Patisserie Valerie – a cautionary tale for accidental managers
Posted on 23rd January 2019 at 16:49
A little over 3 months after Patisserie Valerie discovered two overdraft accounts which appear to have been authorised by a single director without anyone else having any knowledge of their existence, comes the sad but not altogether unexpected news that the company has gone into administration. And over 3,000 staff are facing the prospect of losing their jobs.
From the moment the story first broke there was incredulity at how the board could not have known that they had these two overdraft accounts.
But if you think something like this couldn’t happen to you in your business, I suggest perhaps you should think again. Because, like many corporate failures recently, this is yet another story about a lack of management.
We hear a lot about leadership these days. How everyone should be a leader, inspiring people to follow them to achieve their great vision.
Enabling people to succeed.
But all this talk of “leadership” has led too many businesses to forget about some of the basics of managing people, money and processes. The really unsexy fundamentals that include tedious things like “risk management” and “corporate governance” and “supervision”.
Patisserie Valerie is yet another tale of a company that grew too big, too quickly. So quickly that they didn’t put in place the right management structures and processes that would ensure things were being done correctly at every level.
I’m talking about having in place the kind of reporting lines that mean every employee – no matter how senior they are – is being supervised and held to account by someone else. Someone whose job it is to take the time and have the interest to understand the job their direct reports are being asked to do, how those jobs should be done correctly, and all the sneaky little ways that a determined individual could get around the rules to their own personal advantage.
The kind of performance management culture that ensures every employee’s performance is monitored regularly, and measured realistically. Where changes in performance are noticed, and recognition, or corrective actions, are taken as a result.
The kind of culture where curiosity leads the way. Where it is normal to ask questions about how that performance improvement was actually achieved; what corners were cut or procedures ignored? And where turning a blind eye because someone is achieving great results is just not acceptable.
Why doesn’t this happen in every business all the time? Because 80% of UK managers – that’s around 2.4 million UK bosses – are accidental managers. Great at their day job, or at managing a business, but not so good at managing teams. Most have never received any formal training on how to manage people. Not a single day.
I wrote a few years ago about Nick Leeson, who you may remember brought down Barings Bank through a series of gambles which he was able to take apparently unnoticed, because his bosses didn’t really understand what he did, and so didn’t ask the right questions about his performance. In fact, they didn’t ask any questions: his results were so good, they didn’t want to know how he achieved them.
What has this got to do with accidental managers in smaller organisations though?
Well, here are some questions you might like to ponder.
Do you know what every member of your team is doing every day?
Do you know how they're doing the job they're doing, and how they're getting the results that they're getting?
Do you know how they can get around the rules in your organisation? Or cheat your bonus scheme? Or fiddle their expenses?
Have you really thought through where the risks are in your business model, and what might happen if an employee finds and exploits them?
Most leaders and managers just don’t ask enough questions about performance.
As long as the money is coming in, they simply aren’t bothered about how the job is getting done.
But what risks are your employees taking right under your nose? What do they actually say to your clients? How many productive hours are they actually working? What is getting in the way of them working harder and achieving more for you and your business?
To find this stuff out, you need to be talking to your team members. Regularly, in structured conversations which delve deeper than the surface results, and really explore how results are being achieved.
I would take a guess that, however big or small your company is, if you went and really looked at what is happening in your business, instead of averting your gaze, you would find a lot of things that horrify you. Hopefully not a secret overdraft account, but definitely a lot of behaviours and activities that aren’t in any values statement, company procedure or job description you have put in place.
It’s time to bring management back into fashion. For the sake of your business.
If you don’t know how to have this kind of performance conversation, or what to monitor, or how to spot that an employee or business partner is making up their own rules, then have a look at our coaching programme for Accidental Managers.
It might just save your business.
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