I love reading real stories and then posing questions about them. I did that with various business articles I read very early on in my blogs. In this, I want to try and get inside various scenarios and ask what would I do differently. With that said… here’s another one…

What happens when you take a company that had lost a ton of money, re-build an entire team, and turn a profit in two years?

For me, my reponse to this scenario would be to seek to then sustain that profitability, look to build on what was established, and therefore begin to see a pattern of profitability.

For others, they would say that that was an incredible feat. I think they would also agree with my response in then wanting to see a pattern of profitability.

Often times in the business world, people can get greedy. And, if they are completely disengaged from reality, usually, their decisions to strive for more are not with sound minds with regards to what makes an operation tick. Now, let me be clear… I have no problems with making a profit. I am a capitalist and believe in the free market. So, I don’t believe that making a profit is a bad thing, unless it entales one losing their soul. But, there is nothing wrong to wanting to increase that profit once profit has been made. Who among us doesn’t want to continue to improve?

But, what happens in the case of this initial statement when seeking a pattern of profitability after being a perrenial bottom line loser is not the first choice?

Too often. there is a complete disengagement from the people at the top as to what it really does take to be successful. In the case of this scenario, it would appear that it was the team that was assembled would have played a major role in moving the company to the black. It would also appear that the team assembled were all working well together and operating within their strengths. (Quite frankly, this would be a dream scenario for any company. It reminds me of the team I once got to work with.)

So, what then was the response?

“Next year… let’s make a lot more than last year. And, to do that… you will need to cut payroll.”

┬áNever mind that the very people you are cutting are the very ones who played critical roles of moving you from very red to black…

And there lies the problem…

Too often, the ones calling the shots have no idea the power of the ripple effect. They think that to get to point C, you simply dismantle everything that got you to point B. But, what they don’t realize is that in doing this, very rarely does it work. Matter of fact, not only will you generally not make it to point C… you will often times find your way back to point A. Now, if asked, or at least those of this scenario, I am quite confident that it is not seen that way. In this, there is a misperception in that there shouldn’t be a problem then to have 2 or 3 people then take on the extra load of 4 or 5 people.

To some, this is not seen as dismantling. It is simply seen as reorganization to become leaner and meaner.

But, ask those who are taking on the extra work? Take a look at what this does to morale? Take a look at what this reflects as to how ones reward a profit? Remember about what I said about being back to point A? This always leads to a reduction of productivity when seen within this type of scenario.

Again, don’t get me wrong… unfortunately, there are times when you do need to cut payroll. But, as far as I can see from this scenario, there was no reason to. Matter of fact, there was every reason to build on what was already established. Therefore, seeing a pattern of profitability was indeed a real possibility. And, quite frankly, if kept in tack, there was the strong potential to even outperform what was desired in the first place. (Oh, the irony of it all.)

In my book, this is called lack of foresight and unfortunately, foresight doesn’t seem to be all that common at times. So, you’re left with knee jerk reactions that turn the ripple effect into full blown tsunami’s.

So, what does this all lead to?

Lack of credibility amongst your workforce. Lack of trust and respect amongst your workforce. A dead end.

Unfortunately, this rarely matters. Too often, leaders are so disengaged from reality that they don’t even see the true fruits of their decisions. Because, their response is to keep making decisions, keep making changes, keep asking for more when all along… maybe it is quite simply them that need to change. But, pointing fingers is always much easier.

So, why don’t they change?

My thought on this is… as Max Lucado once wrote…

The heart of the matter will always be… the matter of the heart. From first glance, some things are never explainable. They don’t make sense. But, there is always sense or lack thereof present. There is always more than meets the eye. Generally, I leave that discussion and judgement up to God.

But, what motivates leaders to think this is leading?

Are they comfortable? Are they arrogant? Are they inept? or, are they just plain wrong?

I don’t know. But, often… the answers to sustainability and to seeing positive patterns of profitability are found in the very ones leadership seeks to squeeze or toss.

What we need are leaders that see the value of their people. What we need are leaders to know the very names of those in picture frames upon the desks of their people. We need leaders that understand the importance of providing vision, for without it… businesses perish. We need leaders that understand in offering clarity, it IS the antidote to anxiety. We need leaders that truly do, offer leadership and that without it… there is chaos.

We need leaders who see people as heartbeats and not as numbers. We need leaders who themselves are open, authentic, approachable, teachable, and reflect humility. We need leaders who see the power of the ripple effect.

For, it is that ripple effect that will either way reach those far distant shores. But, either everything in its path will be destroyed or… will be lifted up. But, it all starts with them and knowing the stakes. Because, once you flip that switch.. the lights are on.

What type of ripple effect are you caught in? Are you riding the wave or caught in the undertow?

Just a thought.

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2 responses »

  1. Keith Daugherty says:

    Gunnar- Profound, passionate, stemming from a world where profitability is a hungry lion, competent employees and team members are the gladiators and hurt is just another fact of life in the coliseum of business.

  2. […] why is that so difficult? In a recent post, I have talked about the power of the ripple effect. Too often, in businesses, people don’t […]

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