Companies want increased sales and profitability; in essence they want to “move up”. However, there are times when a leader should deliberately keep the company in a maintenance mode or even retrench. There may be several reasons to do this but a savvy leader will know that to move a company forward, it may be critical to take a half a step back – to reconfigure equipment; to not over saturate the market which could cannibalize existing products and/or services; or to re-evaluate a business strategy.
The problem with all this is that leaders usually have to answer to others including Board of Directors, shareholders, owners, and even employees. When a business scales back or is discontinued, it may be perceived that a leader did not have the expertise to “move it up” and thus failed. For this reason, leaders may continue to run the business or project for longer than it should be, which would actually have a bigger negative impact on the bottom line than if they had stopped it quicker.
What is the best course of action to determine if a business moves up or out? How is a leader still respected if a business is shut down? There is no easy answer but a leader who is confident, and more importantly, knowledgeable about all facets of the business (see the T blog on transparency and trust) will likely encounter minimal ramifications. Unfortunately, some leaders review the data on a business and have a knee jerk reaction; they make quick decisions that are not well thought out, or they go into “analysis paralysis” mode and drag out the inevitable.
A better strategy would be to solicit information from direct reports and from the more junior people in the organization. The questions should not center just around what is going wrong but also identify what is going right. There may be ways to salvage the business or possibly integrate it into another. It is also important to keep everyone abreast of the findings to minimize discrepancies of different departments or project teams.
Have you been faced with your business floundering and you could not “see the forest through the trees”? If so, a consultant or a person from a different part of the company could be a good resource because he or she would be objective and hopefully offer solutions you had not thought of before. The key to using someone like this is to keep an open mind and not be defensive. It is difficult to admit when things are not working but a good leader will put their ego, etc. aside for the sake of the organization.
Other “U” words to ponder – understanding, understandable, unity, utility, uplift, and upbeat.