Signs Your Company is in Trouble

Signs Your Company May be in Trouble 

Being in the red is not the only sign of an unhealthy company. An organization’s vision, mission and values need to be in alignment and its employees need to be on board with these guiding principles for a company to be healthy. If you see two or more of the following warning signs, you may be headed for trouble. For the purpose of this post, we’ll define vision, mission and values as follows:

VISION

A company’s vision answers the question “Where do we want to be in a the next 2-5 years? What goals are we trying to achieve? Your vision needs to be specific, clear and communicated to your employees who will be in executing on achieving the Vision goals for the company.

MISSION

A mission statement is specific, clear motivational point of focus that inspires your employees to work towards meeting. Its a principle or value that your employees lives up to everyday. A mission statement is more for the employees than it is for the customer.  Example: Google’s mission is to organize the world’s information and make it universally accessible and useful.

CORE VALUES

An organization’s values are its beliefs and principles that a company practices everyday.  (transparency, honesty, integrity and continual improvement). Example:  http://about.zappos.com/our-unique-culture/zappos-core-values

Signs and Symptoms of Trouble

1. No clear direction, employees don’t understand or aren’t on board with the company vision, mission, values.
2. Too many chiefs, not enough workers, can’t follow through with mission.
3. Lack of autonomy (employees don’t want to make decisions for fear of making mistakes and being fired. No risk, no innovation, no innovation, no reward.
4. Lack of transparency, lack of trust and high employee turnover rate (company has lots of clicks (divided groups).
5. Not investing in employee training/improvement out of fear that employees will get hired away.
6. Management operating in reactive, crisis mode, constantly putting out fires and making bad decisions or not making decisions at all.
7. Unproductive meetings, lots of busy work but no long-term or forward-thinking growth plans.
8. Customers complaining on social media, company vilifying customers and employees instead of being proactive.
9. Too much inventory, under capitalized.
10. Good sales volume, but low margins and/or expenses growing faster than sales.

As much as an employee needs to be proficient in his/her job, he or she needs to understand the company vision. Employees need to truly understand and believe in a company’s core mission. They need to know that their day-to-day tasks and activities, and how they go about their jobs will uphold the company’s mission statement. A company’s core values may be to serve customers, but it’s actually more important that your employees stand behind them because if they carry out their duties accordingly, it will fulfill the mission statement.

If employees are hearing what’s happening next through the grapevine, your company has serious communication issues. There are some areas where confidentially is necessary however, if you consistently keep your staff in the dark and only share information on a need to know basis, don’t be surprised if apathy is the norm in the company culture.

If the company culture lacks trust, or does not give employees a sense of autonomy to satisfy customers, there is likely to be high turnover and low customer and employee satisfaction. Taking calculated risks is an important part of growing. Trust that you have trained your staff well, and have faith they will get the job done. If things go wrong, don’t talk crap about the customer, even if they are wrong. You may think they deserve it but you better check this attitude at the door as it can quickly permeate across the organization.

Being under capitalized are signs that your company may not be financially or operationally fit. There are certain expenses involved when running a company. Check to see where expenses are unreasonably high and can be cut. Find out of there are opportunities for cost-savings within each department. For example, are you purchasing too much of a product that doesn’t sell or too little of a hot seller?

Increasing margins by taking a peek under the hood of each product/category will help you better understand where you are bleeding money. For many entrepreneurs, fixing the financial issues is far easier than tackling the more elusive employee morale and leadership issues. Whatever your situation, I, Shirley, am happy to help. Just drop me a line or reply to this post. I’m all ears!

By: Shirley Tan