HomeBusiness DigestThe problem of company “war veterans”

SA, Botswana top in Prosperity Index

Talent also makes a bee-line for the big business. You would know this from the social circles when people brag at social gatherings about the fact that they work for that big company. There is a saying that the best way to know who works for the big companies is to check the branded golf shirts and tee- shirts they religiously don outside working hours.

The success of any business takes it from being a small business into growth, which at times comes with systemic problems that may eventually spell the demise of the organisation. Tonnes of literature exist covering entrepreneurial skills on how to build a business into a success. Very little of meaningful literature tells the entrepreneur how to sustain growth and not become a victim of it.

 

We touched on the success trap in a previous instalment of this column. We expand on that aspect by discussing systemic issues that haunt the growth of indigenous businesses in our economy. It is vital that we discuss the dangers that confront growing business as our economy is re-birthing and new entities start to flourish. Our indigenous companies are growing in quantum leaps yet we do not talk much of the problems in the dark alleys ahead.

In the seminal feature of this column we discussed the fact that an ecosystem is self regulating in terms of numbers of each species that is sustainable at a given time. Species grow and shrink as a result of the size of the population of the species on the down or upstream of the food chain. Well known anthropologist Robin Dunbar did ground-breaking research on the optimal size of numbers of primates in sustainable groups.

 

He discovered that the limit for humans to maintain stable relations in a group is 150.  It is more difficult to culture relationships between the early joiners of a group and the new comers.

 

The complexity of adaptation to the culture and acceptability make building relationships more difficult as the group grows.

In a growing business, when the number of individuals grows, the relationships start to break down though management do not easily see the signs. The cadre from the time when the company was small would have worked together with their cronies for years and would feel a special camaraderie with each other. They are surprised that the newer crew don’t feel the same way. They may even be offended that that newer arrivals don’t feel the same personal relationship commitment that they do.

The first problem is that of the rise of self important people who have been around for a while, particularly those that pioneered the business venture, who get promoted to leadership roles.

 

Logic would tell you that whenever there is room for a leader to be appointed in the corporate world, the best candidate should take the role through open contestation.

 

However, this logic does not always prevail in growing businesses, particularly when the growth is organic as is the case with most such entities in our own economy. It is an undisputed fact that an individual’s longevity within an organisation would be outweighed by competence in respect of a person’s ability to do the job at hand.

 

The circle of the club of people who came in first, which I would call the pioneers circle, is usually promoted beyond their own level of competence. These people will have nasty territorial stripes up their sleeves, ravaging everyone in the organisation.

 

They feel entitled to their own opinions even on business issues one they do not have the foggiest clues. If any local organisation comes to mind, you can easily confirm that newer members in the management ranks pack and leave as they cannot stand this arrogant lot. If they are still stuck in the organisation it would be because of unemployment — they slog on totally disengaged. The rest of the employees worship these mini gods just to keep their pay cheques safe.

In the interest of protecting the brands of organisations, I decided not to mention particular organisations that exhibit these symptoms, however, it is my hope that they take heed of the issues raised herein and identify their own problems through introspection.

With that said, it is important to note that rise of the pioneer circle is the beginning of systemic failure problems for the organisation. The elevated pioneers have the tendency to surround themselves with sycophants who sing their praises in the corporate corridors.

 

These are imbongis (praise singers) who applaud everything they do, no matter how half-witted it could be. This makes up for the pioneers’ lack of professional talent. New hires signed up on the basis of competence and any upcoming talented people who question the status quo are either side-stepped in decision-making or completely ostracised. 

 

In the event that these useful persons cannot be easily set aside because they form part of a management committee, the pioneers will still force their way past them. Robust debate from the brainy new comers is stifled through fake consensus. Hold a thought there, what is better for the business, majority say or the correct say? An organisation cannot innovate based on consensus, it takes guts to sail unchartered waters.

 

No offence, but I believe that consensus should be left with the parliamentarians because robust debate in those circles is in short supply as the rise to the rank is not by intelligence but by fame. Take note, incompetent pioneers detest seeing the new comers steer the ship into better seas where they never dreamed of. The pioneers’ imbongis, who are also raised to management ranks, form part of the deciding committee: Your guess is correct; they just side with the mighty pioneers and good ideas go to file 13.

Systemically, the process of ostracising the worthy people who are neither pioneers nor their imbongis becomes self-reinforcing.  The ostracised strong players become frustrated and leave. Ironically the worthless pioneers and their groupies who stay are rewarded for their loyalty, by further promotion in most instances. 

 

The organisation values them for their perceived reliability, moreso because they would still be around when the business stability begins to shake. The organisation’s owners, usually the very founders, are oblivious of the fact that the pioneers are the reason the ship is going through violent storms. In biblical times Jonah was thrown overboard to calm the storm and steady the ship. Business prophets hardly exist, so the Jonah’s continue to slumber soundly while the ship is ravaged by the seas.

Further reinforcement sets in, the founders and the executives realise that the waters are troubled, for they can see that something is going wrong; they further depend on those pioneers whom they feel they can trust even more. It is unsophisticated human reasoning that leads the ones at the helm to believe that the pioneers who were there when the organisation was formed till the present day understand the business enough to be able to steer it back to safe waters.

 

At this juncture a bunker mentality sets in, with the pioneers proverbially circling their wagons like their historical namesakes. The organisation becomes even more insular. The founders would now believe that the pioneer folk are the best for the management ranks; newcomers will be allowed to come in at lower ranks only.

The systemic problem will continue to loop and the organisation will begin to stall, if not collapse totally. It would be a pity to see indigenous organisations collapse because of these systemic problems. We know that the level of unemployment is high in our economy, but that is not a good enough reason to justify the appointment of incompetent pioneers, cronies and relatives into decision-making positions that they are not competent in. This brings forth a question:  Are founders the best leadership for a growing business? Your thoughts are welcome.

We will discuss further issues bedevilling the indigenous small and medium enterprises in upcoming instalments. We will discuss the ideal systemic turnaround initiatives that these organisations can implement to revive their fortunes.

 

Sam Hlabati specialises in Systems Thinking and Reward Management. You can contact him on samhlabati@gmail.com

Recent Posts

Stories you will enjoy

Recommended reading