Another title for this article could be, "Trust me". A phrase that makes any person in business a little wary of whomever makes the statement. Oh, but how we tend to overlook the red flags. It happens everywhere and on a very regular basis.
Since only a few successful corporations are one man shows, where only one individual does everything, we are required to delegate various tasks. We have salespeople to relate our product/service to potential customers. We have financial people to relate to the IRS and others. We have employees who produce our product, whether it be professional services or a manufactured item. Just about any reasonably successful business has alternative suppliers. We even have corporate officers and boards of directors to assist us in achieving both the long and short term goals of the business. However, most organizations have, at one time or another, experienced a situation where they find themselves dependent on only one individual. Usually the problem seems only short lived, but it never really goes away unless approached with finality.
The best way to explain the problem is with a short example.
Five equals one?
Five individuals get together to form a business, each with their own unique, but slightly overlapping, expertise. All of the necessary components are there, ranging from corporate management, to sales, to production management, to production. Of course, the only thing that was missing was seed money. All five could forego income until cash flow was realized, but the rent had to be paid along with the phone bill. After pooling all of their resources, the five of them had come just $10,000 short of their needs. Time was wasting and for each week they delayed in the start-up, the shortfall grew. The "President" of the group knew that a concise business plan would be required and immediately started to put the pieces together. Since the start-up was so time critical, he decided that all five of them would have to work in parallel towards raising the additional sum while the business plan was prepared. The salesman was chosen to lead the hunting expedition for potential investors/lenders including up front payment for services by large clients. Little did any of the other four know, but the salesperson had an ace up his sleeve. One of his long-time customers would loan only to him the $10,000 that the company needed. When the president attempted to arrange the loan so as to involve all five of the participants personally, he was accused of being untrusting. The other three, with the coaching of the salesperson, were led to understand that if they didn't want to take the additional risk, why should they. After all, why look a gift horse in the mouth?
The loan was made to the salesperson who, in turn, loaned it to the company. The business began and was an almost immediate success. Contracts were acquired based almost entirely on the reputation and contacts of the production trio and the company's business to business approach to service and support. Within the first year, it started to become very obvious that the salesperson was NOT getting any new customers. He was also balking at hiring any salespeople to assist him. Things were beginning to reach a critical mass with future growth. There had to be a change. And it had to be soon. The loan payments were interest only with the principle to be paid in four equal parts. The company was making all payments on-time. The production folks were working 20 hours a day and the president was getting very close to closing a financial deal that would fund their growth over the next five years, but they needed more new sales to get "over the hump".
Five equal stockholders, but only one had loaned the company money to get started.
Guess who wasn't pulling their weight.
Guess who wouldn't take the hint?
Guess who needed to go?
Guess who wouldn’t go? |
It took another three years of scraping by, of watching growth opportunities pass them by, before they could split out the salesperson. Since he wouldn't quit and constantly created ill feelings between the founders, they all quit until only he was left.
He got just what he wanted. He is in charge of a one man company that represents other companies. The others? Well, they won't soon go into business again.
Have you ever wondered why some customers will stay with you ONLY if a particular salesperson represents the account? Why is it that a particular department's production would go down if the manager is changed? What is going on when the vendor will only deal with a particular individual in your organization?
Where do some people get the time and resources to undermine each other? Isn't the competition outside of your company? Isn't that just a little counterproductive? Maybe it is just human nature.
No matter what the foundation is, it is extremely difficult to identify a problem such as this, in any type of organization.
Conclusion:
There is no such a thing as an indespensible employee, stockholder or board member. If you find that there is absolute dependence on only one individual in a critial situation, spread out the responsibility and the authority. This is especially true if the individual in question appears to have created the situation themselves.
How do you keep from relying on one individual?
How do you undo a situation that has already begun to fester?
You probably need some assistance.
Contact I S E E as soon as possible.
We can help!
