Poor performance (by the company)

As the need to reduce cost looks at cutting staff companies look at individuals’ performance and specifically poor performance as a way of managing people out of the business.

This method avoids making announcements to the stock market about compulsory redundancy, that could have a negative affect on the share price or reveal a weakness in the longer term success/strategy. However it isn't aways the individuals fault that they are in a position that appears like they have become poor performers.

This is how it works: -
1 Someone that can talk a good job and sell an idea turns up making promises about an investment, product launch, acquisition, strategy or other course of action.
2. Lets say it is to acquire another company. The benefits will be that it compliments our existing services, customers, markets, it deliver quick growth and new opportunities new revenues. It moves us up the value chain, makes us less of a commodity and gives us a competitive advantage. - The list of MBA speak that never seems to get pinned down is seeming endless.
3 They sell it big. Large numbers mesmerise the "powers that be", because they have targets of their own to grow revenue and their bonus depends on it. They don’t really understand the proposition, can’t be bothered with the detail and do not get the claims validated. In the good times they ride on the fact that they will make money anyway.
4 The person that originally talked the job, will now seems to have three or four advocates from different disciplines that don’t understand the proposition but can add some verbiage that seem to provide independent validate the proposition. Of course they are not independent as they seek to carve some form of personal gain.
5 The project is approved, the plan is put in place and the contract is negotiated. The implementation may be done by the same people or handed to someone else. Ongoing operation will normally be handed to someone else.
6 Anyone that questions the proposition or the contract will be told that “you just don’t get it”. The objectors will not necessarily want to tell the King (their bosses) that he is naked. Those that do are often dismissed as just being negative and maybe even jealous.
7 Based on the promises made the people that are brought in to deliver and run the ongoing business are given targets. The forecast was unreal and the targets are therefore are unattainable.
8 The original group of advocates will often have reformed, based on the success of their pervious exploits (there ability to see the future and develop new business), in another department, division or company.
9 Those left behind unable to meet the targets are labelled “poor performers” and managed out of the company.
10 Everyone is left with the feeling that it was a good idea but we just couldn’t make it work…
11 No boady ever seems to want to learn, pull out the original case, see where it was wrong or where it went wrong and take steps to avoid the same pitfalls so we end up back at square (point) 1

In world of an entrepreneur failure is felt first hand. Even if the lesson is not learned the opportunity is there to learn. Sure some entrepreneurs bury their head in the sand, but for corporate managers to do this is negligent. Most entrepreneurs fail several times before they eventually get it right.

In large organisations, the intra-preneur has moved on before their mistakes come to light. This leaves the organisation worse, rather than better off. It also leave otherwise competent staff carrying the can.

Potentially the company manages out these “poor performers” leaving the real culprits behind. Do this across a large organisation and it gradually increases the likelihood of failure.

Managing out poor performers is one thing but recruiting people simply based on who they worked for in the past, what they claim to have done and be able to do, is about as much use as the US visa waving form asking if you are a drug dealer on not… I wonder how many drug dealers have answered yes?

Often capabilities and skills within the company are ignored. The opportunity to develop people, motivate them, for the company to get loyalty as a driver, as well as personal gain are lost.

Is that what happened in the banking world – is the premise that a company has to be geared to be running efficiently sound like the bollocks it clearly was. If anyone remembers the “Trouble Shooter” programme on BBC and the Morgan car factory programme it seems some how justice that they seem managing the credit crises with their philosophy far more easier than Ford or GM et al with their superior financial advisors.