Why Do So Many Brilliant Small Business Entrepreneurs Fail to Expand Their Profitable Businesses?

It can be quite exhilarating to be entertained by brilliant small business entrepreneurs exalting their vision for growth, expansion, and incredible profits. However, many of these commendable individuals painfully fail to elevate their small businesses to the grand scale they so passionate were desirous of. This failure is often the direct result of the small business entrepreneur’s inability or lack of skills to transition the successful small business organization into a large organization which would entail sophisticated and complicated organizational infrastructure and operations.

Many of the largest, most successful and highly profitable businesses started as a family business (mom- and pop operation) or by a group of friends working in a back garage assembling a product the family patriarch or a friend invented. At this stage, this setup may work fine during the company’s early stages, but for it to grow and remain profitable, the small business must evolve by enhancing its operations.

Many companies in their building block years operate in an informal fashion, often the founders and those close to them (friends and relatives) take charge of all the functions of the small organization. These functions can range from extremely time-consuming inconsequential matters all the way to the functions requiring the entrepreneur’s genius to keep fueling the engine of the company’s core business. There comes a moment when the demand for the product grows, which would require an increased attention from the entrepreneurs to lead and continually innovate and deliver competitive products. It is at this juncture that the fate of the company is sealed. If the entrepreneur learns to transition from the mom-and-pop style of operations to an executive who manages through delegating managerial functions to his/her subordinates, then the entrepreneur would have a strong chance of growing his or her business. But, if the entrepreneur remains doggedly engaged in micro-managing all business functions and operations they will eventually become spread too thin and unable to both effectively lead and run day-to-day operations.

Being a successful entrepreneur is a distinct concept from being a competent business executive. With growth comes the need for increasing sophistication of an enterprise’s operations. The small company will need to advance its supporting operational infrastructure to efficiently handle a growing client base and business volumes as well as capitalize on new opportunities to expand.  Starting out, family business owners often serve as a “jack of all trades.” Because it’s their own company, they know what needs to be done and are used to doing whatever is needed. New employees, however, will need guidance. This includes providing them with written job descriptions and training. Implement a formalized system for measuring performance that gives employees regular and constructive feedback. Not only is this necessary to help them improve, but it also serves to motivate, compensate and reward them. This is particularly key to attracting and retaining nonfamily employees, who typically desire an objective performance evaluation system that’s applied to family and nonfamily employees alike. To minimize misunderstandings and conflict, issue a handbook of company policies to both family and nonfamily employees, and establish a formal advisory council to objectively mediate and develop solutions.

Also, at the core of a small business are its processes so the more one can systematize and document them, the more easily company can train its staff to follow them for increased efficiency, productivity, and quality. Professionalizing small business processes also involves looking at opportunities to streamline them. Reducing the amount of manual effort required can free up resources to process bigger business volumes. When analyzing the business processes,  attention should be paid to operations, sales and marketing, finance, human resources, and customer product and service delivery.

Often time, for many small business owners, their business vision, goals and strategies tend to primarily reside in their heads. Business planning discussions may informally occur on an impromptu basis around the dinner table or during family or friends’ gatherings. But, as the business operations become increasingly complex, formalizing the small business owners’ plans in a written document and communicating them companywide is vital. This will keep employees in the loop and empower them to make effective decisions and act in alignment with the company’s stated objectives.

The software applications and tools your small businesses use are likely limited to supporting specific business tasks and not as suited for managing overall, end-to-end business processes. As a company’s operations grow and become increasingly complex, another common issue is the proliferation of disparate applications and tools that aren’t linked or made accessible companywide. Supporting a professionalized, process-oriented business environment requires integrated IT systems. And integrated systems let employees easily access operational information and automate work effort for improved productivity.

Transitioning from a mom-and-pop shop to a professional business, small business owners may encounter growing pains. But reviewing their operational infrastructure and making upgrades where possible can help their company survive the economic downturns and thrive in the future.

Employer-Unions’ Strategic and Systems Approach to Human Resources

Employer-Unions’ Strategic and Systems Approach to Human Resources

Unions, like other organizations, operate in an environment of change. To be effective, and in some cases to even survive, labor organizations need to make wise strategic choices and then effectively implement the strategies chosen. And they must do this simultaneously in a number of different areas, including organizing, collective bargaining, contract administration, and political action.

Central to successful decision-making and policy implementation in all of the above endeavors are the employees of the union. While the term employer-union might sound contradictory to some, it has great meaning to thousands of people who are on the payrolls of labor organizations.

Research shows that “a steady increase in unions’ adoption of more formal personnel policies, budget practices, strategic planning processes, and efforts to evaluate planned activities over the 20-year period studied. They also indicate that unions increasingly recruit individuals meeting collegetechnical, and professional qualifications. Taken together, the results suggest a recognition on the part of many unions that adapting their internal administrative practices to the new realities they face is a fundamental and a necessary part of any effort at organizational renewal.” SeeAdvances in Industrial and Labor Relations, Chapter 7, Adapting Union Administrative Practices to New Realities, Paul Whitehead, Paul F. Clark, Lois S. Gray (2017)

What is Labor Union Theory of Management?

Generally, particularly in unionized workplaces, command-and-control style of management is highly problematic. So, what is the best alliterative?

It is essential for labor unions to model best management practices. “If managing is working with and through people to get things done, then unionists need to become good managers. But ask nearly anyone in the labor movement how well unions manage staff and you will probably get mostly negative answers — once they stop coughing nervously.” Ken A. Margolies (2012, August). Managing Union Management. Cornell University School of Industrial and Labor Relations.

Human Resources Strategy for Labor Unions

If you are a unionist and wondering about the need for strategic human resources professionals in managing your labor union then you have missed the advancement of human resources from mundane administrative functions to strategic partnership within the past twenty years, particularly in the field of labor union management. See, Ken A. Margolies (2011)Human Resource Strategy for Labor Unions: Oxymoron, Chimera or Contributor to Revival, Cornell University School of Industrial and Labor Relations. (“In many unions the notion that they need an HR strategy or even that there is such a thing is unknown or shunned. However, some unions are seeking new ways to manage staff as they develop strategies to respond to the crisis in the labor movement.“) Mr. Margolies stresses that “unions are in great need of more effective HR strategies with a systems approach.” Facing existential crisis, labor unions can’t continue management as usual. They need to improve “in the area of staff accountability and development; union officials generally resist embracing their management responsibilitiestraining for managers within unions is rare; and internal union politics play a significant complicating role in all aspects of HR within unions.” Ken A. Margolies (2011).

How Can Unions Develop and Implement Such HR Strategies?

Labor Unions need to:

  1. “find better ways to develop highly skilled staff” 
  2. “set performance expectations”
  3. “hold staff accountable” 

Ken A. Margolies, Human Resource Strategy for Labor Unions: Oxymoron, Chimera or Contributor to Revivalpage 7. (2011)(Those unions most focused on staff motivation, development and accountability and strategic planning are most likely to be growing and adapting to environmental changes. Those unions which are largely engaged in legal compliance/personnel functions and internal politics are likely to find it increasingly difficult to adapt to those same changes in the environment.)

Developing Highly Skilled Staff

Many labor unions suffer from inept staff mostly because labor union experience and loyalty to unionism have become the superseding factors in recruitment and staffing labor unions. See,  Ken A. Margolies, Human Resource Strategy for Labor Unions: Oxymoron, Chimera or Contributor to Revival, page 11. (2011)(“In the area of recruitment and selection, it is common that unions primarily look for dedication to the cause of unionism and previous experience to the exclusion of many other factors. Factors such as emotional intelligenceexperience outside the labor movementwhether the candidate is a good fit for the team and job and the ability to grow and develop into more responsible jobs with the union often are less valued.”) Thus, while loyalty to unionism and union experience are important factors to be considered in recruitment and staffing labor union organizations, equal attention should be given to diversifying staff by employing individuals from “outside the labor movement.” A staff with diverse backgrounds can actually strengthen organizations.

Performance Management and Accountability Within Unions

Performance management and accountability hardly exist in many unions and where it is practiced it is often inconsistent and ineffective. “The evaluation systems and accountability systems are not very strong in unions and accountability is the part of supervising that union people have the most problem with. Unions have a high tolerance for people who are not doing what they are supposed to. If supervisors and managers generally are reluctant to give corrective feedback it is particularly true of managers within unions who consider being compared to a boss as a cutting insult. Many union supervisors and managers have such a high level of discomfort with being in the “boss” role that it is not surprising that all too often union staff who are widely seen as deficient never get held accountable.” See,  Ken A. MargoliesHuman Resource Strategy for Labor Unions: Oxymoron, Chimera or Contributor to Revival, page 25-26. (2011)

Considering the highly political nature of labor unions, conducting annual performance evaluations in labor unions tend to be ineffective. Instead of avoiding or postponing performance evaluations to annual events, managers should create a culture of feedback where they give and receive constructive feedback on an ongoing basis. “The atmosphere within many unions is mostly unfriendly to giving or receiving feedback due to the political nature of unions;” hence, achieving a culture of feedback could be trying but not insurmountable.

Clearly, for unions to have successful HR strategies for staff development and accountability, they need to practice better alternatives that have been the norm. With the enormous pressures facing the labor movement, unions are quickly coming to the conclusion that they cannot continue to maintain staff who are not performing. As a result, there is a great deal of interest in finding better ways to keep staff accountable. In many cases, these efforts are primitive and center on simply revising performance appraisal forms and practices. However, a growing number of unions are taking a more comprehensive and progressive approach to increasing staff accountability.

Ken A. Margolies, Page 32, (2011).


From Healthy Debates to Personal Attacks and Bullying

In a community full of opinions and preferences, people always disagree. Employers should encourage active discussions and welcome heated debates on the services or products, but a personal attack should be ground for immediate and permanent termination of employment of the offender. Zero tolerance is the best policy and practice to apply to personal attacks in the workplace.

The fallacy of Attacking the Character or Circumstances

One type of fallacy is the personal attack.

The argument concerning the attack of a person’s character or circumstances is characterized and shown to be sometimes persuasive but normally fallacious. This fallacy occurs when someone refutes another’s ideas by attacking the person rather than the ideas.  The fallacy draws its appeal from the technique of “getting personal.” The assumption is that what the person is saying is entirely or partially dictated by his character or special circumstances and so should be disregarded.

Personal Attacks, Bullying, and Harassment

The Workplace Bullying Institute defines “workplace bullying as the repeated, health-harming mistreatment of one or more persons (the targets) by one or more perpetrators.” While some of the specific actions a person may take against another person that would constitute bullying is similar, or even identical, to the actions seen in Workplace Harassment, there are several distinct difference:

  • Bullying can be perpetrated by anyone against anyone. Harassment only pertains to Protected Classes, such as race, religion, sex or gender, nationality, etc. Protected Classes is not a consideration in cases of bullying.
  • Bully is characterized by repetition. A single “incident” may be mean and hurtful, and probably violates a business’s own professional conduct rules, but it does not constitute bullying. A single incident of, for example, sexual harassment, however, is grounds for legal action.
  • In cases where bullying has resulted in legal action, the grounds for legal regress focuses more on the harm caused to the target, both psychological and physical, rather than the illegality of the act. Harassment cases focus very specifically the violation of Harassment Laws.
  • Most importantly, unlike Harassment, there are no specific state or federal laws that explicitly protect a worker from bullying. For that reason, it is incumbent on employers to establish policies prohibiting bullying, even a single act should not be tolerated.

Bullying can be viewed differently from Harassment in that the intent of the action is to harm in some personal or professional sense, regardless of the “protected” characteristics about the individual that would fall under harassment. Race, religion, gender, age and other state and federally protected class attributes may be a component of bullying but they don’t have to be. This means that bullying has the potential to be a larger and more pervasive problem than harassment.

Federal and State Harassment laws have made awareness of harassment a focus of many organizations’ employee training. Most employees today are at least aware that policies and laws against, for example, sexual harassment, are in place. Bullying, however, is still largely under-addressed in many organizations. And even in organizations that have rules against bullying, many employees still don’t understand what bullying is.

Workplace bullying can come in many different forms from various people within an organization or company and typically falls into three categories: Personal attacks, professional attacks, and actions designed to apply control or manipulate an outcome. When the term “bullying” is used, people often think of physical harm or abuse. But bullying can be any intentional, repeated action that is specifically intended to make another employee feel bad and affect their happiness on the job. Some examples of each include:

Attacks intended to cause personal suffering

  • Spreading rumors, hurtful gossip or innuendo
  • Yelling, name-calling, mocking, insulting or ridiculing
  • Unwanted physical contact or physical gestures that intimidate or threaten
  • Invalid or baseless criticism
  • Accusatory or threatening statements
  • Faultfinding or unwarranted blaming
  • Displaying offensive photos or objects
  • Temper tantrums, mood swings, shouting
  • Humiliation, public reprimands or obscene language
  • Ganging up against a co-worker
  • Aggressive posturing, ignoring

Attacks intended to affect job performance or career

  • Denying access to resources, assignments, projects or opportunities
  • Stealing or taking credit for another’s work
  • Interfering with or undermining someone’s work performance
  • Ignoring phone calls or messages
  • Little or no feedback on performance
  • Withholding information essential to performing one’s job
  • Toxic e-mails

Actions intended to control or manipulate

  • Failing to invite someone to an essential meeting
  • Threatening job loss
  • Excessive monitoring or micro-management
  • Assigning tasks that cannot be completed by deadline; setting unrealistic goals
  • Interference or sabotage
  • Ignoring a coworker with the intent to harm or control
  • Treating a worker differently than peers and co-workers
  • Ostracism, isolation, dissociation or exclusion from others
  • Refusal to take responsibility
  • Excessive, impossible, conflicting work expectations or demands
  • Inequitable and harsh treatment
  • Other objectionable behavior designed to torment, isolate, pester or abuse

Looking through these characteristics it is easy to see many of these behaviors in employees in almost any work environment. It is important to remember that bullying is an action specifically intended to hurt an individual or a group, not simply an act of poor communication and interpersonal skills on the part of an employee or supervisor. Further, these actions are reserved for the target individual or group and not applied to others.

What can you do?

It is not uncommon that a person being bullied chooses not to report it out of fear of retaliation from the employee or the company they work for. Still, workers have rights and it’s possible to exercise them when necessary while also remaining professional. Further, ignoring the problem will not usually change things so remaining silent won’t help.

If you believe you are a being bullied there are professional steps you can take:

Look critically, and honestly, at the situation:

Take the time to evaluate what’s really happening. Are you the target of a bully, or are others also getting the same treatment? Is it repeatedly happening or is it just a bad day? Maybe the individual is just an unhappy, angry person who treats most people the same way. While none of these behaviors should be acceptable in the workplace, there is a difference between bullying and general, bad behavior. Bullying is persistently aggressive and/or unreasonable behavior against a specific group or individual.

Address the bully directly

If you know you’re being bullied, firmly, and professionally, tell the individual that their behavior is unacceptable and politely asking that person to stop. Try not to engage with the bully any further than that because a verbal match was not your intention. Further, arguing or yelling can exacerbate the situation and make you look just as guilty.

If you do not feel comfortable doing this then speak with your supervisor and ask for their assistance.  Your supervisor should be able to guide you through the steps you need take. Mediation is one-way supervisors can help to resolve the issue.

Keep a record

It’s always a good practice to document events as soon as they happen. Write down the details of any bullying to include what they said, what you said, along with the time and date. This will assure that should the time come to take things to another level, you are not relying on memory and you can remain factual and dispassionate. Both will help to strengthen your position.

Use your Chain of Command

Most organizations have either formal or informal procedures in place for addressing conflict and it usually begins by speaking to your supervisor. Other procedures may be documented in your organization’s employee handbook.

If the person bullying you is your supervisor then moving up to the next supervisory level or the human resources office will usually be next.  Always keep any physical proof and documentation that you may have and present it to the proper personnel. Describe what is happening in detail and explain how the situation is impacting your ability to do your work. It’s important to stress that you want to find a productive, comfortable way of addressing the situation.

Check your emotions

Bullying can be perceived as a serious threat even when it’s not physical. It is normal therefore to react emotionally; getting angry, defensive, and even crying are all normal reactions to a perceived threat. As hard as it may be, remaining calm and unemotional can go alone way toward maintaining the upper hand when addressing the bully or seeking assistance.

Seek Assistance

Many people are afraid to address issues of bullying because they fear it could impact or jeopardize their position or their employment. But bullying left unchecked can harm more than your career, it can affect your mental, physical, and emotional health. It is never in the best interest of an organization for employees to be bullied and most supervisors, and certainly business executives and owners, will not tolerate it. Besides the negative impact on worker productively and morale, in worst cases, there can be legal ramifications to unchecked bullying in the workplace. So don’t keep attacks to yourself.