Diary of a Small Business With Problems — You Can’t Make this Stuff Up!

Following is a diary of a small business with problems. Having owned and operated my own businesses, consulted with, coached, studied and written about other companies for more than 30 years, I recently became aware of a business that sets a new standard for dysfunction. This company generates $50 million+ annually, employs approximately one hundred fifty people working out of two locations within twenty miles of each other. The business is a retailer and service provider selling and servicing franchised products to both the public and commercial businesses.

The company does not just have a few problems however, is severely dysfunctional, in my opinion. The owner/operators who run the business themselves are flagrantly abusive. It can be said that they are equal opportunity abusers, since they treat most of their employees, customers and vendors; with equal abuse!

Problems At the heart of this small business with problems, without any stretch or exaggeration, are the owner/operators. These two people are the adult children of their deceased parent who founded the business more than twenty years ago. One of the first issues brought to my attention suggesting dysfunction, were multiple reported incidents of customers urinating on the floor of the company restrooms. Turnover is another symptom. The company has an employee turnover rate in excess of 400% per year. Another symptom of the owner-driven dysfunction is their propensity to micro-manage everything. The owners spend little time, if any, creating value for their business or to recruit/hire intellectual capital. Instead, they are consumed with monitoring and keeping the temperature in their facilities at 65 degrees during the winter. Employees are required to file requests with the owners for all supplies including pencils, pens and legal pads to paper towel, toilet tissue and soap for the restrooms. Another micro-management practice is to frequently and secretly listen in on employee telephone conversations. Requests by employees to be trained on office systems are routinely denied. There is no cross-training and employees are left to figure things out on their own. When daylight savings time changes occur it takes weeks for the company’s telephone system to be updated, since no one knows how to do it. In the mean time, inbound calls for the first and last hour of operation go unanswered. It has been reported that the owners praise themselves publically for doing “whatever has been necessary” so that former employees are unable to receive unemployment compensation.

More Problems & Issues
The owners set the standard. Their disrespectful and rude behavior toward employees has become contagious, as evidenced by how most employees act, with the same extreme behaviors, levels of rudeness and lack of respect toward each other. During my entire professional business career, I have never experienced behavior like this between employees acceptable to an owner, until learning about this company. Often, the owners and office staff sneak into their offices without greeting anyone. Then, (because they avoid turning their office lights on) they won’t respond to being paged or answer telephone calls from their internal customer/employees, as if they haven’t arrived at work yet. Introductions of newly hired employees are rarely made. It is even obvious to the casual observer how often these disgruntled employees sabotage the business every day. Only a handful of employees even have voice mail boxes. However, most of those routinely let their boxes fill up and don’t or won’t answer or return calls to other employees, customers or vendors. Every day, virtually every employee says in one form or another how they hate coming to work. Sales and back-office employees routinely witness their employer’s abusive language, yelling and uncalled for verbal attacks at vendors. Employee insurance benefits are so poor that most employees refuse to participate. The business is open six days a week (except for two Sundays a month) from 7:30 am until 9:00 pm with the only paid holidays being Christmas, Thanksgiving and employee birthdays. There is no payment available to employees for sick time. A snow day is determined when the local news reports that the city public school system is closed because of weather. However, at this company, no employee is paid unless they show up for work. Frequently, though not always, pay checks to sales people are late and are laden with errors; always in the owners favor.

Still More Problems & Issues

For a brief period the owners surprised everyone by recruiting and hiring a highly qualified, successful and experienced, servant leader for the position of general manager. This person was exceptionally well liked and most employees thought this manager’s arrival was the dawn of a new day. However, the general manager, whose compensation was based upon profitability, resigned after only ninety days. It was reported that this (former) general manger had to leave when the owners refused his request to increase the visibility of the products they sell and service in the company’s advertising. Apparently there was a dispute over the priority of media space and time given to product in the advertising vs. the presence of the owner’s pet.

Problems & Issues Create Tension
During the months since the well-respected general manager resigned, there have been three subsequent sales managers hired and fired. One of those sales managers was observed by both employees and customers beating up the top salesperson (for reasons unknown, even today) while being egged on by the sales manager’s assistant. The person who reported that a fistfight was in progress (on the sales floor) to the owners, was berated and told by one of them that their own activities would from that point on, be under the owners magnifying glass.

Tensions, like these are almost always symptomatic of poor and or, ineffective leadership skills and culture in the workplace. In my book Getting the Fish to Swim to YOU & Keeping Them in YOUR Boat… I describe how culture exists regardless of whether or not it is intentional. I further explain how and why “Culture is civilization in the workplace.” Unfortunately, most business owners, including the ones featured in this article, lack the vocabulary to define the culture they have, let alone the one they’d like. Business owners/leaders and managers must realize that it is the culture of the organization that will drive, determine and define the success of a business. In the book, I also explain “that mission, vision, value, and purpose statements are only effective when anchored by promised behaviors.” Failures, like the ones described, destroy the credibility of the leadership.

I want to acknowledge that owners of a business reserve the right to be dysfunctional, abusive and even stupid. However, it is so difficult to understand; 1) Why wouldn’t owners of a business with such valuable assets want to accept help to prevent further deterioration or even loss of their business? Perhaps these owners claim to be victims of our culture of excuses, blaming everyone else for their lack of leadership skill and poor performance? Certainly there are proven consultant/coaches they could reach out to if they weren’t so blinded by their own ineptness. Or, 2) why people continue to work for such employers? That may have to do with the challenging job market. Or, perhaps, as many psychologists suggest, some people are simply attracted to and have great difficulty leaving abusive situations.

Does this sound like any business you’ve ever heard of or worked for?

About Alan

Alan Adler is an executive coach, speaker & author.

05. July 2011 by Alan
Categories: Business leadership, Customer Experience, Human Resources | 2 comments

Comments (2)

  1. Hi Alan…
    In the past I was employed at one of these types of companies. The owners operated as if they were God… Their behaviors seems to say ” we hate our customers, we hate our employees.” I believe they enjoyed the power of being OVER others. So Ego-driven!. 7 years later (after I left) they are still in business today. A-M-A-Z-I-N-G! Still not a soul enjoys working for them or with them. They do make a good product though. UGH! I thank God everyday… that I am not self employed. I can be a hard boss (on myself) but I’m never down tight cruel.

    • Thanks Diane for your comment. You point out the struggle many employees have. It amazes me the degree of hubris (arrogance) many senior managers demonstrate. Best selling business author Jim Collins suggests that in almost every case where a business falls out of “greatness” the fundamental reason for their fall is hubris. If they could only CONNECT THE DOTS, they might understand that a healthy culture insures performance, profitability and added value. While I find it sad, I go back to the famous axiom, “you can lead a horse to water but you can’t make it drink.” On the flip side, thank goodness for the people who do get it and consistently find their organizations listed in “Fortune Magazine’s” annual list of company’s where people most like to work!