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Paul Burri: Management’s Responsibility

Management ultimately is responsible for the successes and failures of any organization

Who should get the credit when an organization succeeds? Conversely, where does the fault lie when an organization fails? Whether it’s a business, a nonprofit, an association, a school, a government agency, a club or even a church, I believe the ultimate responsibility for success or failure lies with the management.

Paul Burri
Paul Burri

That management could be a board of directors, a management team, a steering committee or an individual. In any case, the management is ultimately responsible.

Certainly all organizations are affected by external forces that may or may not be beyond the control of management, but it’s always management’s responsibility to meet whatever challenges appear and to take steps to counteract them. And it’s absolutely no excuse for management to ever say that he, she or it (in the case of a board or committee) had no knowledge of the situation. That’s management’s job.

When the management of an organization chooses to ignore problems — as too often happens — or worse, fails to act on them, it’s time to replace that management. It is not an excuse to say that they didn’t know there was a problem or to deny that there even is a problem. We’ve all heard the story of the huge pink elephant in the room that everyone pretends isn’t there. Doing nothing has never gotten rid of the elephant.

Let’s look at a hypothetical termination interview between the manager of a company and his “higher power,” whether it’s the stockholders, the board of directors or the owner of the business.

“Good morning, George. I have some bad news for you. The company has been failing in various aspects (losing money, producing poor product, losing members, failing to meet quotas — fill in the blank) and since that is your responsibility, we have decided to terminate your employment effective immediately.”

“But sir, I didn’t know that we have been (losing money, losing members, etc. — again fill in the blank). Had I known, I would have taken steps to correct the situation.”

“George, that is also part of the problem. You were supposed to be aware of all the company’s problems. That is your job. Your ignorance that the organization was having problems is, in itself, a problem.”

What often happens when management finally gets around to admitting there might be a problem? (Note that management doesn’t admit there is a problem; they merely admit that there might be a problem.) Simple: They hire an expensive outside expert — sometimes referred to as a consultant. There are those cynics among us who refer to consultants as expensive smart alecks from out of town who borrow your watch to tell you what time it is.

The expert comes in, snoops around for a week or two, asks a lot of questions, charges a lot of money and produces a report that often suggests you really know what the problem is and that if you form an internal management committee — consisting of the same do-nothing people who have been ignoring the problem all along — you surely will see what the problem is and know what to do to correct it.

Thank you very much. Problem solved.

— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business, but he is a small-business counselor with the Santa Barbara chapter of Counselors to America’s Small Business-SCORE. The opinions and comments in this column are his alone and do not represent the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address).

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