Published On: Thu, Oct 11th, 2018

Leaving Non-Productive Managers on the Management Team.

Leaving Non-Productive Managers on the Management Team.

Look in the mirror, Mr. Owner. You are the one to blame for the problems! Leaving non-productive managers on your management team is a big problem. In most every turnaround engagement of a company, where I have been hired to solve the problems to make the business profitable again, the most significant issue is a weak executive(s) on the management team. At the beginning of each engagement, my first task is always to interview each member of the management team to determine if he or she is qualified to do their respective job. When I finish the interviews, it usually is evident which manager(s) are in over their head in their position or do not have the skills or ability to do their job successfully.

Once I determine who the weakest manager on the team is, I start working in their functional area looking for the “low-hanging fruit” to immediately grow sales, reduce expenses, and improve cash flow, etc.

The owner of a $30 million-dollar engineering company hired me to turn the company around. His complaint was “the larger we grow, the more money we lose.” This situation is a typical statement by owners that hire me, caused by Leaving Non-Productive Managers on the Management Team.

During my interviews with the managers, it was clear that the CFO was the weakest executive on the team. When interviewing the CFO, he hinted that the job had grown too big for him. He had started working for the company when the sales were $3 million at one location. Now the company was ten times larger in sales and had eight offices.

The Review

I reviewed the financial statements and found many errors. There were no operating budgets as part of the income statements. A substantial increase in the payroll tax expense from penalties was because of late payments to the IRS. The monthly financial package had been issued late each of the last eight months as well as being inaccurate. The bank statements were not reconciled for the past six months.

The auto insurance expense was materially higher in the current year than in the prior two years. When I reviewed the problem, I found that the CFO had overpaid the premiums by $90,000. The problem occurred when the company traded in vehicles and acquired a new van. The insurance company added the new vehicle to the policy but had not removed the old trade-in vehicle. This problem had continued during the prior three years. I was able to recover the total premium overpayment once I documented the issue to the insurance carrier.

After the first week, it was obvious that the CFO was over his head for the position. He was one of the main reasons the company was not profitable.

I met with the owner to discuss my findings for the first week. There were $120,000 in savings plus I told him my plan to replace the CFO immediately. We need to bring in a more qualified financial manager for the company. The owner said he knew that the CFO was his weakest manager. Unfortunately, he did not know how big of a problem the CFO was to the company! I told the owner that the CFO was an issue affecting the business’s profitability, but not the biggest problem. The main problem is his boss for keeping a weak manager on his management team. I was referring to him, the guy the owner sees every morning when he looks in the mirror.

If you own a business, you should evaluate the quality of your team at least twice a year. If you have a weak manager, you owe it to the rest of your employees to replace him. Your management team wants a qualified manger who can perform all the responsibilities of the position.

Robert “Bob” Curry has turned around more than 70 businesses, both large corporations, and small businesses. He comes to your place of business or the site of your choice. The first consultation, of course, is at no charge. Bob Curry has a stellar track record of professional success and excellent formal education, including Masters Degrees in Taxation.

Bob published his first book “From Red to Black – A Business Turnaround – The Matter of ABC Shutters” that is on sale at Amazon.com.

Please read all my blogs at Fortlauderdaleceo.com.

See the website Redtoblackbooks.com.

If you would like to comment on this article, my email address is Bob@ceorsc.com.

Bob resides in Fort Lauderdale, Florida, with his wife, Esther.

About the Author

- Robert S. Curry is an author, seasoned business coach, and successful turnaround specialist. Earlier in his career, he served as President and CEO of three different companies, the largest with annual sales of more than $1 billion dollars - all which experienced successful turnarounds under his management. In the late 1990s, he started his turnaround consulting firm, and for the past twenty years, he has turned around more than seventy distressed companies in many different industries helping each to establish a strong management team and become profitable. He published his first book: From Red to Black – A Business Turnaround – The Matter of ABC Shutters. He resides in Fort Lauderdale, Florida, with his wife, Esther.

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