Is dysfunctional management crippling your business?

Every interaction with the customer is critical, presenting an opportunity to either positively or negatively affect a purchasing decision. At the heart of these interactions is the way in which management has selected, trained, and treated their employees.

Dispensing professionals are often perplexed by patients who, despite a demonstrated hearing loss, decide against purchasing a hearing aid. Certainly, there are times in which economics or other valid obstacles play a part in that decision, but we are left to speculate as to how many times that decision is impacted by other factors.

What might those factors be? Educated guesses would include a patient’s lack of trust, inappropriate expectations, or poor communication of the benefits to the patient. There is, however, a more pressing question that should be asked regarding a patient’s decision to forego appropriate treatment, and that is who bears the responsibility when a patient chooses not to purchase a hearing aid? In many cases, the patient will have multiple contacts with multiple employees throughout the process of evaluating treatment options—creating abundant opportunities for the patient to be positively or negatively influenced toward a purchasing decision.

Consequently, a patient’s choice to decline the purchase of a hearing aid may be for legitimate and unavoidable reasons. On the other hand, it may also be linked to “employee failure.” While the term employee failure may sound harsh—even insensitive—it is important that we examine reality with regard to employees and their interactions with our customers.

In today’s economic climate, most business experts agree that good employees are the company’s most significant resource. In 2002, MIT Sloan Management Review reported that “There is a surplus of capital chasing a scarcity of talented people and the knowledge they possess. In today’s economy, that is the constraining—and therefore strategic—resource.”1 Geoffrey Colvin, senior editor of Fortune magazine agrees: “After 500 years or so the scarcest, most valuable resource in business is no longer financial capital. It’s talent.”2

It is becoming increasingly clear that the hiring and management of employees and the development of workplace culture is vital to the success—and often instrumental in the failure—of a company. Specifically, there are four key employee factors to evaluate that bear directly on the success or failure of interactions between an employee and a customer:

1) The employee’s competence.
2) The employee’s attention to detail.
3) The employee’s workplace attitudes.
4) The employee’s commitment to the success of the organization.

Each of these factors can be positive or negative, but—most importantly for our purposes—each can be positively affected by good management practices. Employees must possess the necessary skills to do their jobs well, but consistent performance requires a commitment to excellence and a focus on the details that create a positive customer experience.

Disconnected Employees
According to a 2004 Conference Board Report,3 employee workplace satisfaction continues to decline at an alarming rate. Consider these findings:

• Only 50% of workers were satisfied with their jobs in 2004, compared to 60% in 1995.
• Less than one-third of all supervisors and managers are perceived to be strong leaders.
• 40% of workers feel disconnected from their employers.
• 2 out of 3 employees are not motivated to drive their employer’s business goals.
• 25% are just showing up to collect a paycheck.

The single most common complaint heard from business owners is that employees aren’t committed to the business. This observation is clearly supported by the statistics above. When we consider that management cannot possibly oversee every interaction between employees and the customer, the idea of commitment begins to take on critical importance. Employees, for reasons we will discuss, have the capacity to derail the most resourceful organizations. Even companies with innovative products and services, the best facilities, the largest advertising budgets, and the finest customer support systems can be sorely compromised by one under-performing employee.

Management issues—specifically people management issues—are, therefore, vital to the success of a company. This is particularly relevant to hearing care offices, where professionals are extremely well trained in the technical aspects of hearing care and the fitting of hearing aids, but may have little training or experience in business and people management. For many business owners and professionals, the reality is that they are often too busy “seeing patients” to engage in the development of effective management skills or the training and development of their employees. Still others find that the task of employee training is too time consuming or not a necessary part of their weekly/daily tasks. In the best-selling book The E-Myth Revisited, author Michael Gerber discusses this problem:

That fatal assumption is: If you understand the technical work of a business, you understand a business that does technical work. And the reason it’s fatal is that it just isn’t true. The technical work of a business and a business that does technical work are two totally different things.4

In other words, simply going into business or understanding the technical work of a business in no way prepares an individual for the complexities of a management role. Management involves much more than being “in charge” or having all the technical answers, and it extends well beyond developing business strategy and/or tactics. Ultimately, management is about people. After the planning and organizing is finished, managers have to lead, motivate, and direct employees in the implementation of business objectives.
Sadly, there are employers who do not see employees as a strategic resource or as a critical part of the success of the organization. Instead, they view employees as tools to be used or manipulated without real regard for the personal welfare of the individual. Not surprisingly, these employers usually experience significant employee turnover, rapidly deteriorating work performance, and the inevitable decline of employee morale—but, they view these events as just another “cost of doing business.”

Dysfunctional Management
As described above, four factors exist that may impact the success or failure of any interaction between a customer and an employee. Specifically, what we are interested in is how management can ensure that these factors result in positive experiences for customers. How exactly can management impact these four factors?

1) Hire the right people (hiring skills).
2) Lead and direct those people effectively (people management skills).

Pretty simple formula: Hire good people and manage them effectively! So, why are employees so dissatisfied with their employment experience? Our “formula” seems to suggest only three possible reasons: Either management is hiring the wrong people, doing a poor job of managing their people, or both.

Since employees are clearly accountable for their own actions, it is undoubtedly tempting to simply blame them, and them only, for their mistakes. After all, it is their actions that we are considering, and without question, even good employees who are well-managed make mistakes or experience lapses in their performance due to extenuating circumstances.

Ultimately, however, a significant number of employee failures can be traced to management dysfunction. First, management is responsible for the hiring decisions (controlling who comes into the organization), and second, leadership and control practices are determined by management (deciding how employees are directed and communicated with). It would, therefore, be much more effective to first examine management’s performance in these two areas prior to blindly assigning the blame for all performance failures exclusively to employees.

In the real world, few individuals are naturally equipped to be effective managers. While requisite business management talents include organization and planning skills, it also intrinsically involves critical and varied skills in dealing with people. Unfortunately, individuals are often placed into a management role because of achievement, specialized knowledge, or even tenure, with little regard for their people skills! In addition, entrepreneurs and business owners become de facto managers simply because they own or start a business, often with little or no management training or experience.

Character and Communication Skills Make Great Managers
Many years of observing managers of all skill levels have led me to the conclusion that there are two indispensable criteria that every successful people manager must possess: character and excellent communication skills. In my experience, it is virtually impossible to develop committed and caring employees unless management is trustworthy (character), and employees feel valued and appreciated (communication).

From this perspective, it is easy to see why an organization is a direct reflection of its leaders. Employees simply cannot be expected to act in ways that managers will not. In the worst-case scenario, an employee will either mimic the behavior of the leader (think Enron), or the “disconnected” employee will simply leave the organization or focus on collecting a paycheck. Not infrequently, a manager who does not trust or respect an employee nevertheless imagines that the employee will trust the manager and respect the mission and objectives of the company. This probably explains why 40% of employees feel “disconnected.” An employee who does not trust management, or does not feel like an integral part of the company, will not put the interests of the company first. Conclusion? Place a lot of effort into hiring good people, and once hired, treat them like good people!

At this point, you may be thinking: “Hold on a second! Aren’t we paying these employees a lot of money? Don’t we provide benefits? Employees just don’t appreciate what we do for them!” Perhaps a little history lesson is in order. In 1949, research done by the Labor Relations Institute of New York indicated that what employees wanted most at work was appreciation, followed closely by feeling “in” on things (Table 1). Employers, however, ranked those items 8th and 10th, respectively.

1. Full appreciation for work done
2. Feeling “in” on things
3. Sympathetic help on personal problems
4. Job security
5. Good wages
6. Interesting work
7. Promotion/growth opportunities
8. Personal loyalty to workers
9. Good working conditions
10. Tactful discipline
TABLE 1. What employees want at work. The original research for this list was generated in 1946 by the Labor Relations Institute of New York, but it has been replicated with similar results by Ken Kovach (1980); Valerie Wilson, Achievers International (1988); Bob Nelson, Blanchard Training & Development (1991); Sheryl & Don Grimme, GHR Training Solutions (1997-2001), among others.

As might be expected, employers ranked wages as the item they felt workers cared most about, while employees ranked wages fifth on their list. Is adequate pay an important consideration to an employee? Of course it is; it’s just not the most important consideration. Not surprisingly, these results have been replicated with little variance in each of the last three decades.

A Lesson from NASA
On Saturday, February 1, 2003, the space shuttle Columbia was scheduled to complete its 28th overall assignment in space. Shortly after 8:52 am, Mission Control detected an unusual sensor reading that indicated an increase in temperature in one of the shuttle’s wings. Unknown to Pilot Willie McCool, Mission Commander Rick Husband, and the five mission specialists, a hole had already burned completely through the shuttle wing and was beginning to melt the shuttle landing gear. Minutes later, with the shuttle still 37 miles above earth and entering airspace over Texas, a large piece of debris was seen separating from the shuttle. Traveling at a speed of 12,500 mph—nearly 18 times the speed of sound—Columbia disintegrated as it re-entered the Earth’s atmosphere, spewing debris over a 645-mile corridor and ending the lives of seven courageous astronauts.5

In August 2003, the Columbia Accident Investigation Board (CAIB) published a 248-page report stating that a pound and a half piece of foam dislodged during shuttle lift-off had crashed into one of the wings, creating a flaw that ultimately doomed Columbia. Beyond the technical reasons for the disaster, the Board also concluded that “deficiencies in communication…were a foundation for the Columbia accident.”6 It was also determined that “there was little or no cross-organizational communication and often no feedback from senior managers contacted by low-level engineers with concerns…”6

There are few organizations with a more complex (or dangerous) mission than NASA. Yet, a lack of communication and trust between senior managers and NASA employees were discovered to have played critical roles in the Columbia disaster. The picture painted by the CAIB report is of an organization that communicated expectations poorly and created distrust among employees by failing to show integrity in decisions about safety.

As with most organizational failures, blame was cast in every direction, but this tragedy is a prime example of why character and communication are so critical to organizational excellence.

The age-old definition of insanity is doing the same thing over and over while expecting different results. To make productive changes in your business, you need to acquire good data. When a patient purchases a hearing aid, find out why they said “yes”; when a patient decides against purchasing a hearing aid—despite a demonstrated hearing loss—find out why they said “no.” Use some type of customer survey. Conduct a simple focus group. If necessary, get help from a third party. There is a reason that successful football coaches and players spend hours watching film after the game: They want to find out where the mistakes are being made and make adjustments accordingly.

Similarly, a practice manager needs to determine if there are correctable employee failures that need to be addressed. First, do you have the right people in place? Does your track record indicate that you have the skills to hire the right people? This evaluation may be painful, but the truth is that a company can never outperform the talents of its employees. If you can’t hire good players, you need to enlist some expert help.

Second, you need to evaluate your people management skills. Management guru Peter F. Drucker said, “So much of what we call management consists of making it difficult for people to work.” Sub-par performance might mean sub-par employees, but it may also mean sub-par people management. If you want an honest evaluation of your company’s managers, get some help with a 360° assessment tool.

If you don’t want to invest the time or money to have an expert aid in the assessment, here is another option. Noted management consultant Marcus Buckingham suggests that there are six powerful questions employees will answer positively if a manager is doing an effective job. The questions listed below were derived from a massive Gallup Organization survey (over 1 million employee respondents) that was designed to determine what makes a manager effective.7 If each of your employees can honestly answer “yes” to these questions, it’s a good indication that your company’s management team is working well:

1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for doing good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?7

Encouragement and praise are two additional parts of effective employee communication, and they also play a significant role in building trust with a manager. If that’s not a strength for your managers, it’s time to get some help in that area as well.

The good news is you can dramatically improve your business; you just have to be willing to ask yourself some tough questions about the way you manage your business.

Kelly Riggs is a training and development consultant based in Tulsa, Okla, who specializes in hearing health care issues.

1. Bartlett CA, Ghoshal S. Building competitive advantage through people. MIT Sloan Management Review. 2002;43(2):34-41
2. Colvin G. Catch a rising star. Fortune. Feb 24, 2006.
3. The Conference Board. US Job Satisfaction Keeps Falling. Press release from The Conference Board Reports Today. The Conference Board; February 28, 2005.
4. Gerber M. The E-Myth Revisited. New York, NY: HarperCollins; 1995.
5. Cabbage M, Harwood W. Columbia’s final minutes. Newsday. Jan. 27, 2004.
6. Verton D. Columbia Disaster Board Faults NASA. ComputerWorld. 2003; September 26.
7. Buckingham M, Coffman C. First, Break All the Rules. New York City: Simon & Schuster; 1999.
8. Collins J. Good to Great. New York City: HarperCollins; 2001

Correspondence can be addressed to HR or Kelly Riggs at [email protected].  To learn more about Riggs and his consulting services, visit