Hubris, big egos, poor foresight, and lack of humanity kill great companies every year.
There's often a "Typhoid Mary" hiding in plain view in every organization. Mary Mallon, now known as Typhoid Mary, seemed a healthy woman when a health care inspector knocked on her door in 1907, yet she was the cause of typhoid outbreaks wherever she went.
Like her, there are the leaders who look 'right' - often seeming to be the smartest people in the room. But they also leave death and destruction in their wake. We can learn from their decisions. And we need to do that sooner than later - before more businesses fail leaving damage in their wake.
Here is a “top 10” of the worst decisions made by seemingly brilliant bosses across all industries each year. Read them and learn from the failures of others:
1. “Let’s cut back on customer service levels to save money”. “Due to unusually high levels of calls, we are experiencing long delays before we can answer your call.”
What kind of crap is that? What they really mean is, “because we don’t want to spend as much money on customer service as we should, we’ll put you in a queue for as long as you can stand it before hanging up.”
I once spent 45 minutes in a queue that never ended with Verizon. On the other hand, Time Warner answered my call in less than 20 seconds. Guess who has my business and my loyalty now? This is particularly dumb because the cost to acquire a new customer easily offset the costs of having a few more operators.
2. “We promoted Charley because he got great results in his last job.”
Presuming that someone who is good in one role will be just-as-good in a broader role can be the kiss of death for the employee and the organization. This can take the form of promoting someone beyond one’s level of competency, or broadening scope beyond his or her capacity.
Just because someone is a great engineer doesn’t mean they have the right skills to manage a department of engineers. Likewise, just because someone was tough enough to win business from a competitor doesn’t mean he has what it takes to manage a group or team. These are very different skillsets.
3. “We have to pay our employees less because payroll is the single biggest expense line we have”.
Many companies pay as little as they can get away with in a misguided quest for better expense management. And most of those organizations experience high employee turnover. Ultimately, they must spend more money hiring and training newbies.
Additionally, this approach has hard-to-quantify opportunity costs. They often lose profits and customers as a result of providing bad service and care while they are understaffed or using poorly trained personnel.
4. “We’ve been very successful, so let’s grow the company more quickly”. Expanding too fast, aka the Starbucks phenomena can take a great concept and push it so far that it’s boring and common, has lazy employees with stores which all look the same making it ripe for competition.
5. “We’ll get better results if we hire a superstar manager to run this place”. These people are usually more about promoting themselves as a brand then looking after the company, and as a result the company’s results tank.
Usually they stick around only as long as they need to move to another company. Much better to hire a few managers who are smart, creative and - most of all -dedicated to the company first.
6. “Our company is so cool we will always have a large pool of talent available.”
History is littered with once cool companies who took their ability to attract good talent for granted and now cannot regain that cache – e.g.: the GAP, Yahoo, Microsoft were all considered to be “the” places to work at one time or another, then too late they realized that all the great talent was going elsewhere.
Their results show what can happen when we take ourselves too seriously. Coolness is fleeting and the job opportunities for the best employees have become especially broad.
7. “There’s no place for family in the workplace.”
Not having a sound family care policy affects an organization’s long-term success. Today’s workforce wants to work with companies that respect their desires for family; and they'll leave to find it.
As more countries find that they may soon be unable to provide citizens with healthcare and pensions, this is a bigger deal than ever. Most young women work, and more young men have been raised by women who instilled in them the importance of family. Companies like SAS provide a great example to others who want to attract and retain the best talent in the market. And this doesn’t reduce the company’s profits or ROI.
8. 5% of Fortune 500 companies are led by women.
And that's an all time high! Not much different than when this piece of insanity was said a few years earlier:
“Let’s be honest, women are always going to want to have babies, so it’s dangerous to promote them too far up the ladder. When they leave we’d be in deep do-do.” WPP, the world’s largest ad agency fired their company head for this not many years ago - and I assure you it still exists.
It’s one of the reasons that most business start-ups are being led by women in North America.
9. “We are an equal opportunity employer. (It just looks like we’re not.)”
Having a management team or a boardroom made up of people who all look the same might make them feel smart and comfortable, but it reduces new idea flow for better decisions.
Research on this is clear: companies with better diversity plans have better shareholder ROI and profit margins than their counterparts. And, by the way, it’s more human to treat all of us equally.
10. “In difficult times it’s smart to take our time to make prudent business decisions.”
Actually, in today's world, it’s usually - better never than late.
Here's to your future!