Failure to Align

There exist the tendency for organisations activities at the functional levels to be mis-aligned with their strategic intent and therefore outcomes.  This usually stems from organisations growing without stopping by to assess the demands that such growth changes place on the organisation.  Such situations result in increased cost of operation therefore losing out on lean management opportunities. The organisation’s output is also not aligned to its core values.  Growth can come in various ways and it is imperative that organisations perform strategic analysis to know where they are and do well to align all aspects of business functions to the central strategy.

Focus on short-term profits.

Organizations sometimes focus on short-term profits rather than on long-term success. This often occurs when shareholders demand bigger dividends, or when an executive board focuses primarily on short-term growth.  Long-term successes ensure the sustainability of the business and its resilience.  An example of short term strategies to generate profit is to cut down on training to save cost.  The organisation would eventually end up with sub-standard staff who may not be able to catch up with the current competitive demands.  Such organisations may also lose out on innovations that would have the potential to grow the organisation for the long term.

Management should be intentional about achieving a mix of short term and long term benefits and allocate resources appropriately

“Managing by fear.”

Performance management is a powerful tool for positive change and business improvement.  Organisations should seek streamline processes that ensures appraisals and performance monitoring with fairness, transparency and sensitivity. 

A management expert Deming however points out that organizations can use performance reviews to “manage by fear,” and this causes people to focus on short-term performance at the expense of long-term success.

Managers should aim at creating a workable process audit to ensure managers are making the best use of performance management systems to achieve productivity.

High senior management turnover.

There are huge implications to businesses if senior management members leave organisation in a high turnover situations.  It primarily affects the workplace environment breeding anxiety, lack of confidence and usually points to underlying problems of governance, culture and job satisfaction.

Organizations with high staff turnover in senior management positions never reach their full potential.  The time, effort and cost needed for managers to get full grips of their roles and build expertise becomes wasted if they just leave after becoming equipped. 

What’s more, if you have high staff turnover in the management team, there will always be key people who contribute little, because they’re still getting “up to speed.” This means that your team is never fully effective.  It may lead to a short-term mindset if management members are always ‘in rotation’.

To resolve this trend, the first is to dig out why this is happening. Be prepared to be accept the truth and work with them.  Ensure that their personal objectives are congruent to the organisational objectives.  Be prepared to deal with identified causes either on incremental basis or radical approach

Focus on “visible” figures excessively

Figures don’t lie, we say.  Most organizations manage their performance largely based on financial metrics. Of course, figures are important, they are very directional and directly correlated.  The well-known metrics include cash flow, sales margins, staff expenses, earnings per share among others and not controlling them is tantamount to failure. However, an excessive focus on financial numbers can lead managers to “see the cost of everything, and the value of nothing.”

Other factors that drive organisational value are the soft (qualitative) metrics.  The quantitative metrics ride on the back of these soft ones for achievement.  Among those than to subjective factors such as happy customers, motivated staff, high product quality, brand value and  positive work environment.

The organisation should always look at their critical factors and assess how they feed into the overall performance of the organisation.