Academics

Manage your career by knowing when to leave

5/22/2018

by Dr. John G. Schwarm, MBA Program Chair

Being comfortable in our respective jobs is both a blessing and a curse. The blessing is that you are good at your job. Yeah, really good. You have reached the upper quadrant of your job taxonomy. You are performing at a high level and experience the accolades from your peers and are well respected in your industry. However, something more sinister is occurring behind the scenes. Your employer is showing signs of strain. Either poor management or a change in the industry could result in a career fatality. Being financially and emotionally prepared to move to a new firm may be the best strategy to insure continual employment. I have assembled 12 signs that may signal a change with your employer and you as their employee. 

Working in the technology information era offers both opportunities and challenges. The speed of decision making is lightning-quick and often management makes decisions quickly without looking far enough ahead to realize the actions that will result from impoverished management. The perfect storm situation: you work for over a decade in a Fortune 500 company. You are top of the pile in your division making great contributions daily. You hit your numbers and regarded by both your customer and management. Until your job is eliminated in what was to be the “Perfect Storm”.

What were the signs that this was going to happen? What clues did I miss several months ago when I should have been looking for a new position? Why was I so loyal for the past decade when my employer did not return the favor? All of these are great questions and often rhetorical in retrospect. Although many articles are designed for self-help in the aftermath of the storm, prevention is the best way to avoid the problem in its entirety. The 12 scenarios below are general in nature and should be regarded as subtle clues of what may occur in the short term. 

  • Senior leadership inexperienced:

We all are accustomed to changes at the senior leadership level. Often times they have the tenure of NBA basketball or NFL football coaches. One bad season, they are gone. What is peculiar in this instance was the replacement of the new leadership with those with no senior management, leadership, or academic credentials. Additionally, they had weak or little credentials in the business segment. In some cases, incorporating new senior management, from other disciplines, can be a benefit. Having new ideas, new strategies, and a desire to success. However, this Pygmalion approach offered little solace to those employees in their wake. Decisions were centralized while the individuals had the title, they were only executing decisions of their superiors. Not exactly a leadership role that would require the harnessing of the arts and sciences of management. They may have read the book, but they certainly did not take the class.

  • Revenue Decreasing:

This one was obvious but often we lull ourselves into thinking that the next quarter will bring about better news. We are constantly caught up in the fever of hitting our numbers or making the department goals, we do not realize the organization as a whole is faltering. Sales may be increasing but with lean margins and a reduction in staff, it is next to impossible for the business to survive. Competitors are in a race to the bottom on price and predatory pricing schemes only hurt the industry. After several less than stellar performing quarters, it is only time before more changes are inevitable. Management has not provided a strategy document that should do one thing, prioritize toward the money. The concept is work on those aspects that drive revenue, increase valued market share, and expand your profitable relationships. They forgot the cardinal rule of business management, prioritize toward the money.

  • No innovation

The rookie management team reads the new product ideas from the staff. They find compelling, but refuse to take any action. Why? Budgets and resources are the usual culprits. The reality is that innovation is not on the agenda. Management is too worried about ratios and headcount reductions to concentrate on expanding the business. When management is distracted by these aspects, they clearly have missed numerous opportunities to explore new ventures, new acquisitions, and reinvent their industry. When senior management has made these decisions, this is a sign that the company has no interest in expanding their operations. It is a matter of time until the company’s fate is well known by your competition and your customers.

  • Work harder and beat the deceased equine

Not hiring is a bad sign along with staff cuts in critical areas. Many companies go through numerous quarters without hiring new staff. Good companies boast about the longevity of their employees and the family atmosphere. Everyone wants to work for a market leader. Reflect on the senior leadership of Linked In and Google. They make it a point to define the culture of the organization and create a vibrant morale for their employees. It is not just free perks, but the fabric of the organization is built on the culture of innovation. However, with the company not expanding, no innovation, reduction in revenues, the existing team has to carry the weight for those employees that have decided to leave. When critical areas are left understaffed, revenue often is reduced. Lost opportunities and declining customer satisfaction will result when key revenue areas are not appropriately staffed. Yes, your competitors will pick up on this aspect much like veracious sharks.

  • Uncle Sam changes the rules

Every business segment has a set of governmental regulations that were designed to protect the public to which it serves. However, the regulations designed to solve a problem often create more challenges to the business segment and perhaps a few opportunities as well. If the company is not poised to take on the new challenges or take advantage of the opportunities presented, the company may be headed in the wrong direction. For example, if a government program is eliminated, this generally causes a problem for others. What could the business create to solve that question? Where there is confusion, there is opportunity.

  • No defined strategy for the next year

Experienced senior leadership expends their plans over a three to five year period of time. Developing plans for the next business year should be a matter of strategy and budgets. Not sharing the strategy with the entire company can infer two things. Either the senior leadership does not have a plan or you are purposely being excluded. Either way, this is a definite signal to prepare yourself for your next career move.

  • Salary/incentive compensation cuts

Yes, it can happen. Even if the new compensation plan was blessed by the board of directors in the company, those plans can be changed during the course of a year. If you work on an annual bonus, those can be lowered and canceled as well. After you shout “that’s not fair”, welcome to business in the new millennium. As revenue continued to decline, the change in salary and compensation occurred in kind. The situation is similar to shutting off the lights on your dinner guests and handing them their coats prior to the desert course. Yes, this is a definite sign that the company is in trouble. Although you may still think the next fiscal year will be better, you may be in denial of the reality. The “ship is sinking and time to move toward the life boat”.

  • Senior leadership not communicating 

Pontification is not relegated to bloviating politicians. This attribute is equally distributed across many disciplines and business segments. Senior leadership is well known for their ability to talk endlessly to demonstrate their strategic plan. However, when this is not shared and the senior leadership is closed-mouth about the next year’s strategy at the end of the third quarter, the next move has to be you focus on your career. Senior leadership has one goal, achieving their year-end bonus. If your career stands in the wake of their bonus, you will definitely be eliminated prior to the year-end numbers. The senior leadership has to hit several metrics that are identified prior to the start of the year. ROI, ROA, profitability, expenses, stock price, head count, and a host of others may be a part of the calculation. Whether they earned it or not, it is the ratios that pay out the dividend. Realize that you are just a number at this point and your career is not their worry.

  • Limiting marketing or sales expenses

When a small fee to attend a conference to showcase your products is denied, we have to question the budget. The goals for both marketing and sales is to increase awareness and close sales respectively. Often companies have to spend money to make money with sufficient budget dollars to handle the annual expenses. When these mundane expenses are reviewed critically, and rejected, the signal to you is that there are larger problems that have not surfaced. Your company does not have to the largest display in the exhibit area, but have the product that will solve the potential client’s problems. The benefit of being at trade shows or events is that it reinforces the decisions of your customers on why they chose you for a business partner. If your people are not talking to your customers, they will be talking with your competitors.

  • Dissatisfied customers

When your customers are dissatisfied, disappointed, or feel slighted, this is a brand problem. The customer trusted you to solve a problem and back that up with service when service issues surfaced. This break in promise is a company-wide problem where everyone needs to play their role in solving the issue quickly. Regardless of your business segment, there is a competitor that will want their business and promise anything to gain that relationship. Sales and customer service is generally the first to identify service issues with clients. Those areas generally solve the problems in the short run until the client’s patience wears out. When your company senior leadership calls to sever relationships with clients, either they are not profitable, or the firm’s ability to service their needs is no longer in existence. When senior leadership will not consider revising the contract or pricing to make the client profitable, the signal to competitors is that there is something wrong with your business model.

  • Inventory shortages, Delivery delays, and Vendors not paid

These are classic symptoms of a deeper problem in your business. When any of these three issues are apparent, the company is in deep financial distress. Some issues with receivables and getting paid from your customers can lead to challenges throughout your value chain. Consistent challenges with these three areas will lead to reputation problems and distress to your company’s credit history. When vendors are not paid, the raw materials result in inventory shortages, which effect delivery delays resulting in dissatisfied customers. The customer service and sales teams will be challenged to keep the relationship solid with promises unfulfilled.

  • Bids not winning/no bids going out

Governmental agencies, large corporations, non-profits, and other industries send out requests for proposals (RFP’s), requests for quote (RFQ), request for information (RFI’s) that engage vendors at a high level. Those vendors capable to perform the work and document their procedures at a competitive price point win their business. Companies of all sizes engage professional bid writers or have their own bid departments that write the response and submit the company’s response. At the end of the year, much like the win loss ratios of professional sports teams, the company has a win / loss ratio. If this ratio is less than 35% wins to losses of 65%, the company is losing ground with development of new business. Every business experiences churn with their customers and needs to secure profitable new business in order survive. Failure to secure new business demonstrates the company does not have a competitive advantage as compared to other like competitors.

If you have read this far, you should be reflecting on your own situation. Does this scenario sound familiar? Do you have your resume, social profile, and network of colleagues available? Do you have sufficient resources to survive financially until you get that next position? Do you have transferable skills to a different industry inside / outside your vertical? Now is the time for reflection and self-examination. Your present company is not evil, but they are going through changes that they will end up making some difficult decisions. Some of those decisions are well placed. Other decisions are made by rookies who really should have spent more time in business school.

 

Dr. John G. Schwarm
Chair, MBA Program
Concordia University Chicago
May 22, 2018