3 Ways Bad Management Can Mess with Your Bottom Line

3 Ways Bad Management Can Mess with Your Bottom Line

Sid Smith

In a recent conversation with my colleague, Gail Bendert, we talked about some of the issues her clients face. Gail is an expert at helping small businesses navigate the often tricky and confusing finance and accounting waters, giving them a sound accounting foundation on which to grow their company, and getting them thinking strategically about their finances.

Gail and I discussed growth, me from an organizational and leadership perspective, and she from the financial view. Growth usually means more employees, more complexity, and more issues. Gail and I agreed that hiring great people is an absolute, but companies often overlook the importance of great leadership and management in their growth efforts.

It’s a simple equation: great leadership and management can drive profitability up, while poor leadership and management can drive profits into the ditch. Great leaders and managers inspire and elevate great employees, while bad management causes them to leave or disengage.

Here are three variations of bad leadership and management (and some solutions):

1 Toxic Joe

Joe was your top salesman. Everyone knows that he’s an arrogant jerk, but he can sell the heck out of things. The company grew, Joe became the new VP of sales, and you hope he can lead the sales team.

Wrong. Toxic Joe is going to bring his entire sales team to their knees. He’s only interested in HIS success, thinks nobody can match his selling skills, and consequently, your sales department has a revolving door of new, then burnt out people.

In short, while Joe was a great salesperson, he’s not a good fit for your company. If you looked long and hard at past results, you’d find that the reason Joe’s peers didn’t do as well was that his toxicity was at play even then.

Solution: The key is to clearly establish your company values. What do you believe in? What values will make you the kind of company you love owning and managing? Once established, these values are the lighthouse for your hiring and firing practices. Get rid of those that don’t demonstrate your core values, and only hire those that do. Yes, even your top producers should move on if they’re not a fit.

2 Mike the Micro-Manager and Diane the Doer

Sometimes your best workers become micro-managers because they can’t let go of being the expert. Their idea of “managing” is to help people do the job as well as they, which everyone knows is impossible.

Other times, your best workers were great because they were “doers.” They love the details, want to get things done, and will focus more on the “doing” part of their new management job. They work IN the business, not ON the business. I know someone who is a fabulous administrator, but a terrible manager.

Gail and I discussed a couple of these situations, and determined that these people simply didn’t WANT to manage people. They wanted the prestige, the raise, and the ability to hobnob with the movers and shakers. They may enjoy the administrative details, but they just don’t enjoy managing people.

Solution: The key with this manager is to review what we call GWC. When you can clearly identify the core responsibilities for a position (in this case it includes effective people management), you can review their GWC. They GET the job requirements (G). They WANT to do these job responsibilities (W). And, they have the capacity (C) to do the job well. Capacity is addressed in the next example.

3 Clueless Clive

Management training has mostly become a thing of the past, partly because it didn’t work. They gave managers 127 things to remember, and hit them with a new “management style” every other year. It was all great theory, but not so practical in real life because real managers don’t have the time to do those 127 things.

Simply put, many mangers today haven’t a clue on how to manage well.

Solution: There are only five leadership abilities and five management abilities that a good leader and manager must master. There’s not 127 things they must do well. Just five for great leadership and five for great management.

How do you stack up as a Leader and and Manager?

You can download a list of these 10 leadership and management abilities here.

Take the Leadership/Management Survey here.

It typically takes our leadership teams a few months to master these traits. Once they do, they find that their employees naturally become more accountable, more engaged, and more productive.

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