Ten Worrying Signs for Private SME-s

These are typical symptoms for an organization that is not prepared to evolve in ascending direction. It may not go downward, but it will certainly experience difficulties growing beyond its current level:

1. Succession at the top is based on criteria other than merit and competency. Family ties are the most common illustration of such compromise.

2. People nominated to formal leadership positions (titles) are not identified with the core business (i.e. Sales people promoted at the top of a manufacturing company, Lawyers driving a distribution business, Accountants leading a sales organization)

3. Executive positions are occupied by B people. The danger is not as much in their mediocrity, but in their tendency to surround themselves with C people.

4. Company website is used as a Facebook page, for self promotion of the ownership – examples are pictures taken with celebrities, or outside the relevant business context (family events, birth celebrations, etc.)

5. Too much emphasis is put on the “family controlled” character of the business. Such attribute may be liked by other small, family-run businesses, but raises suspicions in the eyes of larger, professionally managed organizations, or other supporting entities (banks, legal representation, Government offices).

6. Preoccupation with personal image is more prominent than meeting the core business objectives. Excuses are accepted, and compromises are made, when they facilitate projecting a better light, or help hiding mistakes.

7. Outside consultants become the preferred source of advice, and are working directly for the person at the top, ignoring the management.

8. Direct lines of communication are maintained between ownership and lower level employees, circumventing the hierarchy – People are solicited for personal services (taking kids to school, deliveries to home address, repairing something at the family cottage, changing car tires etc.)

9. Small, short-term objectives, perceived as associated with owner’s interest, are allowed to take precedence over established processes and principles – Statements like “Doing the right things is more important than doing things right” are deceiving when not aligned with business fundamentals. 
10. Too much attention is given to the messenger, as opposed to those contributing to the substance of the message – people will make an effort to create positive messages of non-relevant nature, will rush to be the first to deliver them, and will take undue credit.