While most CEOs build their careers in an area of tactical expertise such as finance, engineering, development or sales/marketing, very few CEOs build their careers on human resource skills. Yet, with every promotion, they get deeper and deeper into management, and their management and leadership skills become critically important to their companies’ ongoing success.
It is a basic fact – most CEOs advance in spite of their employee management skills, not because of them.
As a result, many CEOs, especially those who are also entrepreneurs, lament their employees. I hear them complain about their employees’ lack of initiative on projects, wishing the employees would “own it” like they would. The employee problem shows up in every single aspect of a company, and it is no secret that a failure to manage employees can sink even the most successful company.
- In finance, poor employee management can lead to inefficient policies, wasted money, and a lack of fiscal control and reporting.
- In engineering and development, employees control the end product, so when they underperform, you can end up with a product that fundamentally misses the mark, fails quality tests, or even more devastating results.
- In sales and marketing, a single sour employee can taint the entire customer-facing end of your business, poisoning not only your other employees, but your customers as well.
You need only look at the recent auto manufacturing woes to see the devastating impact of poor employee management. General Motors issued 44 recalls in just the first six months of 2014, covering 17.73 million vehicles here in the United States, and in excess of 20 million around the world. Its previous recall record was 10.75 million vehicles in 2004.
Mary T. Barra, GM’s CEO, blames the recalls on a corporate culture leading to a “pattern of incompetence and neglect,” and vowed to change the culture through management initiatives. A report she delivered cited a number of troubling employee behaviors, including the “GM Nod,” or situations in which employees appeared to nod in agreement that action should be taken, then did nothing. Another disturbing observation was that employees would frequently assign blame and responsibility to anyone but themselves.
The direct costs to GM as a result of the mistakes made in engineering, development, and manufacturing, are astounding. But the full impact also needs to take into account the impact on GM’s brand reputation, its ability to sell cars in the future, and increased government regulations as a result of the failures.
GM is an obvious example, but every single CEO today is facing some form of a chronic problem in business: managing employees is possibly the most important part of your job, but it’s also the one for which you are least-qualified.
How do you manage this problem?
1. Open your eyes
Sticking your head in the sand and focusing on the areas of the business with which you are already comfortable is not going to solve your problems long-term. You need to open your eyes and become aware of the employee management burden facing you.
2. Take stock
Take a long, deep look at your organization. Investigate every department, manager and team. You need to get a feel for what is really going on in your company on the employee level. Evaluate each human element and identify the biggest problems and opportunities.
3. Listen
Talk to people within your organization and at all levels. This is the idea behind the show “Undercover Boss.” The CEOs almost always learn more in one day of working alongside their employees than they could by hiring 50 consultants to hold employee interviews.
4. Become a leader
Once you have learned more about your organization, become the leader it needs to succeed. If your employees are undisciplined and disorganized, then they need structure and organization. If your employees are unmotivated and discouraged, then they need to reconnect with the mission, vision and values of the company. Leadership is not a one-size-fits-all situation. Each company, department and team might require a slightly different approach. It’s your job to figure out the best approach.
Yes, your employees might feel like an overwhelming nightmare that you don’t want to deal with, but rest assured that if you don’t deal with them, you will fail as a CEO. On the other hand, if you apply your skills to figuring out how to be the leader your company needs, there is no limit to your potential.
Virginia Ginsburg
Virginia Ginsburg, founder and chief consultant at Swell Strategies, supports small business owners and entrepreneurs in growing their businesses. She has worked with more than 100 entrepreneurs over the last 10 years from start-ups to businesses more than 30 years old. Virginia’s clients are highly creative and passionate, and have built excellent businesses in diverse industries including technology, consumer goods, and business-to-business services. She supports them in the areas of finance, hiring and managing employees, marketing and sales, and organizational structure. Virginia holds an MBA from the University of Southern California.
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