Top 10 Reasons Businesses Fail: Number 9 – Dysfunctional Management

Top 10 Reasons Businesses Fail: Number 9 – Dysfunctional Management

Companies that have more than one owner have a greater chance of failure than companies with only one owner. Throw in family members, and it’s even worse. Owners and managers in problem companies lack focus, planning, standards and strategic vision. Their roles are not well defined and there is a general lack of operational organization. 

The first step to correct this pervasive problem is to organize the processes of the business. By organize, I mean to say, write them down. The six major areas of any business are Human Resources, Finance/Accounting, Sales/Marketing, Operations, Communications and Administration. Define the steps and stages of each of these areas. When there is only one manager, all functions fall under that manager’s domain, but when there is more than one manager, conflict arises on how each one should be executed.

The second step is to recognize and admit that every owner and manager has their own strengths and weaknesses. Some managers are good organizers and poor sellers. Those are the managers that should focus on the administrative side of the business. Others are awful at organization, but can sell sand in the desert. These are the managers who should be dealing with clients. Once you know the strengths and weaknesses of managers, mete out the various responsibilities with no overlap. E.g. Manager A is responsible for 3, Manager B is responsible for 1 & 5, and Manager C is responsible for 2, 4 & 6. Each area is each manager’s domain. Even when there are two family members who each own 50%, one has got to be the ultimate authority in the decision making process for the business.

When was the last time you gave a written questionnaire to your employees to ask them how they really feel about the management (including owners) of the company and what processes could be improved upon to make the organization more functionally sound? I mean a survey with no retribution, no matter how hard it is to hear? If the management is not approachable, the organization is destined for failure.

This is day 3 of 10! I know these are long posts, but they should be full of information. Even though they are my opinions, if you want to be successful in business, you have to read, research and keep an open mind.

Written By Ameen Walker