Poor Leadership and No Accountability – I was the President / CEO of a family-owned wholesale distribution business that was in existence for over 60 years. The company sold tobacco, candy, and groceries to convenience stores from Maine to South Carolina. When I joined the company, it was in severe financial trouble:
- $500,000 a month negative cash flow.
- $2 million deficit in retained earnings.
- Bank line of credit drawn to its limit.
- Small and declining gross profit margins.
- Extremely high employee turnover.
- Poor vendor and customer relationships
Poor Leadership and No Accountability – My immediate goal was to get the Company to breakeven status both financially and for cash flow purposes.
Six weeks after I joined the organization, I attended a meeting of the Company’s sales management. There were nine sales executives; the Vice President of Sales and eight Regional Sales Managers. My goal was to evaluate the quality, caliber, moral, and attitude of the sales management team.
I noticed that this meeting’s main topic was to vent every possible excuse why the sales team didn’t do their jobs. Not a single word was said about growing sales, providing excellent customer service or improving customer satisfaction. Collectively, they complained that:
- Prices were too high compared to the competition.
- Essential products were constantly out-of-stock.
- Fill-rates were very poor and below acceptable industry standards.
- Product selection for customers was weak compared to the competition.
- Deliveries to customers were often late causing additional labor costs for store owners.
- Delivery shortages and overages were excessive.
- There are shortages of promotional material from the vendors.
After listening for 45 minutes, I could not stand it any longer. Everything said up to that point was negative and laden with excuses. There had not been one single problem–solving discussion to develop solutions to any of the issues mentioned. It had been a 45-minute whining session. I interrupted and began asking the questions that I had jotted on my notepad during the meeting. There was an easel in the corner of the conference room still untouched. I went and moved it in front of the sales group to highlight some critical points.
Poor Leadership and No Accountability – The first question I asked each sales manager in the group was, “What is your actual job function for the Company?”
Poor Leadership and No Accountability. I had no idea from the conversation that I heard during the first part of the meeting what these guys did for the company. As I looked around the room, my question generated some very red faces. After a long pregnant pause, I asked the question again. Because of my frustration, I commented, “If I were to get out your respective job descriptions, what would they say?” That comment finally got some reaction, and one manager started to offer what he believed were the essential functions of the sales management team for the company.
I wrote the job responsibilities on the easel for everyone in the group to see. When completed, there were 11 primary functions, which included:
- Recruit and hire the sales force.
- Train the sales force.
- Motivate the sales force.
- Provide leadership for the sales force.
- Deliver the goals and objectives of the company to the sales force.
- Carry out the vision and mission of the company.
- Act as a liaison between the company, customers, and vendors.
- Obtain product knowledge for the sales force and customers.
- Deliver quality customer service.
- Provide promotional information of products from the vendors.
- Provide direction to the sales force regarding client acquisition.
Poor Leadership and No Accountability. After we had finished developing the list; I asked the group to prioritize it, from the most important to the least.
Next, with these items listed on the left side of the easel, I drew a line down the center. I chose to ask the individual who was the most vocal during the complaining portion of the meeting.
David was a big, confident type of guy and liked the attention. I said, “David, I am going to assume, for the benefit of this exercise, that you worked 50 hours last week.” He nodded approval, and I wrote the number “50” on the top of the pad just to the right of the line that I had previously drawn. Then, I asked how much time he did spend last week on the #1 priority item on the list. He stated, “Actually, none last week.” I went to the #2 item and asked the same question. This time, he estimated that he had spent about a half an hour on this function. I wrote down a half an hour next to the second item.
By the time I had gotten to the sixth prioritized responsibility on the list, he had estimated that he had spent a total of 3.5 hours of a 50 hour work week on the six most critical functions of his job. I stopped the process at that point to recap for the group what I illustrated during this exercise. David spent 7% of his time last week (3 ½ hours of the 50-hour workweek) on the six essential functions of his job as Regional Sales Manager. Therefore, David spent 93% of his workweek either on the less critical duties of his position or items not even on the job description.
Poor Leadership and No Accountability
For the last 45 minutes, all the sales management team did was complain about every aspect of the operational functions of the Company: purchasing; warehousing; distribution; order entry; customer service; accounting; and marketing.
Therefore, I identified the first of many critical problems that had put the company in severe financial trouble. Most importantly, I knew that if I went through the same process with every department, the results probably would be similar. These problems were not unique to the sales manager. This issue was just one example of the many challenges of every department in the Company. It was apparent that poor leadership, lack of focused direction and accountability caused these problems.
Poor Leadership and No Accountability – Do you have any “Seven-Percenters” at your Company?
My name is Robert Curry, and I am an Author, CEO Coach, Keynote Speaker, and Turnaround Specialist. Over the past 20 years, I have worked with more than 70 companies taking their businesses from Loses to Profits.
Please click on the links below to read my other articles like Poor Leadership and No Accountability.
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I have recently published two books about turnarounds: “From Red to Black – A Business Turnaround” and “The Turnaround.” Both books are true stories about turnarounds of real companies that I have turned around during my career. In both books, I have shared all my Profit Improvement Recommendations (“PIR’s”). PIR’s helped to grow sales, reduce expenses, improve cash flow, and most importantly, strengthen the management teams.
If the information in this article Poor Leadership and No Accountability! helps you, your family or a business associate, please email me at bob@ceorsc.com and please share the story with me.
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