren't working.
1. Turning a Blind Eye
Incompetence. Absenteeism. Malfeasance. These things are a cancer that will drive away a company’s best employees if left unchecked. I understand why employees might be reluctant to speak up about bad managers, but I cannot fathom how managers let employees get away with horrible behavior. Pretending a problem doesn't exist is a dangerous form of lying with serious consequences for an entire company. This might be the worst kind of rot.
Every company suffers a little rot, but a good corporate culture will fight it off like the body fights a small infection. On the other hand, if a company is sluggish or struggling to do things that it once did well, it’s critical to look for signs of rot within before looking for outside causes.