This leadership tip has something in it for managers everywhere, but it’s particularly targeted at those of you with large company backgrounds who have made career moves to smaller businesses that you own and/or manage.
My background is primarily in large scale management of IT organizations. The companies where I’ve worked were places where changing a process or behavior took some time. I always thought I was quicker than most, and action oriented. As a small business owner, I found I had to be much quicker.
I’ll offer this leadership tip in the form of a story. It’s a story of how taking your eye of the ball can cost you money, and worse than that can cost you customers.
My First Small Business
I opened a small personal services business. It was located about an hour from my home office, and with all my other commitments I knew how important hiring the right manager would be for this shop. It took a few tries, but I found one with a good background and references, and she seemed to quickly develop loyalty to the business and to me.
For the first six months we grew slowly but steadily. We were behind plan in terms of customers and revenue, but the trend was up. There were a few staff issues, but overall turnover was okay. I decided to invest a little more in marketing to try and get more new faces in the door.
Over the next three months, customer counts were mostly flat, and average sale was actually down a little. Concerned, I visited the shop a few times more than usual. The people were not as upbeat as they had been. When asked about that, they attributed their moods to less business and less enjoyment of the job. I wondered about seasonality, the economy, and whether I needed even more marketing investment.
Want to know what was really going on? My trusted manager had some personal problems that I had not been aware of before, and was exhibiting some totally unacceptable behaviors:
- Criticizing staff in front of customers
- Intimidating staff, letting them know they were at risk of being fired, and telling them I was out to get them.
- Stealing money by voiding transactions and other means
I’m still figuring out how much money all this cost me, but the money is only today’s problem. The customers I’ve lost are a more serious longer term issue, because many of them won’t be coming back.
When I figured out what was going on, I moved quickly to fire the manager. There were only two problems:
- I was too late, and there had been several months of damage done;
- There was collateral damage. I had to fire two other employees who had adopted the attitude and behaviors of the manager.
Today, I’m working on putting together data to see if I can assemble a case for prosecuting the employees and the manager. An even higher priority, though, is the work I’m doing to recruit and orient new staff and develop a recovery plan for our customer service reputation.
This leadership tip was a painful lesson that I hope never to repeat.