8 Red Flags That Your Business Is Dysfunctional

October 19, 2016

Businesses just like some families and individuals can be dysfunctional. While a dysfunctional business can be improved, owners and managers must first recognize the signs of dysfunction and acknowledge its existence. Without first conceding the fact that operational inefficiencies are present, then no remedies can really take place.

The following are seven typical dysfunctional red flags.

1. No leadership - It all starts at the top and permeates downward throughout a business organization. This means that if leadership at the top is good, then every layer on the organizational chart below the top will recognize the importance of good leadership and imitate positive traits. Conversely, if leadership at the top is weak or in some cases non-existent, then lower management will also imitate those traits contributing to organizational inefficiency. Everyone in a company recognizes top management leadership weakness and signs of organizational disinterest. When this is present, each subsequent level of management will equally display the same signs of indifference.

2. No training - Interview, hire, and good luck is the mantra for many dysfunctional businesses. In other words, once an employee is hired and placed into a specific job, there is no frequent or even infrequent training or mentoring. The employee is left to “solo,” lean on others, and hope for the best. Sometimes the job is learned correctly while other times, it is learned wrong. Unfortunately, no one cares…until the job is so messed up that the employee is fired. Not a good situation for either.

3. No communication - Again, it all starts at the top, so when the “top” doesn’t communicate with the next level down, none of the important information gets filtered to the bottom. Employees are left to guess and speculate about the company, its future and their future. This atmosphere is ripe for gossip and disenchantment.

4. No teamwork – When no teamwork exists, employees care about one person and one person only...themselves. They are not interested in helping colleagues and don't expect to get help in return. The phrase, "It's not my job," is heard often. New employees are left at the mercy of senior employees as they share what they want to and when they want to. One for all and all for one is definitely not a guiding principle for a dysfunctional business.

5. No loyalty – Employees generally have no loyalty in a dysfunctional business. They have one purpose in staying...paychecks and benefits. Making a profit, satisfying customers, or trying to do a better job is of little interest. When the business is dysfunctional, so are employees. 

6. No qualifications - One thing that “irks” employees is seeing someone hired or promoted into a position in which the employee has little experience or qualifications. This happens when the personal interest of the hiring manager overrides the company interest. Maybe the hire is for convenience, an acquaintance, a favor, or just too much trouble to take the time to conduct in-depth interviews. Whatever the reason, this helps promote a dysfunctional atmosphere.

7. No response - One impasse to operational efficiency is a “no response” atmosphere. This is when one employee asks a question or makes a request of another employee (management included) and receives no response. Although emails are a quick, easy, and efficient form of communication, operations become inefficient when questions and requests are ignored. Rather than hitting the “reply” button, which is fast and simple, disregarding answering an email or other form of communication adds to business dysfunction.

8. No fairness - Of course, this is the killer trait of all dysfunctional businesses. When management shows favoritism to a few and ignores the majority, those employees not part of the “privileged class” become disenchanted in a real hurry. This management technique is a fast-track cause of employee de-motivation. 

Look at all the signs

Dysfunction in a business can negate all the positive things a business might be doing. Strategic planning, customer service, target marketing, or quality controls will never produce a long-term, profitable business if, overall, the business is basically dysfunctional. Profit and success in the short-term will eventually be eroded. Look at the seven red flags of business dysfunction. If you see that they are present in your business, take corrective action now rather than later to remedy those deficiencies leading to business dysfunction.