Company Politics and Mismanagement

Arrows going in multiple directions

Are Internal Company Politics Costing Your Company Business?

Company politics, particularly in family businesses, can be debilitating; causing management and staff alike to focus, not on the market and the job at hand, but on the ‘dysfunction’ happening internally. Can internal politics cost a company revenue, business and long-established customer relationships? It most definitely can. In fact, it happens all the time.

Most companies think internal politics could never actually cost them an order or a customer’s account. These are the companies that think cooler heads will prevail and the right decisions will be made. However, it’s not about the politics itself as much as it about time. Delays in business are costly. It’s the speed of response that wins the day. Companies that have internal strife, and can’t move forward, provide that all-important window to competitors. By the time these companies come to their senses and make the decisions and changes that should have been made long ago, it’s far too late. Customers have no other choice but to move on.

Perhaps it’s best to start by understanding why politics are allowed to take hold within certain poorly managed companies. First and foremost, the primary reason a company allows politics to dictate decisions is that the company is unable to measure performance against well-established benchmarks and key performance indicators (KPI). In fact, it’s those companies that don’t have a plan, and don’t have the means or willingness to track progress against the plan, that ultimately fall victim to internal politics. When you combine the inability and unwillingness to measure performance with a management team unable to make tough decisions, then you have a recipe for disaster.

The Causes & Effects of Bad Management!

Managers make or break the workplace. An inspiring manager motivates employees and creates an environment where creativity and collaboration thrive. Poor management creates a toxic workplace where it’s difficult for workers to shine. Bad manager behaviour can be a personality issue and the result of hiring people who don’t have the interpersonal skills to be managers in the first place. Also, lack of management skills can be the issue, and devoting resources to training can go a long way toward alleviating the problem.

Effects of Poor Management

When a business is managed poorly, this ineffectiveness reverberates throughout the organisation. It takes an especially heavy toll on employee morale, resulting in inferior work from workers who would often rather be engaged and productive but have inadequate incentive to perform optimally because their efforts won’t be recognised or rewarded. Your employees are the face of your company, and when their morale is low because they are working under ineffective or discouraging managers, your customers will be able to see that they aren’t engaged in their work or enthusiastic about your products or services. An image of employee satisfaction cannot be faked because customers sense insincerity and false optimism. In addition to simply failing to represent your products in ways that appeal to customers, disgruntled employees create a negative image of your company as a whole, representing it as an unpleasant place to work.

Ineffective management increases employee turnover, especially alienating the workers you’d most like to keep, those who care about their work and can easily find employment elsewhere because of their experience and work ethics. Unnecessary turnover costs your business because you need to devote the resources to hiring and training new staff who may also be unlikely to stay if they’re being supervised by the same difficult managers. Employee turnover is also expensive because inexperienced workers aren’t able to see the big picture and make quick, thoughtful decisions that can come easily to more experienced staff.

Poor management can also cost your business money through faulty systems and unnecessary mistakes. Managers are responsible for scheduling. If you are overstaffed during slow times, you can incur losses due to bloated payroll, and if you’re understaffed during busy times, you’ll fail to leverage potential sales opportunities. A good manager knows the quirks, skills, strengths and weaknesses of individual employees and knows how to draw on these advantages and avoid potential pitfalls by assigning tasks accordingly. Conversely, poor managers waste opportunities by assigning the wrong job responsibilities to the wrong staff, hindering productivity and creating bottlenecks.

The greatest thing about company politics and poor management is that you have control to change personnel ethics. Introducing best business practices does not need to be a daunting task.

Let AAA Consulting help you to prepare a business policy and employee specific job description. Contact AAA Consulting for more information.

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