We talk a lot about leadership and how strong leadership is required for success in any organization. Strong leaders guide the company and the team along the mission-paved path, leading to the alluring vision of what the company will be one day. Strong leaders are confident enough to help grow skills in others without being intimidated. They can also manage various personalities and determine the strongest course of actions. But what happens when there is poor leadership? Is it just a matter of not liking the boss, or are there more dire consequences?
Think back to a time when you worked for a manager who didn’t know how to manage, was irritable, gave no direction, had unrealistic expectations, etc. You probably dreaded going to work every day. Maybe you even quit your job – a job you actually liked – because you just couldn’t stand working for this person one more day. You may have gotten out of a bad situation, but what effect did your leaving have on the company you worked for?
The Real Costs of Poor Leadership
Most people don’t realize how much poor leadership costs an organization. There are the more obvious financial implications caused by poor leaders such as bad decision-making, higher expenses, and lower revenue from an operational standpoint, but what about the cost in terms of the staff? Bad leaders can cost companies millions of dollars a year by negatively impacting employee retention, customer satisfaction, and productivity. The health of the team can quickly deteriorate right alongside the financial statements.
Bad leadership comes in many forms, but having poor communication skills is one of the worst. When leaders don’t know how to communicate effectively, they can’t adequately direct employees. Consequently, employees don’t truly understand the mission and vision of the organization and have difficulty visualizing their own goals. Instead, they become methodical in their accomplishment of tasks, with no innovation or stake in the outcome. This can lead to unmet deadlines, a reduction in productivity, and unhappy customers, all ultimately leading to a toxic environment and high staff turnover.
Staff turnover is more than inconvenient; it is extremely costly to a company. With additional exit interviews, followed by interviewing, hiring, onboarding, and training new employees, constant turnover can directly affect the bottom line. Statistics show that 57% of staff leave a company because of their boss. That’s more than half of the staff. Further, each staff turnaround costs an average of $5,500. So, in an organization of 100 employees, that costs the company $550,000 in staff turnover alone.
At the end of the day, bad leadership causes damage that is difficult to repair. It incurs higher costs for a company and lower profits. But the good news is that being proactive can help eliminate these risks. Be aware of the following signs of poor leadership before an employee you value walks out the door:
disengagement by employees,
lack of cohesiveness among the team,
decrease in productivity, and
You might consider instituting employment surveys and manager reviews to help spot these signs faster. But remember nothing is a substitute for truly listening to your employees. And once you spot a problem, keep in mind that it is only half the battle – you also have to address it. And that may mean firing or reassigning a poor leader for the larger benefit of the whole team.
You can also prevent bad leaders from developing by investing in your future leaders. Provide meaningful opportunities to learn and improve leadership skills to even entry-level employees who show initiative and promise. A small investment at the outset can lead to improved staff retention, which leads to increased productivity, profits, and success. Remember the adage, “employees don’t leave companies, they leave managers.” Keep your employees around longer by developing managers they actually want to work for.
Barker Associates has extensive experience in leadership issues and their overall effect on the team. We can assist in determining effective solutions that will help your team stay engaged and onboard. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
True leaders know they are as only as strong as the team they build around them. To that end, hiring not only the most qualified, but also the most compatible C-Suite executives with whom to strategize and collaborate on the future of the company is invaluable.
Recruiting the right person at this level differs significantly from recruiting at other levels. He or she must possess the requisite qualifications and also the requisite experience to be enabled to make significant decisions quickly. Moreover, he or she must have the ability to handle incredible amounts of responsibilities, and function well, if not thrive, under pressure. This person’s presence will impact other employees, the company culture, and the company itself. And a bad hire at this level can lead to enormous disruptions, including damaging morale, decreasing productivity, and adversely affecting the company culture.
Finding the Best Talent Doesn’t Come without Challenges
Recruiting top-level employees presents its own unique set of challenges that aren’t generally encountered at other levels. These challenges should be kept in mind as the recruiting process begins. First, you will likely face competition. These employees are in demand, usually having the ability to choose where they want to work and name their terms.
Additionally, C-Suite employees in general are not actively looking for a new job. In most instances, they are already employed. However, individuals at this level are always looking for new opportunities, so don’t let their current employment stop you. The workforce is different today. Long gone are the days of people retiring from a company after thirty years of service. This person may be ready for a change in his or her career, and that change could be your offer.
Tips to Help Secure the Right C-Suite Fit
Set Goals. Ask yourself the following: What are you looking for? What is negotiable? What is not? What input have you received from your board of directors or even other employees? You should have the answers firmly decided upon before moving forward, and be clear about them during the interview process. It is equally as important to understand with clarity who you do not want to hire. What characteristics do they have? Transparency from the start is essential in this process.
Draft the Right Job Description. Don’t just resurrect an old job description or write what you “think” you need. Engage in due diligence to find out what your competitors are searching for, what candidates are putting out there (if anything), and then set benchmarks and make the description appealing based on the information you learn. This document should never merely be about a title and responsibilities. It should reflect the company’s culture and clearly demonstrate where this person will make the largest impact and how.
Realize Expectations. C-Suite candidates will have certain expectations, often resulting in increased costs. They may request their own office, own parking spot, and certain other benefits. Ask yourself what you are prepared for and can handle financially before you engage in discussions.
Vet carefully, but do not delay. It’s important to get to know this person – not just their qualifications and experience, but their values and who they are at their core. Utilize behavioral interview questions and emotional intelligence quizzes. Have frequent follow ups and thoroughly check references. However, all of this is said with a caveat. Remember this individual is likely in high-demand, and one of your competitors could move in and make them an offer if you delay too long.
Consider promoting someone from within. You should always consider moving someone up from within. Benefits of this decision include being good for overall morale, motivating employees, and increasing retention. Yet, while it is ideal to promote from within, you must ensure he or she is ready for the type of responsibility and demands the C-Suite brings with it.
Hiring at this level requires forward-thinking analysis. It calls for significant preparation far before any job description is drafted or interview occurs. For example, you want to ensure that you’ve created a culture that reflects the company’s mission, objectives, values, and long-term vision. Without proper alignment, you risk attracting the wrong type of candidate for your company.
Often, the first (if not, one of the first) C-Suite executives hired is the Chief Financial Officer. Generally speaking, the owner or CEO excels at strategy or operations, but does not possess the knowledge needed for financial decisions. He or she needs someone who thoroughly understands all financial aspects of the company and can then guide it the right direction. Outsourcing this function is another available option.
With the significant investment of time, money, effort, and energy the recruiting and onboarding of your new C-Suite employee will be, you want to ensure longevity with the right fit. Barker Associates has extensive experience working as an outsourced CFO and assisting companies in determining their needs for this position. If you would like to discuss these services, or if you have other specific areas of concern, please click here to schedule a 30-minute consultation at a rate of $100.
The statistics above are a benchmark based on the gender representation of companies making up the Russell 3000 stock index; the index is comprised of the 3,000 largest U.S.-traded stocks. If the California law was applied to the boards of these 3,000 companies, 3,732 are the number of women that would need to be added by 2020 to comply with California’s law. Since most Russell 3000 companies are incorporated in Delaware, the legislation would have to be adopted in Delaware for to cover this many companies.
Should companies wait until the legislation requires balanced
gender representation on boards? They can wait, but it will be similar to
maintaining data and information on a system that was implemented in the 1990s
that few IT professional even know how to program – neither decision makes a
lot of sense. Note the most recent search
for the President of the University of South Carolina came to a screeching
halt when none of the finalists were women. There were women interviewed and at
least one of the semi-finalists took themselves out of the running for the
position. There are several unanswered questions about this situation, like did
the search committee conduct the search to reach out to all qualified applicants,
were the questions to the applicants generally the same? There is no doubt the
University of South Carolina spent time, money and energy seeking a President and
was unable to accomplish this satisfactorily.
The cost is difficult to quantify, but there is certainly a cost related
to this situation.
Is it that difficult for well-meaning companies to find
women leaders to serve on boards or serve as C-Suite executives? I truly
believe it is for several reasons.
Forbes magazine reported on Amazon’s
appointment of two well-known leaders, Indra Nooyi and Roz Brewer earlier
this year to serve on their board. Because a small pool of U.S. leaders is
consistently tapped for board positions, they do not have the time to serve on the
multiple Boards to which they are invited.
The Forbes article goes on to suggest that one of the
reasons women don’t make the cut is the qualifications being sought.In general, the qualifications being
Must be a sitting CEO or senior executive in a Fortune 500 company.
Must be a financial expert.
Must understand cyber-risk and security.
Must understand innovation. Those are just some of the criteria stated out loud.
Implicitly, the board candidate also:
Must not have an agenda (feminist).
Must not be too old.
Must not be disruptive.
Another factor to consider is our networks.
If male leaders primarily are cultivating networks with
other male leaders and women leaders primarily are cultivating networks of
other women leaders, who else would they recommend when a board position opens?
one-fifth of US board directors being women, it could take until my
daughter’s children have children for female board representation to reflect
A Board of Directors is elected to represent shareholders. Who is speaking for the 26% of U.S. women invested in the stock market? Why should you care if the boards of Corporate America are diversified based on gender or other factors? Here are a few of those reasons:
Your potential customers will view a diversified board as making better strategic decisions when the customer is represented.
Talented, highly qualified employees value the actions of their employer and will be monitoring social media and the news, as stories of board diversity are reported; as potential employees, they will embark on their job search with such information in hand.
Satisfied customers and a skilled workforce can lead to successful earnings and annual reports – and ultimately – happy shareholders.
Honestly, one of the most difficult things to overcome with women moving up to the C-suite and taking on Board appointments is the sacrifice required to maintain that type of position. More men than women are willing to make that sacrifice. When I think about this, it leads me to think we should examine the requirements for C-level executives and leaders, regardless of their gender. If you have a transparent conversation with a spouse or a child of anyone who holds one of these positions in the USA, they will admit it is difficult on them and the family. I have had demanding professional positions most of my career and I have had to constantly make difficult decisions on how to allocate my time.
If having gender representation on boards of directors that reflects today’s workforce is important to you, what else can you do to promote your belief?
20% By 2020 Women on Boards is a national campaign to increase the percentage of women on U.S. company boards to 20% or greater by the year 2020. Established in 2010, it is a 501c3 organization co-founded in 2010 by Stephanie Sonnabend and Malli Gero.
Their website lists several actions you can take, from establishing a local campaign committee to easy actions you can take to have a voice. Visit their website for more information.
In summary, company leaders are going to have to focus on this issue if they want the company to continue to make money, which most do. Legislative and social pressure is just too great. It is a multi-dimensional issue that is going to require messy conversations and creative solutions to overcome. We should all think about this issue and make a choice regarding how we are going to work toward a resolution – perhaps mentor a young professional; perhaps you, as a current board member, begin to ask how many hours are the C-suite leaders working and try to move to realistic expectations; and if you are serving on a search committee for one of these positions, a well defined process is an absolute must.
If my post hasn’t convinced you just how passionate we are about this topic, let me add that I include this issue in these upcoming speaking engagements. I’ve included the links to each event so that you can consider attending.
If you don’t know where you are going any road will get you there. – Lewis Carroll
Customer experience (CX)
has been a hot topic for the last several years.
Companies have invested in teams to analyze data, customer service issues,
survey results, and they’ve utilized sophisticated tools such as the Net
Promoter Score (NPS) to understand how likely the customer is to share their
experience and promote the company.
Companies have increased
their budgets and resources to understand the habits, needs and desires of customers to create the perfect
journey and ultimate experience for those they serve but, despite all their
efforts, some companies are still falling short, which means lost revenue,
customer churn, and retention issues with their employees.
CX is the sum of all
interactions. According to a 2018 survey by Gartner, nearly 90% of businesses
compete on customer experience alone. Whether your company is transactional or
subscription-based the competition is fierce and if you want to attract, retain
and grow your customer base you have to lead with the end in mind and design
the ultimate experience.
Employee Experience EX
The exclusive focus on the
customer alone has not resulted in the business outcomes companies desire. Perhaps
the focus should be on something a little closer to home…the Employee Experience (EX). After all,
without employees you can’t serve customers, so maybe the old adage “customer
first” should take a back seat for organizations that truly desire to be
transformative in the market place.
Social media and platforms
like Glassdoor and Indeed have created complete transparency so that organizations
can no longer hide from the real-time employee workplace reviews. In this
competitive market, where skilled talent can be scarce,
companies cannot ignore the need to make the Employee Experience a priority.
Like CX, EX is the sum of every day to day
interaction the employee has from the first contact to last. It’s every
touchpoint they have with recruiters, HR, their boss and peers, the software
they use, the processes they must follow; each touchpoint is specific and
The Employee Experience is
a full spectrum of all their experiences and
a well-designed EX should empower employees with the tools and know-how to
serve customers successfully, provide employees control over their professional
growth and development, and create an atmosphere for positive and healthy
collaboration in a well-designed workplace. When EX strategy is developed and correctly
implemented the end result will be happy employees with a commitment to the
company and their job.
According to a 2016 report
by Deloitte University
Press, organizational culture and employee engagement was a top
priority in 2017 and is still a top focus. The report noted that nearly 80% of
executives rated employee experience very important or important, yet only 22%
felt that their companies were excellent at building a differentiated employee
experience. Of those same responders, more than half were either not ready or
only somewhat ready to address the challenge.
In lieu of a true
strategy that focuses on understanding and implementing modern actionable solutions
to promote a positive EX, employers are using perks like casual Friday, free
ice cream and an occasional “bring your pet to work day” to solve the problem. Companies
use these perks in an attempt to build a great culture without any actual
thought to what creates a great culture.
Jacob Morgan, the author of
The Employee Experience Advantage, analyzed over 252 global organizations to
understand the attributes that promote EX and drive employee engagement. The
top 3 companies that excel in this area are no surprise: Facebook, Google, and
Apple. We’ve all heard about some of the amazing perks these companies offer, but according to Morgan, leadership in these
organizations has focused on the bigger picture to yield positive results. They
focused in areas that really matter to
employees: culture, technology, and physical space.
Culture is a nebulous word and people define culture in a variety of ways. Morgan describes culture as a side effect of
working for an organization. Are your employees frustrated and burnt out? Do
they have a voice and an opportunity to present ideas or provide feedback
without fear of backlash? Is there role clarity and a clearly defined path for
growth? If you’ve heard negative chatter,
you likely have a culture problem impacting the EX, which will ultimately
impact the engagement level of your employees and your customers.
Employees should have
access to technology that supports their function. Technology should be a help
not a hindrance to employees. They should be able to work successfully and with
ease with the help of technology, but sadly, many companies have convoluted
systems that don’t sync, resulting in
errors, rework and duplication, all of which are time-consuming, costly and put
not only the employee experience at risk but your company as well. Leaders who
fail to stay current with new technology and upgrade the employee experience
through exposure to more advanced technology risk losing those employees to
companies who do make such investments.
Lastly, a great employee
experience is dependent upon the physical space in which employees work. Is
your office well lit, clean, free of clutter? Do you participate in initiatives
that support a healthy workplace? Are employees situated in an environment that
supports their tasks? For instance, if call centers are placed next to
employees who must utilize quiet focus to get their job done, then you likely are going to have some unhappy and frustrated
Companies that invest in
the development of a focused EX have seen improved results with attracting and
retaining skilled employees who are passionate about the company and the brand,
and play an active role in the ongoing success of the organization. Employees
want and expect to develop their skills as the company grows and adapts to
market demands. Maintaining stale, obsolete skills is the ultimate morale
Although developing a
focused strategy has not been a priority to organizations, of the 252 global
organizations analyzed by Jacob Morgan, only 15 companies, or 6%, have created
a winning employee experience; companies that don’t focus their strategy are at
risk for both employee and customer churn.
Focusing on long term
solutions means taking the time to engage employees to understand their needs,
wants and expectations and work to align tactics with developing a winning experience.
In the end, you get happy, productive employees who bring tremendous value and
drive positive business outcomes.
Are your business outcomes
meeting your expectations?
Where is your focus, the CX
or the EX?
Have you invested in your
Employee Experience or paid it lip service?
Barker Associates will help you review and understand opportunities to enhance your Employee Experience – the work environment, use of technology and company culture. Together we can design and implement employee experience solutions that yield happy employees and positive results. Contact us today at (904) 394-2913 or by email at here.
My first CFO job was working for a relatively small organization with an administrative assistant who still used a typewriter and refused to have a computer on her desk. She had been with the company since its origination and she knew where everything was located. She had all the contracts, historical Board reports and legal agreements in a file drawer. If you asked her for a document, she could stand up from her desk open one file drawer and hand it to you within 3 minutes tops.
The truth is, in today’s environment, to locate corporate, financial and administrative documents when they are needed can cost organizations unbelievable amounts of money.
Betty did not like me too much when I became CFO, as she thought I was taking a job away from a man. My approach to this and all discrimination I have experienced in my career is to analyze the situation and determine if I could make it better by doing such an awesome job no one could ignore me. If that was not possible, I would have changed my geography.
When she came to some of the first C-level management meetings, she would ask all the men in the room what they wanted to drink and skip over me. I was fortunate to have a wonderful boss who would then follow her out of the room and tell her what I would like. I quickly realized that if I wanted to be successful in this position, I had to figure out how to win Betty over so that I could get to those documents and of course get a cup of coffee at the management meetings.
Who’s Job is it to Manage Corporate Documents?
Times have changed and the days of Betty or any administrative assistant asking if you would like something to drink or logically organizing documents have gone the way of the rotary telephone.
Businesses have, for the most part, eliminated the administrative assistant position as they feel the position is not needed now that professionals have email and all the APPs and tools a computer provides. Even if there is an administrative assistant, the job description generally will not include managing and maintaining corporate documents. I frequently ask when I begin a new job with a company who has this responsibility; C-Level executives of small and large organizations look at me just like I asked them what kind of cheese is on the moon. They have no idea.
Failure to follow a document management process costs your organization in the following ways:
The C-Level executives do not have a clear line of sight to the contract terms they are bound to as they are carrying out their corporate responsibilities. This can lead to losing major customers, noncompliance issues with regulatory bodies and lawsuits that take a tremendous amount of time to litigate.
Creates negative relationships with vendors. I once spoke with a professional who had served as a manufacturer’s rep for an organization for several years. The management of the company changed, and when the manufacturer’s rep came to meet with the new management, they were told: “I looked in the file drawer, there was not a contract, so I am terminating our relationship today.” The manufacturer’s rep had a long-term relationship with the company and its customers in a very closely held industry. Once the new management realized the mistakes they had made, it was too late. Not only did the contract had a 90-day termination notice clause, but the rep was well-loved by many customers. The negative ethical behavior on the part of company management left the rep unwilling to work with that company.
I have seen many a deal fall apart, and the potential investor or buyer walk away, before due diligence is complete. When a company’s documents are distributed in corporate and personal emails, shared corporate drives, personal drives, even the email files of terminated employees, locating them takes valuable time in which the potential buyer can find a lot of other things that interest them, causing them to move on to another deal that is ready to move forward.
Compliance issues are not dealt with on an ongoing basis. As a new CFO at an organization with government contracts, a governmental agency called me to report my organization was out of compliance with the terms of the contract. I pulled the “I am the new kid on the block” card and asked to call them back. It was shocking how long it took to locate the contract after I hung up the phone and even more shocking to learn the terms of the contract to which we had agreed. It was apparent to me that our organization had failed to thoroughly read and understand their contractual obligations. When I appealed to the agency that the terms were not reasonable, the agency basically said, “Well you (meaning the organization) signed the contract and you will be compliant, or we will terminate the contract.” This was not the welcoming present I was looking for.
Who is Your Betty?
If I had a nickel for every time someone sent me a contract they considered final, but was not fully reviewed and executed with all signatures, I would be inviting you to my corporate yacht this weekend. Betty would never have filed an incomplete document in her precious filing system without all the signatures, dates, notary stamps and corporate seals. Honor Betty and her memory, as she now rests in peace in the clouds; put someone you trust in charge of finding and organizing all the corporate documents and maintaining them. Your organization will be better for it.
Barker Associates has the unique ability to work with all sizes of organizations and building infrastructure that matters. Contact us today!
Mindy Barker, Founder & CPA | Jacksonville, FL 32256
(904) 394-2913 or (904) 728-2920 | CFO@MindyBarkerAssociates.com
What kind of question is that … of course you would not purchase a piece of equipment that does not work! Yet you may be doing exactly that if your hiring practices have not grown and evolved to support the growth of your company.
As the founder or CEO of an entrepreneurial growth, or family owned company, an honest evaluation of your hiring practices might highlight if you are investing in employees who do not “work.” In this context, “work” means they are not suited for the current stage of your company, prompting the question, “How did I not see this happening inside my own company?”
Entrepreneurial growth founders and CEOs tend to hire friends and family at the early stages of startup, relying on people who they trust, and with whom they have an existing relationship. This type of employee tends to be fiercely loyal to the founder, willing to put in the hours to help get the startup moving in the right direction. My observation has been the founder has enough day-to-day interaction with all employees to fill in the gaps and correct shortfalls that result from hiring based on relationships versus skills and qualifications.
As your company has evolved, perhaps these types of employees are no longer team players; or possibly your superstar employees have become discouraged as the company has grown and changed, so they are leaving and taking valuable company intelligence with them.
Companies that survive three years in business and realize success in their revenue goals also find that the needs of the organization have changed. Hiring practices require more structure and objective measures, which means additional up front planning when considering a new hire. Here are my recommendations for putting in place that structure and objectivity:
Complete job descriptions for existing and new positions. Since this process has Fair Labor Standards Act (and other regulatory) implications, refer to a source such as the Society for Human Resources Management (SHRM: http://bit.ly/1pJUinA), for guidance.
Use the job description to create a job posting, describing the new position and the criteria for candidates to apply.
Make certain you have an organization chart that clearly illustrates everyone’s relationship within the company.
Properly communicate to existing employees you are hiring a key team member and explain the reason for the hire and eligibility requirements for applying for the new position.
Prepare a template of key metrics the employee must have for the position before you identify the first candidate. Metrics such as job skills, education level, and experience should be included.
Reproduce the template for each candidate you interview. Use it to evaluate all candidates during the hiring process to help you stay focused on the essential needs of the organization – rather than letting your emotions get away from you and hiring someone you really like but is not suited for the position.
During the actual interview, the founder/CEO and select team members, trusted advisors or others, should be involved in interviewing candidates using the interview template for that position. Final applicants should be vetted with a background check, confirmation of all certifications, degrees and employment verification, prior to making a formal, written offer to the selected candidate.
If you have suddenly realized that it’s time to implement more formal structure and hire key executive positions for your growing business, contact Mindy Barker & Associates to find out how we can assist with the process. From developing the criteria for key executive positions, to working with firms to source qualified candidates, we will not only lead you through the process, but also leave you with a documented procedure to follow as your company continues to grow.