I have had the great fortune over that last five years of working in highly functioning organizations, or at least self-proclaimed highly functioning organizations that have survived quite well through the great recession of 2008 – 2010. I have also spoken to quite a few organizations that have not fared so well during these times. So, what seems to be the difference between the “continuing to be profitable and the not being profitable firms”? Here are a couple of observations:
1. Is Everyone In the Same Canoe and Paddling In the Same Direction?: It has become almost cliché to discuss the functionality of a firms Leadership Team. But when you compare the highly successful firms to the firms that are struggling, the buck stops with the leadership. I am not talking about any single leader, I am talking about the Leadership Team. Each company has one, whether it is a formal “C” suite or an Ops Team, the group is responsible for the health of the organization. Clarity is the adjective that pops into my mind when observing the highly functioning team… and Lack of Clarity for the dysfunctional. Clarity of mission… where is the firm going, are we positioned to grow, stay the same, strive for profitability, expansion? Clarity of purpose… what do we do that is different from our competition? Clarity of ownership… does the current ownership have a succession plan? The lack of clarity between the team sends mixed messages to everyone in the organization and confuses employees about how they can be successful and more importantly, determining how they can help the organization be successful. The Leadership Team needs to lead, create clarity of purpose within the firm and then communicate consistently, with the same message throughout the firm.
2. Systems, Processes and Incentives, Got them?: At the risk of sounding like a Dilbert cartoon, firms that have transparent project management systems (yes, Project Management systems, NOT accounting systems), business development processes, quality control, client interaction, performance management, continuous learning… PROGRAMS… are the firms that have survived through the tough times. When the phone stops ringing and you now need to “follow the money”, who is doing it? What are others to do? How can I help? What is our backlog? Where can we re-deploy resources? If you are not exercising these “programs” while times are good, you won’t be able to react when times get tough!
3. The Yellow Brick Road: While being spontaneous has its attraction, a firm that has not developed a firm-wide strategic plan for a 5-year, 10-year or longer, has not communicated to its very ambitious employees what the company has planned for their future, their career aspirations and what the company holds as important. One of the first things that is taught in business school is to development a Mission and Vision for your enterprise. Fine you say, for the MBA’s of the world, but that just isn’t why I went into business. OK, I get that, but once you have past the 20 employee mark those people that you rely on for accomplishing the task at hand want to know, “where can I go in this firm?”. If the answer is “just keep doing great work and all will be good”, well that just isn’t good enough and you will lose your best and brightest to firms that have developed and are implementing their long term strategy.
Finally, Leadership needs to get clarity among themselves and dance to the same sheet of music. Implementing this may cause some casualties, but they will be necessary for achieving “Clarity”. Put systems and processes into place and “exercise them”… consistency is key and follow up important. Lastly, communicate continuously about where the firm is going and that the road ahead is an exciting adventure that all can participate in to grow their careers and be on a winning team.