As a business owner, you may rightfully be focused on your company’s bottom line. If you are, then a lack of profits may be the first sign that something is not right within your business. If your company is working hard but not meeting its financial goals, that lack of profits may be a symptom of organizational dysfunction. By looking at where your employees’ time and energy goes, you may be able to streamline processes and provide support to boost productivity and ultimately turn a bigger profit.
This is the second blog post in an ongoing series discussing the symptoms of organizational dysfunction. This series will focus on the everyday challenges business owners face that could be a sign of bigger problems beneath the surface. You can read the first post on a company’s lack of sales here. You can also check out this previous blog series on organizational dysfunction, it’s causes, and how to overcome it.
What a Lack of Profits Says About Organizational Dysfunction
Companies struggle to be profitable for many reasons, from lack of demand for their services, to over-emphasizing reinvestment or shareholder distributions. Sometimes there are kinks in the profitability pipeline that interfere with the free flow of revenue within a business. If sales are coming in, but your company is still facing a lack of profits, it could be because of your internal processes and procedures.
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Sometimes Business Profits Hide Organizational Dysfunction
While lack of profits can be a symptom of organizational dysfunction, sometimes a profitable business can suffer this disease too. Often, when a company is meeting its bottom line, employees, supervisors, and even owners can grow complacent. When business is good, busy employees can cut corners, avoid vision-building and collaboration, and focus on meeting the tasks at hand. However, this can allow the business to become less efficient, and more reactive rather than forward-looking. This organizational dysfunction, in turn, can slow the company’s growth, and make it easier to miss financial targets when the busy period ends.
Turning Team Members’ Attentions to Outcomes
A lack of profits may also be a symptom that your team members are focused on their individual performance, rather than the company’s success as a whole. Sometimes, a competitive work environment or lack of trust between employees and supervisors can cause team members to turn their attention inward, and protect their own needs – including the need for job security – over the goals of the business. When this happens, you need to build trust by actively cultivating a workplace culture of collaboration and open communication. When employees feel secure in their ability to raise concerns without fear of disciplinary action, they will be more willing to help you identify the troubles causing your company’s lack of profits.
Finding the Bottlenecks in Your Profitability Pipeline
The key to identifying and correcting the organizational dysfunction affecting your bottom line often involves finding the sticking points in your processes. Even something as simple as a cluttered inbox can cause substantial delays and waste valuable employee time. An inefficient company database or employee portal could easily drain your workers’ productivity, causing your bottom line to take bigger hits every time a worker uses the troublesome software or process. As a business owner, you need to balance the short-term costs of improving systems and investing in new equipment and enterprise software with the long-term benefit of improving your organization’s functionality and efficiency.
However, not every fix is as expensive as a new operating system. This is where open communication is essential to finding the dysfunction causing your lack of profits. Your employees know what is keeping them from being more productive. Sometimes, interviewing your employees may reveal that the bottleneck is simply a matter of too many staff reporting to the same supervisor, or too many signoffs required for a single operation. By listening to them and addressing their concerns you can improve productivity and overcome a lack of profits.
David Stanislaw is an organizational development specialist with over 25 years’ experience in resolving organizational dysfunction. Through business consulting and facilitation, David helps sales teams improve productivity and overcome a lack of profits. Contact us to meet with David to move toward high organizational functioning today.