How a business can fail due to bad leadership
This is a cautionary tale about a multi-national construction company that was well respected and profitable but ultimately went into liquidation due to people performance problems. The business suffered with very high staff turnover (up to 40%). Quality of work, Health & Safety and Compliance all suffered and project deadlines were consistently missed due to insufficient training. All of this had a knock-on effect financially and to the brand.
My role as Head of Learning & Development was to work hand in hand with the Head of HR to reduce attrition improve capability and the culture, which could only be described as toxic.
“PRIDE IS CONCERNED WITH WHO IS RIGHT – HUMILITY IS CONCERNED WITH WHAT IS RIGHT!“
‘Ezra Taft Benson’
The organisation was a medium sized construction company founded in 1990 and operating across the UK, Ireland, Europe, Asia and the Middle East. The founder had sold 49% of the business to five of the senior managers, intending to take a step back and take life easier. The senior managers were all experts in their own fields, but had very little experience of leading a business.
The business needs were significant, but the first thing that needed to be tackled was the culture, and this had to start at the top!
The board was dysfunctional, all experts in their own fields, but with a lot to learn about running a business, being a cohesive team, trusting each other and their senior leadership team and how to lead from the top. However before we could tackle any of that they needed convincing that they required help and to accept it.
Having a clear strategy is vital for any business and unfortunately the board could not agree on anything, including the strategy. Even more critical was the fact that they wouldn’t accept help from their employees or consultants who could have made it happen.
Most managers had been promoted because they were good at their jobs and had little or no people management training or experience. They were ill equipped for managing in a challenging environment and were disregarding processes and procedures.
Employees were not performing effectively, were not challenged and would blame each other for problems or mistakes.
Silo working was rife, with staff very insular and teams not venturing outside their offices let alone to other floors.
Autonomy was not a word that was recognised. Red tape was widespread and everything took much too long, because each decision was dependant on a board level sign off. When the board weren’t available everything came to a grinding halt.
Most of the departments were overstaffed with underperforming teams. Employees demanded high salaries and packages, threatening to leave and go and work for competitors, so managers would bypass the HR processes to keep them. This resulted in unbelievably high people-overheads but without the high performance that should have been expected from the salary bill!
Despite how it may sound, there was a lovely group of people working for this business. However, they were frustrated, unhappy and, when they were honest, scared – nobody felt safe.
As individuals the Board were nice people – as Leaders they had a lot to learn and, as a team, a mountain to climb.
The greatest challenge wasn’t the lack of skills, although that did need addressing in some areas, it was the attitudes and behaviours!
The most successful businesses these days are not autocratically led with a culture of fear! The most successful businesses are Collaborative, Inclusive, encourage Honesty and Openness where people can be themselves and are valued for what they bring. Yes, the businesses which are well known for their amazing cultures are huge, but that is only because we know them. Businesses of all sizes have brilliant cultures – but it doesn’t usually happen by accident. For a great culture to thrive it has to start at the top and be a key decision.
“HUMILITY IS VITAL IN A LEADER – KNOWING AND BEING ABLE TO SAY “I HAVEN’T GOT ALL OF THE ANSWERS” IS A GREAT WAY TO START TO BUILD TRUST.“
‘Ezra Taft Benson’
Change always takes time and commitment from everyone to make it successful, both of which can be in short supply, particularly in a highly charged business. However, there were many people in this organisation who wanted the business to change and thrive and were working tirelessly to support the initiatives.
The Leadership & Management development programmes already in place were extended to include aspiring managers and leaders, aiming to influence the culture from all areas.
An in-house mentoring programme was developed, where those who were on the leadership development training would mentor younger team members. This would give them the opportunity to use what they had learned and to support and influence the employees further down the line.
A Competency framework was developed for each role, starting with leadership and management roles. This would address the competency levels and the behaviours required to improve the culture.
Coaching was made available for directors and heads of departments initially to support improved team management and build greater trust.
The Construction Director started to introduce Project Pods where those working on specific projects would sit together to encourage more collaborative working.
Prioritising what to do first wasn’t easy there was so much that needed to change, but we had to look at what would have the most impact soonest!
There was an exponential amount of change required to turn the fortunes of this business around and it was vital for everyone to work together particularly for the Board to work with the senior leadership team to facilitate everything that needed to happen.
Sadly, despite starting to see some glimpses of change happening, it was too late, the business couldn’t be saved. The Administrators were brought in and the business was closed down.
Parts of the businesses were sold off and a huge amount of the workforce made redundant. It saddens me to see this happen, but it is not unusual, and the pandemic has and is likely continue to make things difficult for some time to come.
“The sessions I had with Debbie were extremely engaging and I looked forward to them. I found the strengths and leadership profiling that we worked on extremely insightful – it helped me to understand what I needed to work on and directly focused my coaching to work on my leadership skills. The outcome was that my confidence grew exponentially. I was able to delegate work effectively and adapted both my written and verbal communication styles for which I received fantastic feedback from both my team and the senior leaders.”
Lessons to be learnt…
“It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare.” “If everything is important, then nothing is.” “Remember teamwork begins by building trust. And the only way to do that is to overcome our need for invulnerability.” Simon Sinek.
When I talk about cohesive teams, I’m not just talking about the team you work with directly, I mean the wider team! It doesn’t matter whether you are the CEO or the youngest trainee, each and every person has an important role to play in the success of every business and must work together to make that business great.
There were multiple problems that needed addressing to save this business. But from where I was sitting and from what I was hearing behaviours were at the root of the problems.
Pride needed to be swallowed – which I get isn’t easy….
It’s important to learn to trust, be open, transparent, honest, inclusive and and to reach out for help from the people who know best. It is essential that business owners lead from the top and role model the behaviours required to build a GREAT company culture not a toxic one….
Don’t let this be your business. It may be difficult to pay for professional help, but, believe me when I say somebody like me can help you and save you time, effort and money! But more importantly help you, your people and your business THRIVE, so contact me today to get started.