Nov 02 2021| Leadership | leaders

The seven symptoms of a sick company and how effective leaders restore good health - part 1

Part 1 in this series of 7 short articles.

by Phil Eyre Leaders' Founder

Fostering excellent leadership that in turn creates sustainable, healthy workplaces is at the heart of our mission. We explored this with our Leadership Development cohort, a group of leaders drawn from very different organisations ranging from professional services to architectural practices. The group identified these symptoms of a sick company, how many of these do you recognise?

 

1. Attrition

Excessive employee turnover is often associated with corporate sickness. What constitutes ‘excess’ is situational and will depend on the nature of the company, the time of life of the company (e.g. start up or mature) and the particular challenges faced. Some employee attrition is healthy: people retire, some need to move on, growth requires change. 

We usually view much over 20% per annum as ‘excessive’; 35% and over can be fatal, especially if undesired and uncontrolled by management. At these levels, the costs are disruptive, let alone the damage to reputation which in turn makes rebuilding the team difficult - sometimes impossible - to achieve. High attrition can become self-fulfilling as team members become unsettled and competitors sense opportunity.

There is a further factor that our cohort identified. It’s not simply the rate of attribution; it’s the quality of the people leaving that is a stronger signal of sickness. Good people tend to leave first. They are unwilling to tolerate an unhealthy environment and are more able to move because they’re ‘good’!  Relatively low attrition rates can therefore be a signal of distress if the people leaving are talented and pivotal to the company.

Excellent leaders attend quickly to employee attrition. They take careful note of the reasons why people are leaving and the impact on the team, as well as considering ways to build back strongly. They don’t dismiss the problem, denying that there is an issue, and they don’t take initial reasons for employee departure at face value. They look more deeply and seek to understand the root cause. This takes time and a sophisticated approach in order to get to the truth.

 

To read about the second symptom of a sick company, click here.

About The Author | Phil Eyre

Phil is Leaders’ founder. He has an enthusiastic and inspiring style, drawing on his experience in business, academia and social sectors to help any leadership team to achieve phenomenal performance. Phil has significant expertise in sophisticated psychometrics and in the application of human data for individual, team and organisational success. He has trained with and been mentored by, global leaders in this field, notably Dr Chuck Coker in the US. Phil began his career in the UK offshore finance industry in 1994, working for a wealth management company, Canaccord Genuity Wealth International. Phil was head of the company's Guernsey division, with a staff of 120 and assets under management of £4.5billion before resigning from executive responsibilities in 2008. Since launching Leaders in 2017, Phil has worked with many senior executives and boards primarily in the Channel Islands and City of London. He regularly writes for a variety of business publications and is often invited to speak at events for institutions such as the IoD and the British Army. Phil works closely with clients on focussed projects and long-term retainers to raise leadership standards. He is a popular and inspiring educator and coach who, with the insights gained from psychometrics, is able to accurately detect the strengths and weaknesses in leadership teams and boards. Phil has served on the boards of various charities, ran the Guernsey hub of a national theology college, received accreditation as a pastor in the Baptist Union of Great Britain and is accredited in various motivation and behavioural techniques.

Next Article