10 Reasons For Corporate Failure And How To Prevent It

Neil Steinmann, renowned psychologist, and Prof Nico Martin, discuss the 10 reasons for corporate failure in South Africa. The article is based on research done by both parties with the main focus "to identify key problem areas that exist in South African teams." 

A team is a small number of people with complementary skills who are committed to a common purpose, performance goals and an approach for which they hold themselves mutually accountable. A work group becomes a team when:


• Leadership becomes a shared activity;
• Accountability shifts from strictly individual to both individual
and collective;
• The group develops its own purpose or mission;
• Problem solving becomes a way of life, not a part-time
activity; and
• Effectiveness is measured by the group’s collective outcomes
and products.


Building and maintaining successful teams is no simple task. Why do some of our teams achieve the highest level of performance? What could account for their success? Is it a strong work ethic, is it individual brilliance, or can success be attributed to chemistry? What about leadership? As South Africans we are fond of investigating, appointing commissions of enquiry, or simply probing reasons why our work and even sports teams fail. Poor performance will somehow be followed by an investigation.

 

Neil Steinmann 

Neil Steinmann 


A Study Of South African Companies


In a recent study we conducted to investigate the performance of natural work teams in corporate South Africa, the main focus was ‘to identify key problem areas that exist in South African teams.’ We also learned some valuable lessons from those that are successful.

The study looked at 150 South African organisations and more than fifty percent of those companies responded. The good news is that there seems to be an indication of a common set of problems facing teams. The bad news is that these factors are affecting the majority of work teams in South Africa. According to the study, ten common themes or factors have emerged that provide strong evidence why teams are not effective or often even fail to achieve their objectives.

  1. LACK OF TRUST
  2. WEAK TASK LEADERSHIP
  3. POOR IMPLEMENTATION / NO FOLLOW THROUGH
  4. NO FOCUS
  5. POOR INTERPERSONAL SKILLS
  6. LESSONS AND MISTAKES NOT ACKNOWLEDGED
  7. POOR INTERPERSONAL CHEMISTRY
  8. COMMITMENTS FROM TEAM MEMBERS
  9. WORKING IN SILOS
  10. LACK OF MANAGEMENT SUPPORT

1. LACK OF TRUST BETWEEN TEAM MEMBERS
Team members and management were cited as the most important factor why teams are not effective or fail! We seem to be a society in search of trust. In parastatals, private business and interpersonal relationships, we search for it. Jack Welsh, former CEO of General Electric sums up the challenge as follows:

Building trust seems to be the most elusive ideal for teams but creating it could be your greatest competitive advantage. Pennington argues that a lack of trust is the number one leadership problem facing our country today. Leaders who fail to do what they say they will do, even in the most minor areas, reinforce the belief that no one can be trusted.

2. WEAK TASK LEADERSHIP
This refers to no strong leadership in the team, a lack of strong individuals with particular skills and knowledge/expertise taking responsibility in different situations to see things through. While teams do have form leaders, it should be critical for teams to learn to shift leadership functions. The circumstances, needs of the group as well as the skill of the members should determine responsibility for specific functions in the teams’ success.

3. POOR IMPLEMENTATION / FOLLOW THROUGH
Teams have wonderful ideas with people starting them off, but no one is prepared to see them through. No one takes ownership to drive things to the end.


4. NO FOCUS
The team tries to do too much at the same time.


5. POOR INTERPERSONAL SKILLS
This includes poor communication and ineffective conflict handling.

6. LESSONS AND MISTAKES ARE NOT ACKNOWLEDGED
There is no continuous learning or culture of improvement. The team does not take time out to evaluate performance and determine what they can learn.


7. POOR INTERPERSONAL CHEMISTRY
There are often lone individuals, dominant self appointed experts, and a lack of understanding of diversity and cultures.

“The influence of a trusting relationship has an impact on the performance of teams."


8. FALSE COMMITMENTS FROM TEAM MEMBERS
Individuals do not display long-term commitment. People shout their agreement, but when it comes to getting the job done, no one is available. People won’t do their best unless they believe they are treated fairly. The only way I know to create some kind of trust is by laying out your values and then walking the talk. You’ve got to do what you say you’ll do consistently, over time.”

9. WORKING IN SILOS
Smaller teams within the team do their own thing, “reinventing the wheel.”


10. LACK OF MANAGEMENT SUPPORT
There is no proper support and backup, no funding or availability of technology and equipment.

Implications for South African Companies

The results indicate that trust, leadership and follow through are key reasons why teams are not effective. This study emphasises the importance of trust building processes in leader follower relationships. The influence of a trusting relationship has on impact on the performance of teams, conflict, change, communication and diversity management.


A Checklist Of Things To Do To Achieve Good Teamwork:


• Establish urgency and direction;
• Select members based on skill and skill
potential, not personalities;
• Set performance-orientated tasks and goals;
• Set overlapping objectives for people who
work together;
• Assess people’s individual and group
performance;
• Encourage people to build networks;
• Describe and think of the organisation as
a system of interlocking teams united by a
common purpose;
• Use training programmes to build
relationships; and
• Use teambuilding and interactive skills training
to supplement the above points.