This post is more about observations and reflections than about specific advice. How do we deal with problems in business, in an organization? How do we treat them? What are problems for us? – a reason for political struggle – an increase in budget and power, a reason for punishment/accusations/manipulation, an opportunity for growth for the company/for yourself, a reason for setting new goals and initiating new projects?
I am more interested in this question from the point of view of setting goals and developing indicators. Some companies are afraid to call the problem a problem because of the negative connotation of this concept, because you can smooth things over – instead of fixing the problem, it is easier to talk about finding growth reserves, the same thing, but in a positive way, and a positive outlook on things makes self-defense, emotional stress unnecessary – everything is OK, we are looking for growth reserves and smiling, “smiling and waving” …
In one company, an employee was rewarded if the employee identified a new production problem, previously unknown. The problem was described, classified, coded, entered into the database, and a standard solution was developed. If the employee made a failure that led to a previously described, known problem, then the employee was no longer rewarded, but on the contrary, warned, if necessary, trained. If the trained employee continued to make the same mistake, known, described in the company’s knowledge base, he was either significantly fined or fired. This case presents a completely technological approach to how to work with new and “old” problems, albeit production problems.
Let’s take another case, the company is a distributor, B2B. The case is impersonal, all coincidences are accidental. Let’s assume that the company has the following cluster of problems:
- The management style is “pseudo-democratic”, allowing for a lot of arguments “about nothing” at meetings between employees. Low discipline in implementing management decisions
- Dependence on shareholders-investors, who may provide money for development, or may not provide it, or provide less than desired
- Embellishing reality in reports
- The assortment is ineffectively planned – the customer asks not for what is in stock, but what is in stock is in low demand at the stated prices
- Frequent delays in delivering orders to customers
- High illiquid assets in the warehouse
- No money for new purchases
- Inefficient procurement. To obtain a commodity loan, you have to take the goods in the volume and assortment that the supplier dictates
- It is declared that work is done with clients from 2 key industries, but nevertheless, in practice, work is done with everyone who pays, everything for everyone
- The fundamental question has not been resolved: do we sell solutions or hardware, or both, but for different clients, and separate business areas
- Weak use of CRM, the tool was implemented, but its functionality is used at 15%
- Accounting provides a picture of the boiler for the entire company, but does not provide the necessary cost analysis by areas and segments
- High risk of loss of control over the activities of the company’s regional branches.
- Weak motivation system, bonuses are not paid because the company as a whole did not reach planned indicators
- High staff turnover (especially among sales managers)
Overall, a pretty nice crisis situation is emerging in the company. It is not important for the case. It is useful to rank the problems by importance and urgency of the solution, it is useful to analyze the actions to solve the problem for costs/effect. But why, if you like putting out fires?
Can a business live with such problems? Yes, the question is for how long. It can live for quite a long time. There are always problems everywhere, that’s normal.
What is the benefit of the exercise “to make a strategy” for this company from the case? There are no obvious competitive advantages over other players in the market. On the contrary, there are obvious lags behind competitors. You can use the strategy of imitation and pursuit of the leading company, but why? The leading company is a different management style, different rules of the game, and in the end, everything will turn out to be only a new headache for the company from our case, if the heads remain the same.
