After spending a lifetime in Fortune 100 companies, business associations and private consulting work, I appreciate the complexity of running an organization and why some fail for easily diagnosed reasons. Most are not product- or issue-related.
It’s often the differences in people and how they translate into poorly aligned staffing that is the biggest difference between well-run and mismanaged organizations. If you believe the adage that “people are policy,” these observations on personnel and structure will ring true.
1. CEOs: There are entrepreneurs who start small companies that grow into large ones. And there are managers of large companies who never started one. These are not the same people, although there are exceptions. Those managing big corporations could rarely have started the one they manage, and most entrepreneurs do not have the DNA or interest for managing big companies or major growth.
2. Attorneys in corporations: There are lawyers in business, and there are people in business who went to law school. The first group is primarily focused on avoiding risk. The second group is primarily engaged in a bigger bottom line while managing acceptable risk.
3. Franchisees vs. franchisors: Franchisees are typically small-business owners that pay a sales royalty to operate under a brand. Franchisors are larger businesses primarily interested in brand reputation and selling more franchises. Regardless of the signage, they are not in the same business.
4. Labor relations vs. human resources: LR professionals are typically engaged over confrontational issues with unions and labor contracts. HR professionals are engaged in accommodating employees through benefits, training, discrimination issues and compliance. These two different skill sets and interests are not usually found in the same person.
5. Trade associations vs. coalitions: Trade associations typically represent only the bigger interests of the industry. They typically seek common denominator positions so as not to offend any part of their membership. Business coalitions are smaller. They are formed around a narrow set of issue positions not embraced by the broader organization. The groups tend to be quietly dismissive of each other.
6. Marketing vs. sales: Marketing can be seen in every media medium. Marketing pros have charts and graphs that capture consumer trends, demographics, and media opportunities. Salespeople are reliant on marketing, having pre-sold whatever they are selling. While often in the same department or person, they are not the same skill disciplines.
7. Community relations vs. public relations: Professionals are often tasked with both responsibilities. The community agenda is focused on establishing a positive preemptive face of the organization through nonprofit donations or active engagement with charitable organizations. The PR agenda involves broader communications and often in defense of a brand or industry against adversarial interest groups. Media interaction to contrast what is being marketed by adversaries is required. It’s difficult to find a high skill level for both agendas in the same person.
8. Crisis management vs. crisis avoidance: CM is typically not a dedicated staff function. It is often evidenced by a predetermined list of phone numbers with responsibility for whom to call if certain issues arise. It’s the “Break Glass and Pull” equivalent in anticipation that someone(s) who never handled this problem will do so effectively. Crisis avoidance anticipates problems that make managing them easier. That person will be tracking interest groups that typically attack over predictable issues. Avoiding them by making the company a smaller target or more difficult to hit is the goal. (More art than science in that function.)
9. Hiring vs. firing: Unless a company has a valuable patent, the most important asset is talent. They are the ones who establish consumer/client loyalty and reputation. Yet most hiring processes are not that demanding. Employers often hire round pegs for square holes. And despite bad hire decisions, firing is often a legal morass, so hard decisions are avoided. There are also previously good hires who have lost their edge. They are often burned out. But they “quit and stay” because they can’t afford to leave. Having a strategic commitment to regular evaluations of staff and assignments reveals opportunities.
• Rick Berman is president of RBB Strategies.
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