Many Business Owners do not know how to hire and manage a strong management team.
FOR MANY YEARS, I HAVE BEEN DOING TURNAROUNDS OF DISTRESSED COMPANIES to make my clients’ businesses profitable. I believe that the main reason companies are distressed is that the business owners do not know how to hire and manage a strong management team. Many business owners do not realize how important it is to have and maintain a qualified team of managers to oversee their employees. Most entrepreneurs believe they are doing a decent job of building a quality management team to lead their companies. But there are many reasons my potential clients have never achieved their goals before engaging a turnaround specialist. Some of the explanations are:
- Ownership and management do not know how to recruit and hire top performers.
- Managers do not keep their superstar employees happy to prevent them from considering leaving the company to work for another employer.
- Unfortunately, many companies have poor financial and operational reporting available for the president and the management team. Good reporting would help them better understand which member(s) of the management team and their employees are doing a great job and who are the nonperformers. Owners do not understand the value of spending the right amount of money on hiring a reliable, qualified, and experienced cfo consultant.
Those are probably the top three reasons and the most important, but also:
- In many companies, the owners have relationships/friendships with the members of the management team. Therefore, they do not objectively evaluate their performance and demand better results from them or their organizations.
- Many business owners are too busy working in their business rather than on their business. This issue stops them from being aware of how vital a professional-level management team is to the success of their company.
- A high percentage of business owners set the hiring salary below the market range for the position and then have problems finding qualified people to hire at the lower wage.
- Many business owners are nonconfrontational and “stick their head in the sand” rather than deal with their problems.
- Many entrepreneurs are too naive to understand how stronger and more productive managers could impact the success of their company.
- Some business leaders and members of management teams are poor communicators. Poor communication skills by senior managers of the organization cause vulnerable relationships with their team. This problem also results in a disconnect of the manager from the day-to-day activities in the company.
- Many entrepreneurs do believe that their company’s profitability depends upon staffing their organization with top-tier employees, and partnering with a good company like Ideal Teams can make all the difference. The unfortunate issue is very few middle-market, and smaller companies (companies with $25 million in sales or less) have the talent on staff to recruit, interview, hire, onboard (help a new hire adjust to social and performance aspects of the position), and maintain those quality employees. Therefore, it’s better to consult temp agencies for staffing.
- Many companies have business owners who are not knowledgeable about managing a company using the best business practices. This problem sounds like a straightforward issue, but it is not.
- One of the most common reasons businesses fail is they do not know their customer, their market space with their products or services, or both.
- Many business owners do not know how to read a simple financial statement. Most business owners manage their company by the balance of cash in their checking accounts.
Numerous companies have, for example, an electrician or an off-road supply expert or an HVAC guy managing the business rather than a “businessman” operating the electrical firm, off-road supply business, or HVAC company. The HVAC guy knows how to install an air conditioner, but he may not know how to manage a business. The electrician knows how to wire a home, but he may not know how to run his company. I am rarely hired by a company that has a leader who is a “businessman” managing the organization. Most of my clients have been senior executives who were incredibly good at their trade (HVAC, engineer, etc.) and decided to start their own companies because it looked so easy. Unfortunately, if the owner does not have any business education or experience, he ends up hiring someone like me to turn around his distressed business.
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 75 companies taking their businesses from Loses to Profits. Click on the links below to read other articles like: “How to Hire and Manage a Strong Management Team?”
Work Should be More Fun Than Stress!
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.