Does your company have organizational cancer?

Part I - Workforce

Like the human body, companies’ need all parts of their operation to work together in order to function effectively. When one part of the organization is not working properly, it can affect the entire business. If there is a problem with the warehouse shipping on time, it will effect sales, accounts receivable,  cash flow, customer relations and on down the line. A simple act of delaying a customer shipment for a week due to inventory or other internal problems, can have huge consequences.

A successful company continually monitors its organizational structure and procedures, than changes/tweaks them. The new adage is if it ain’t broke, you haven’t looked hard enough. These changes are based on a variety of factors, including outside influences, and should be addressed early, before they affect the whole company.   In this economy especially, it could mean a variety of different changes including:

                Employment/Employee Benefit Reductions

                New policies and procedures

                Inventory Reductions

                Pricing

                Customer relationships

                Accounting

                Marketing/Advertising

                Banking

During these difficult times, many businesses are focused on short term issues: making payroll; collecting accounts receivable; cutting expenses; etc… losing sight of the deeper issues that might be affecting them, and preventing them from long term success.   To be sure, survival in the short term is a necessity to thrive over the long term. However, this puts lot of stress on the workforce to implement unpleasant and difficult tasks.

Some people cannot and do not understand the reasons behind these tough decisions, and they sour on the organization.  Even in good times, there is resistance to change, particularly with long time employees who have seen the business grow and flourish.  This is exasperated during these challenging times.

When a small business transitions to a medium size business, new managers/executives are brought in between the owner/entrepreneur and the people who have been there for years, these new people attempt to implement changes to assist the organization to grow. How many times have we heard that is not how we do that here during the attempts to implement change?  This is a sign that there may be an organizational cancer.

As the business continues to move forward, these persons either adapt to the changes and grow with the organization, or more likely, will start to be a negative influence, not only effecting their own work, but spreading their negativity to the entire organization. This negativity gets magnified during these difficult economic times, as they do not understand why things are done; and they immediately are suspect of everything. Their attitude is that the company is out to take advantage of its people.

Identifying and treating these cancers quickly is imperative, otherwise it will start to undermine the organization. The source may be from a soured manager, who was a vital part of the organization in the past, and now views their role as diminished; or it could be from a successful sales associate who feels the changes in his compensation package are unjustified; or maybe even a family member, the most difficult of all to deal with. Negative energy in the best of times is expensive, in these times, it can be devastating.  The problem is identifying the source of the cancer. Many times the true source is hidden and all that is visible are the symptoms. Shipments are delayed, customers are not contacted promptly, collections slow, it could also be isolated in certain parts. Eventually, the organization starts to develop factions. The warehouse resists communication with the sales department; accounting blames the warehouse for not getting it the proper paperwork; for the case of a medical practice, insurance reimbursements are slow or rejected; etc….

Simple problems that could and should have been resolved with a conversation and minimal conflict, drag out into days and the owner/CEO may get involved. Every moment a CEO/owner spends on resolving an internal problem takes him/her away from the important things, moving the business forward.

Once the source of the cancer has been identified, treatment needs to be implemented. However, if it is a long time employee, the company is not only loyal to the person, but also views the person as an integral part of the business. The business must not be afraid to act, short term pain is better than long term death.  Treatment may be to remove the source or deal with the symptoms. It is imperative that these treatments are supported by the CEO/owner; lack of support from these key people will worsen the situation.

While everybody says they want what is best for the company, their actions many times do not reflect that.  How often have we heard blame pointed to others, when the important issue is to resolve the problem?

Like the body, these cancers need to be treated or removed, the sooner the better. Think about the pain someone has when their cancer is removed, but ultimately their long term survival is more important. Alternatively, treatments can be effective as well; in the case of a business this may mean clearer job titles and accountability. However, many times the only cure for cancer is to remove it, so the affected individuals may need to be removed. The business must be willing to act.

Like a cancer, you cannot ignore the problem, because even a small issue can continue to grow over time and overcome an organization.

Next month

Part II – Toxic Vendors