The 7 signs that your business is in trouble and what to do about it

Maybe you’ve had a niggling feeling that something is not quite right. You know, that little voice whispering to you that there’s trouble coming but you can’t quite make out what it’s saying or push it to the side.
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Maybe you’ve had a niggling feeling that something is not quite right. You know, that little voice whispering to you that there’s trouble coming but you can’t quite make out what it’s saying or push it to the side.

There are many obvious, and not so obvious, signs of non-performance. It’s essential you recognise these signs and take action when they appear in your business.

Here are 7 obvious signs that a business may be in trouble:

  1. Increased absenteeism
  2. Lower engagement scores
  3. High turnover – both regrettable and welcomed
  4. Silly and costly mistakes
  5. Underachieving across multiple areas – e.g sales, quality control, customer satisfaction, profit
  6. Aggression and conflict, resulting in ineffective and unproductive meetings
  7. Significant lack of diversity and inclusion across all areas of the business

Along with the obvious signs, there are more subtle, hidden indicators of a business being in trouble and these can include the following:

  • Extreme cordiality and consensus, resulting in lack of healthy debate or decision-making
  • Managers who are liked but not respected
  • Lack of innovation and risk-taking – doing things as they have always been done
  • Lack of turnover
  • Focus on the internal environment to the exclusion of the external environment and competitors
  • Employees and managers being complacent and overly content
  • Focus on rules and policies over people
  • Lack of empathy for others
  • Lack of consequences for poor performance and behaviour

These are all symptoms of a business already in trouble. Once you’ve identified these, what you need to focus on is the root cause of the symptoms – poor leadership.

To ensure a thriving, successful and sustainable business, leaders and organisations need to create a workplace culture built on clear communication and core values that their team can rally around.

High-performing and successful teams flourish when organisations exhibit the following qualities.

Clear and communicated purpose

An inspiring purpose is customer-focused, relevant and meaningful, and impacts the world in a positive way. Employees, managers, leaders and customers need to know what their purpose is and be committed to fulfilling it.

A purpose that inspires your team will rarely include profit or revenue. Though sales and profits are the evidence that the product or service is valuable and proof your business is flourishing, it is essential that your company’s purpose goes beyond just the financial health of your business.

Action: Review your organisational purpose. Is it still relevant and meaningful? Does your team know what your purpose is? Does your team understand the vision and are they committed to it? Clarify your purpose in a clear and articulate way and then share it across your organisation with every level of employee.

Defined and understood values

Values define who we are as individuals and companies – how we think, how we behave, how we treat each other, what we will accept and what we do not. Values are more than words on a wall or phrases created during a company retreat. Values need to be believed in, committed to, lived and nurtured. In the best organisations non-compliance with the company’s core values is a sackable offence. Remember, it is your values and purpose that differentiates you from others.

Action: Review your values. Are they still relevant and meaningful? Do your team members understand the values and are they committed to them? Are your values merely words on the wall, or are they the behaviours you live by? Are your values still relevant to your business?

Take steps to bring your values into line with what your business is today. Seek input from your leaders and other levels of your organisation to better understand what your employees believe are the core values of your team.

Strong leaders

Great organisations have great leaders. Leadership is developed and nurtured. Sadly, too many organisations recruit and promote based on technical skill and function excellence with little consideration of leadership competency or inclination. Difficult situations, such as a global pandemic, bring out the best and worst in leaders and many organisations are now seeing the negative impact of poor leadership – impatience, poor behaviours, increased turnover, mistakes, lack of productivity and so on. Leaders are not born great leaders, they become great through effort, study and dedication.

Action: Review and invest in your leaders and leadership programs. Coaching has been recognised as one of the most effective tools to assist individuals to develop their leadership skills and improve their performance, and ultimately the success and profitability of the company.

Celebration and acknowledgement

Successful organisations and strong leaders know how to celebrate success and acknowledge failure. Take the time to say thank you, well done or good morning. Ask questions and get to know and understand your teammates. Find time to laugh and to review what went well and what you can do better.

Action: Allocate time to celebrate and acknowledge each other. Remember, we work with people not robots.

Leaders who are curious and don’t jump to conclusions

As you start to see the obvious – and not so obvious – signs of a business in trouble many leaders jump to enacting solutions. Before making assumptions and spending valuable resources, including time and money, on potential solutions, ask your team what they think. The problem may not be about flexibility or career progression or pay increases. Instead, the problem might be one poor leader, open-plan desks or an aggressive competitor. Taking the time to identify the real issue and tailor solutions accordingly is far more effective than rushing to premature action.

Action: Conduct employee surveys or interviews. There are many organisations who can assist here. Smaller teams or organisations may choose to put together their own simple survey.

Openness, transparency and consistency

As a leader and as an organisation is it important to be open, transparent and consistent. Treat employees, customers and suppliers fairly. Be honest when things are going well and when they are not. If someone is not ready for promotion, tell them; if a customer has had poor service, acknowledge it and fix the situation; if there are going to be redundancies because of business or industry underperformance, communicate clearly. When people are kept in the dark, they make up stories and create gossip.

Action: Create and embed a culture of clear communication, honesty and consistency. Stop cliques, silos and gossip. Read the book Radical Candor by Kim Scott.

If you would like to find out more about how to build strong leaders and successful cultures and stop the seven or more signs of a business in trouble, please contact us here to find out how Peeplcoach can help you and your team.

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