Tangible and Intangible Costs

One of the primary clues that you have an abrasive boss in residence is a high turnover rate among employees, and long term employees are there because they can’t afford to quit, but are often into what I call the R3 mode – resist, resent and revenge.  Productivity is often below standard. (A side note: Abrasiveness can also be a characteristic of staff whose behavior is just not being handled by the boss. This situation can also result in unhappy employees, R3 mode, and increasing turnover.)The problems: the work keeps getting interrupted with resignations, hiring details, orientations for new employees, and sick days for illness or injuries on and off the job among the longer term employees.  Doesn’t matter where you are: high turnover = low morale.

The real problems begin to occur as gradually, the ‘soft’ expenses begin to rise and encroach on the profit margin. The cause: reduced teamwork; training time costs as in- house staff are pulled away from their regular duties to train new employees; close to a six month lag time in maximum output as new employees get up to speed; employee payouts as they leave and, increasing sick days and lost work days among those who stay, adding to the tally of decreasing output.  Doesn’t matter where you are: low morale = lowered output.

The slide to left side of the ledger is often insidious. Unless someone is paying close attention, it may not be noticed until it is a challenge to financially manage a turnaround.  Because the costs are ‘soft’ costs when a part time employee or short-term employee leaves, an organization may not actually cost out the actual expense. This is a mistake. The costs are real in real time.  More companies are now paying attention to those costs, but not always diagnosing the right problem.

Survival Rates:

The question: How long can one company last under these circumstances?
The answer: not forever, and perhaps not more than five or ten years if the business stats for new companies is any indication.  More than 50% of new companies fail within the first five years; and, approximately 70% within 10 years (ref: Small Business Association (SBA)).Think your company is an exception to the rule? So did most of the small business owners and entrepreneurs of those failed companies.To stay on the growth curve for the long run, a company needs to attend to anything that interferes with that trajectory. There is a critical growth curve that most companies need to meet in order to grow their business, keep old clients returning and new client referrals coming in. Personnel interaction and company culture are prime influencers of that trajectory.   

Workplace bullying – in any form – is bad for business. It destroys teamwork, commitment and morale.   Tony Morgan
Those in powerless positions aren’t about to complain about bullying bosses, abusive supervisor or corrupt co-workers. There is no safe way to do so and no process that promises redress.  Margaret Heffernan
In the situation where there is high turnover in a new company, the bottom line may continue to grow for a period of years if:
  • The boss lives his or her job and the company is still small to medium in size
  • There are dedicated, committed or ‘can’t afford to lose my job’ staff willing to put their jobs first (which has been part of the culture of IT companies over the past two decades as IT has taken on additional importance in business performance)

Here we are talking to the executive with an abrasive boss and/or, the business owner/executive who needs to take time to think about what their own impact is on the business environment – with the long-term picture in mind. There are a number of ways to do a quick assessment of how big a contributing factor the abrasive boss is:

Whatever you do, you are most likely going to require some outside intervention. Firings and punishment or suspensions often do little to improve the situation unless there has been an ongoing tense interpersonal problem that crossed defined boundaries and requires that move. But in most cases, deteriorating interpersonal interactions can’t be solved by firing, and may in fact be exacerbated.

The final proof of greatness lies in being able to endure criticism without resentment.     Elbert Hubbard
Below, I offer some brief suggestions of what you can try, and who to call upon and why; but the bottom line is you most likely need someone from outside the box you are all living and working in to get an unbiased read on what is happening and what might turn things around.
  1. Assess the environment in your office. Note the number of smiles, the number and feel of casual conversations around the office.  Is there chatter? Or is there silence? Then take a hard look to see if you can identify where the issues are.
  2. Take an inventory of your own practices within the office.  Evaluate how you are communicating. Ask for some feedback. This is tough. You need to be prepared for some tough talk, or lack of response if trust is low.  So if you don’t gain traction, the next three steps can be important in the survival and ongoing energy of your company or organization.
  3. Hire a coach to help you evaluate the office culture, communication and decision-making styles, and interactions within the office.  Self evaluation or evaluation from within is often limited in scope and done with an already existing bias.
  4. Hire business coaching and/or consulting company to conduct an off-site and/or online survey of staff, including questions about the boss, the working environment, degree of job satisfaction, etc.
  5. Hire a mediator/facilitator in organizational development or human relations to facilitate open discussion sessions within the organization (only after conducting an anonymous survey first).
  6. Once the above steps have been accomplished, hold some large group sessions within the organization to talk about and seek input for future plans, the changes that are currently happening, and increase interaction among all levels to increase potential for collaboration and high performance team work.
 A genuine leader is not a searcher for consensus but a molder of consensus.  Martin Luther King Jr.
 The boss models the behavior employees emulate. This helps to create the culture and the type of environment that determines long term, sustainable success or failure.

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Annette Hamm

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