Low performing organisations rarely, if ever, resolve their performance issues by amending their processes or procedures. They always, as in this example resort to employing cohorts of extra staff. The additional staff, who lack organisational experience do nothing to resolve the organisations poor performance. The performance issues are ignored and in all cases become even more difficult to deal with as they become hidden in the day to day malaise of the organisations chaos and poor management.
Background to the Low Performance Scenario
In the mid-2010s, a UK-based distributor
entered into an exclusive dealership agreement with a European manufacturer of
heavy industrial equipment. This agreement allowed the distributor to import
and distribute a wide range of equipment within the UK market. Product prices
ranged from £25,000 to £500,000, with optional UK-designed attachments
increasing costs by up to 30%. The agreement required the distributor to tailor
imported equipment to meet UK regulatory and operational standards, thereby
serving domestic customers effectively.
The industrial equipment was
manufactured across several European plants under the full control of the
original manufacturer. This arrangement ensured product consistency but placed
full responsibility on the UK distributor to handle localisation. Adaptation of
machinery, including safety features and legal compliance, became the sole
remit of the distributor. However, without direct oversight from the
manufacturer, ensuring conformity and alignment with UK legislation presented
several challenges.
The distributor’s infrastructure spanned
nine locations nationwide. These included a central head office, a combined importation and service facility, and a
site focused on re-manufacturing used machines. Additionally, service centres were established across England, Wales and Scotland to
provide customer support and maintenance for the adapted machinery.
Despite the robust geographical
presence, the distributor's operational and managerial weaknesses significantly
hindered overall performance. A lack of strategic leadership, inadequate
internal controls, and poor compliance mechanisms led to critical organisational
shortcomings. These performance issues culminated in reduced customer
satisfaction, safety concerns, and a decline in commercial viability.
Compliance Failures and
Safety Risks
The distributor imported CE-compliant
machinery but adapted and sold this equipment without retaining CE
certification. These modifications often involved structural and functional
changes that were not retested or recertified. As a result, machines failed to
meet UK safety regulations, exposing both the distributor and its customers to
substantial legal and operational risks. Such practices violated industry
standards and undermined client trust and brand reputation.
UK-designed attachments and options were
introduced without third-party safety validation or endorsement from the
original manufacturer. This absence of scrutiny increased the likelihood of
component failure. Critical equipment, when used in hazardous environments,
posed serious dangers. In some documented cases, operational safety mechanisms
failed, placing end users at risk of severe injury or even death. This
compromised the distributor’s ethical and legal responsibilities.
No formal manuals for installation,
usage, or maintenance of attachments were developed or provided. Customers often
lacked proper instructions, resulting in incorrect usage, breakdowns, and
avoidable accidents. The manufacturer’s approval was neither sought nor
obtained for these components, raising serious concerns about liability in the
event of litigation. Without proper documentation, accountability for component
performance could not be established.
Furthermore, a quality management system
(QMS) was never implemented to maintain standards in sourcing or modifying
attachments. The absence of a QMS meant no auditing process was in place to
ensure quality or regulatory compliance. Equipment options were often installed
inconsistently across units, creating variations in performance and safety.
This exposed the organisation to further reputational and financial risk.
Procurement and
Commercial Oversight Deficiencies
The organisation failed to implement a
product catalogue or asset register. Consequently, performance data for
equipment options and attachments was not captured or monitored. Failures were
undocumented, preventing root cause analysis or trend tracking. Additionally,
warranty claims could not be processed effectively, leading to disputes with
customers. The absence of commercial visibility also hindered profitability
assessments for individual components.
No commercial risk mitigation strategies
were developed. Failures in equipment attachments were absorbed by the
distributor rather than transferred back to suppliers. This was due to a lack
of coordinated contracts between the customer and the supplier. Without
indemnities or service-level agreements in place, the distributor bore the full
burden of rectifying defects, adding to operational costs and exposing the
company to legal liability.
Personal protective equipment (PPE) for
field service engineers was specified for branding rather than operational
suitability. Several industries the distributor served had sector-specific PPE
regulations, which were overlooked. This misalignment resulted in
non-compliance, placing employees at risk and creating further liabilities.
Inappropriate PPE also compromised engineers’ efficiency and credibility on-site.
No legal risk analysis was conducted for
purchasing and supplier management functions. This omission resulted in the
company failing to identify contractual vulnerabilities or legal exposures
across its supply chain. Without such risk analysis, the distributor was unable
to take preventative action, leaving the business open to contract breaches,
delivery delays, and disputes with suppliers over accountability and
compliance.
Procurement Strategy
and Supplier Management Failures
A formal category management process was
never adopted. This failure limited visibility of purchasing trends, volumes,
and spending behaviour. Without structured data, procurement teams were unable
to forecast demand, negotiate bulk discounts, or evaluate supplier performance.
As a result, the distributor operated at a competitive disadvantage during
supplier negotiations, resulting in lost cost savings and procurement
efficiencies.
Annual spending, totalling approximately
£40 million, was not subjected to structured negotiations or competitive
tendering. The organisation accepted suppliers' terms without challenge, paying
7–9% above open market rates, resulting in annual cost increases of £2.8 to £3.6
million. This oversight significantly weakened profitability, reflecting a lack
of commercial discipline and strategic procurement planning.
No supply contracts were put in place for the procurement of construction equipment options or attachments. Without contractual obligations, suppliers
were not held to standards relating to quality, safety, or legal compliance.
The absence of formal agreements also prevented the distributor from enforcing
delivery timelines or service expectations, reducing the reliability of its
supply chain and increasing operational risk.
A lack of internal coordination and
oversight further hindered procurement and supplier performance. There were no
mechanisms for tracking supplier incidents, quality metrics, or delivery
performance. The organisation was unable to identify underperforming suppliers
or take corrective action. This lack of structure and accountability led to
recurring quality and service failures, with no improvement plans in place.
Recruitment Policies
and Talent Gaps
Recruitment policies focused exclusively
on improving workforce diversity and inclusivity. While well-intentioned, this
approach was not aligned with the organisation’s immediate commercial needs.
Critical skill gaps at director and team leader levels remained
unaddressed. The absence of commercially experienced leaders weakened strategic
planning, performance oversight, and functional collaboration.
New hires at the senior level were often
promoted based on diversity criteria rather than commercial or operational
capability. These appointments resulted in directors and managers who lacked
the confidence or expertise to drive organisational change. In specific cases,
individuals avoided making controversial decisions or addressing
underperformance, fearing internal political backlash or personal reputational damage.
There was little emphasis on recruiting
individuals with technical knowledge of the sector or experience in managing
high-value supply chains. This deficiency directly impacted the company’s
ability to adapt to market challenges, control costs, or improve service
delivery. Without targeted recruitment, departments operated inefficiently and
with limited strategic alignment.
Furthermore, once appointed, directors
and team leaders received minimal training, coaching, or mentoring. Without
structured development programmes, they struggled to navigate complex
operational challenges. Performance management systems were absent or
underutilised, leading to inconsistent expectations across the organisation. As
a result, underperformance persisted, and a cohesive culture of accountability
and excellence could not be established.
Behavioural and
Leadership Failures
Leadership behaviours among head office
and service centre directors were inadequate. Senior executives failed to offer
guidance, performance monitoring, or professional development. Directors
avoided site visits, were unable to promote inter-departmental collaboration,
and allowed silo working conditions to take root. Their inaction and disengagement
signalled to teams that poor performance would go unchallenged.
Key behavioural traits of
underperforming directors and team leaders included:
- Avoiding
controversial decisions or passing them to others.
- Rarely engaging
with front-line teams or operational facilities.
- Neglecting to
foster collaboration between departments.
- Failing to lead or
support performance improvement projects.
Directors frequently justified inaction
by promoting the view that organisational change was unnecessary. This attitude
fostered stagnation, low morale, and widespread disengagement. Teams were left
without direction or accountability, while political motivations superseded the
organisational good. Constructive feedback and challenging conversations were
discouraged, reducing opportunities for growth or corrective action.
There was a marked lack of curiosity or
inquiry among the leadership team. Senior staff failed to ask fundamental
operational questions, disregarded staff input, and appeared distracted during
critical meetings. High-performing employees were overlooked, while toxic
behaviours and negative attitudes were ignored or tolerated. This created a
culture of apathy and disillusionment within the workforce.
Ultimately, the lack of proactive
leadership prevented the organisation from responding effectively to
environmental or market pressures. While external conditions posed challenges,
the root cause of organisational failure was internal, stemming from poor
leadership behaviours and a lack of strategic agility. Sustainable performance
requires change-ready leadership, not passive management.
Misguided Responses to
Organisational Decline
Instead of optimising existing systems
and improving staff effectiveness, the organisation responded to
underperformance by expanding its workforce. This decision increased fixed
costs and complicated management oversight without resolving the root causes of
failure. More employees were added to flawed processes, which increased
inefficiencies and compounded existing problems.
The additional workforce diluted focus,
stretched resources, and overwhelmed undertrained managers. Without defined
roles or adequate supervision, many employees operated without direction. This
created an inconsistency in service delivery and further eroded customer
confidence. Rather than creating value, the headcount expansion resulted in
bloated operations and poor accountability.
Key opportunities to work smarter, through
better systems, more transparent communication, and improved staff empowerment,
were ignored. Automation, process optimisation, and performance measurement
were overlooked in favour of manual, reactive approaches. As a result, the
organisation missed chances to drive productivity with leaner resources.
Ultimately, the decision to grow staff
numbers without system reform proved costly and ineffective. It illustrated a
failure to think strategically or embrace meaningful change. High-performance
organisations achieve more with less by aligning staff skills, tools, and
goals. In contrast, the distributor’s response reflected short-term thinking
and a lack of executive vision.
Attributes of
High-Performing Organisations
In high-performing organisations,
directors and team leaders demonstrate accountability, focus, and strategic
foresight. They take responsibility for their performance and that of their
team. They view leadership not as a title but as a responsibility to influence
positive change within their sphere. Their commitment to action drives
measurable results.
Core behaviours include:
- Managing
organisational uncertainty before it affects outcomes.
- Taking ownership
of performance across all operational levels.
- Building unity
within teams and departments.
- Fostering
leadership development among staff, not dependency.
Leaders in high-performing organisations
invest emotionally and professionally in achieving success. They are energised
by their roles, dedicated to completing tasks with precision, and hold
themselves to the highest standards. Enthusiasm is consistently present across
teams and reinforced through positive feedback, goal alignment, and
collaborative efforts.
These leaders also accept failure as
part of growth. They take calculated risks, revise approaches when needed, and
use setbacks to build resilience. Their drive to improve is continuous and
visible across the organisation. By focusing on outcomes rather than effort
alone, they help their teams exceed expectations and deliver outstanding
service.
Most critically, high-performing leaders
empower staff to make decisions. They delegate authority based on trust and
capability, ensuring projects are executed efficiently. This empowerment
creates agility, allowing organisations to respond quickly to market changes,
customer needs, and internal challenges. It is this proactive mindset that
distinguishes exceptional leaders and drives sustained organisational
excellence.
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