Sunday, 7 December 2014

What happens when your customers and employees start to lose faith in previously successful management?

When management becomes stale
If your customers start to lose faith in your product and your workforce no longer fully believes in the direction your product is being taken, it is obvious you have a problem to address. 

This is particularly crucial if your product has the potential to be the market leader and is being prevented from doing so by poor management decisions, especially when this is also one of the reasons your workforce is not fully motivated. The solution to the problem seems obvious, doesn’t it?

If the same management is enshrined within the whole ethos of your product and past glory but is also one of the main reasons why you still have such a potentially successful offering, it makes the issue harder to address. If it is not addressed, you’ll always be wondering what could have been achieved if action was taken.

However, the fear of removing the management and the possible negative consequences can create indecision. Business owners become conflicted between loyalty and making sound business decisions. They may think the situation is salvageable within the current management structure, but even then, sensitive but decisive action is required to change the status quo.

These situations are often allowed to develop during the good times, as too much power is given to one person and their decision-making eventually becomes clouded, stubborn and narrow minded with no sense of reality. What seems obvious to most is just not on the agenda and when a growing number of people point this out, it makes things worse, because the management tends to want to prove they’re right and almost deliberately do not take the required actions. 

Football often provides us with good analogies and an obvious example is currently happening at Arsenal Football Club. 

Since becoming the manager in 1996, Arsene Wenger quickly turned a struggling team into a winning one and revolutionised football in England. He made the right decisions in the transfer market, tactically on the field and for the image of the club off the field. He became a legend and rightfully so.
Is your management
showing leadership?

He also led the club to financial stability, creating a thriving business and a platform for sustained top-level success. However, in the last few years the silverware has dwindled; world-class players have been allowed to leave and replacements on the whole have been inferior. As a result, the positions which needed addressing have not been. 

The club’s customers – its supporters – have become frustrated and less supportive, the team has lost that inner belief that they are winners and an air of complacency has set in. 

The team continues to entertain and qualify for the lucrative Champions League and the global brand remains strong. However, Wenger and the club appear reluctant to make those key decisions which would make them on top of the world again. 

Sooner rather than later, that lucrative income from the Champions League will not be achieved and it could be a position which is hard to recover from.

It’s almost as if they don’t want real success again (other than on the profit and loss account). Or perhaps Wenger is just so stubborn and blinded by criticism that his judgement no longer has what it takes to be a winner, and nobody has the guts to tell him.

It is made more difficult for the owners, as the team is not showing spectacular failure; the person in charge has brought them a lot of previous success and taken them to the brink of yet more success – but that brink never seems as though it’s going to be breached. 
A couple of years ago we compared Wenger with Ferguson and discussed what skills are needed to achieve success over a prolonged period in your job. It seems Wenger has not really listened to the warnings. It makes interesting reading in hindsight…. Read more here.
Many manufacturers in the building and construction industry face this situation. The longer they wait, the stronger the competition gets, the lower down the market leaders’ table they go and the harder it is to return to that leading position. 

Ask yourself: would you allow the following to happen? 
  • Potential customers no longer consider your product as a viable and preferred product
  • The demand in your product to be reduced, so you sell less product at a lower price
  • Allow your best sales, marketing and product development staff to leave for your competitor and benefit them rather than you
  • Not being able to recruit the best replacements 
  • Your workforce to no longer be as passionate about selling your product
  • Reduce your ability to attract investors and business partners
  • Run the risk of not having the kudos to effectively invest in product development 
  • Lose touch with, and the faith of, your supporters
  • Receive negative trade press and social media coverage
  • Not have the right people to move the company forward
  • Continually make the wrong decisions 
  • Give all the power to one person and allow them to become unaccountable
This is exactly what Arsenal Football Club is allowing to happen and it needs sound recruitment and management decisions to halt the slide. 

What are your options?
The options open to Arsenal are pretty much those available to companies in similar situations:
  • Retain existing management and do nothing
  • Retain existing management but make sure that the business owners/directors are more heavily involved in decision-making for the good of the club, allowing the power of the club to be spread
  • Replace the current management with a new forward-thinking team and structure best suited to adapt and succeed in the modern game 
Key attributes needed
to succeed
Clearly, all three have their risks, but choosing the first option demonstrates weak executive management and is likely to end in disaster. 

The second option could be hugely successful but may result in apathy and negativity of a different kind. However, having a system in place at the outset, in which the manager has the flexibility and time to do the job on their terms but knowing that they are both accountable and not the sole decision-maker, is paramount for the future. This structural change - that may even include recruitment to support the management - is a viable solution. 

One of the main issues that frustrate Arsenal supporters is that the funds for investment in the playing staff are available and it’s not as though they are fighting against the odds to survive. There seems to be reluctance from the management to spend, even in areas requiring attention. You wouldn’t appoint a novice sales person in the most demanding and competitive geographical area or overload a sector with too many sales professionals, allowing none of them to thrive, but this seems to be Arsenal’s policy. Budgets need to be spent in the right places at the right level to improve the business and achieve success.

The third option needs to be done sympathetically and with respect to the success of the previous management and full understanding of the potential downside of the decision: loss of experience and also the loyalty of existing staff to the person being replaced. Finding the right person to take you forward is even more vital and potentially more difficult.

The board and owners of Arsenal are currently in this difficult dilemma but seem to be dealing with it by ignoring it, or perhaps they are just happy with being “the almosts” ... that doesn’t have same ring as “the invincibles” does it?. Show some ambition please Arsenal, from top to bottom.
Things can change in football very quickly and the article we did on the importance of confidence in the workplace, again relating it to Arsenal and Wenger clearly shows this. It also, looking back, shows how it needs to be sustained and built upon - one of the main problems at Arsenal today.
If you are facing some key structural decisions or need to appoint executive level management and require independent and professional advice to ensure you find and appoint the right person for your company, please contact us on 01480 405225 or visit our website at  p.s. the board at Arsenal is very welcome to pick up the phone...

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