Over the past 10 years, I have been consulting in the OCS arena and I have encountered myriad poor management decisions. These bad decisions had infected their companies' employees so badly that the morale and performance of many of the staff was hurting the organization. This month, I would like to share with you several areas of management's poor decisions and how I suggested rectifying them.
Decision: Pay scales well below industry standards, leading to unqualified employees who are constantly making mistakes, thus affecting customer service, order entry, packing and deliveries. Employee turnover is continual due to poor performance. Management's screaming behavior has scared off other staff members.
Solution: Simply, pay higher wages for better-qualified workers and employee turnover will be less. Management should institute a training program and monitor each new employee through weekly evaluations for the first month, then monthly evaluations for the next six months. If any weakness is found with a new employee, management must correct the new recruit in private, not to embarrass that person in front of colleagues.
Decision: A key manager, who has poor people skills, is power hungry and lies to senior management to cover up his shortcomings. Employees take out their frustrations on customers and fellow workers.
Solution: When there is a history of misuse of power and managing by fear, it is time to take steps to either redirect that manager's strengths and abilities -- or fire the manager. Harvey McKay, author of How to Swim With The Sharks Without Being Eaten Alive, stated that we will all make hiring mistakes, but the worst mistake is not firing the right person. This person will ruin a company by affecting the good employees.
Decision: Employees are required to pay for any drinks or snacks that they consume, while senior managers have access to filled refrigerators full of products. Employees feel that a caste system is definitely in place.
Solution: All employees should have the benefit of free snacks and drinks, or everyone should pay for these items. We all know that certain perks come with greater responsibilities, but management should not rub these added benefits into the faces of others. Management should use more discretion.
Decision: An owner and his senior manager became close friends, and the owner found it difficult to discipline his friend who was continually making decisions that were hurting the company.
Solution: This is a difficult situation for an owner, but if an employee or even a family member is jeopardizing the company, the owner or president must take the necessary steps to insure its integrity. Friendships go both ways, and the owner has to sit down with his friend and explain that unless these problems get resolved, his position within the company will be jeopardized.
Decision: A family-owned coffee service has put the "heir to the throne" in a position of making daily key decisions. The problem is that she does not have the experience and the skills necessary to run the company.
Solution: A family member who enters the business must have the skills necessary to run the company. She must learn the workings of each department by actually working in all the departments, until she attains a full understanding of what makes the company operate. I also suggested that she enroll in the Dale Carnegie Institute and take the leadership training course.
Decision: Many of an operation's OCS customers were upset because their deliveries were not made on a timely basis. It seemed that the shipping department was given orders by their manager to hold some of the trucks up in order to pack out last-minute orders.
Solution: The tail does not wag the dog. Management must know when to draw the line for a cut-off time to promise delivery of products ordered by customers at the last minute for delivery the next day. In accepting last-minute orders, management must not penalize customers who follow the rules and reward the ones that don't. (Yes, there will be a few exceptions!)
Decision: The company had a low gross profit, and that was reflected in its falling behind on payments to suppliers. The salesforce was allowed to cut prices in order to take business away from competition. The owner was known to be a low-price seller in the industry. His philosophy was to get the account with low pricing, and then raise the prices later on.
Solution: Top management was told that they would be getting deeper in a financial hole if they did not set the standards for higher gross profits with their salesforce. Once suppliers started holding back deliveries, accounts would be jeopardized when the operation was unable to fulfill its customers' orders. Customers who were sold with lowball pricing can't easily be swayed short term to pay higher prices. Also, if cash flow is down, the operator can't purchase the latest state-of-the-art equipment and new delivery vehicles, take discounts for early supplier payments, etc.
We all have our own style of running and managing our companies. In today's market, you must be proactive to avoid potential problems. Let me know about any problems that you have had and how you solved them. I can be reached at (516) 241-4883 or by email at email@example.com .
LEN RASHKIN is a pioneer in office coffee service. He founded Coffee Sip in 1968 and after 22 years merged it with Dell Coffee, of which he became president in 1991. Sales at Dell topped $7 million dollars. Rashkin is also a founder and officer of Eastern Coffee Service Association and National Beverage Products Association. His industry honors include NCSA's (now NAMA) Silver Service Award and NBPA's Lifetime Achievement Award; he was inducted into NBPA's Hall of Fame in 1996. His marketing excellence earned him NBPA's Crystal Bean Award and three NCSA Java Awards. He is a frequent speaker at national and local trade conferences, consults on OCS sales and marketing and has is the author of two OCS training programs.