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A Mistake That Cost A Company Thousands

The Clifton Review is a tri-weekly column that examines the question of the Clifton project along with the evolution of the war between two billionaires. We covered the start of this war with articles describing the battle over easement rights, the mysterious burning of a home, the blocks to rebuilding, and countless questionable court filings.

While the 2018 series salutes fashion mogul Peter Nygård’s Golden Jubilee detailing his rags to riches story, his incredible business success over these past fifty years and an inside look at how he did it, The Clifton Review will also continue to address current affairs as they relate to the good of The Bahamas.


A Mistake That Cost A Company Thousands

By P.J. Malone

What happens when a company’s strategies, approaches, and processes are not aligned? That company can lose thousands of dollars and have no idea it is happening.

We have outlined a number of strategies for how to increase customers and business income in the face of new competition. If you remember, this series of discussions began with looking at how to achieve the kinds of success that fashion mogul Peter Nygard has over the last 50 years where he has taken a struggling company and turned it into a multi-million-dollar enterprise.

As you can imagine, Nygard’s success has come from a continuous step-by-step process of constant analysis and strategizing that involve an intricate series of processes and approaches. In other words, there are a number of components that crucially have to be aligned to achieve business goals and phenomenal success.

Previously we talked about setting the right foundation for success by treating employees as ‘employee-partners’ and sharing with them what the business is about, what goals are set, and what strategies have been identified for achieving them.

Before we discuss employees’ role in helping you to achieve your business goals and how to motivate them to do that, let me illustrate how motivating employees in the wrong way can hurt your business.

While an organization was undergoing an organizational review the following situation was discovered: 

An organization development (OD) practitioner was hired to do a review of a financial services company because the HR (Human Resources) director felt that the company was losing out on potential sales based on certain observations she had made. 

Turns out she was right. There were a number of things happening within the organization that was hurting the company’s bottom line. But here was the most egregious that was unknown to any of the company executives before the review.

One of its primary departments was focused on selling a particular kind of investment product to millionaires and billionaires. The department was doing extremely well in sales of the company’s key financial product.

When the OD practitioner interviewed the individuals within that department as a part of her review, she made an astonishing discovery. One individual admitted that once they established a connection with a millionaire and got them to purchase their financial product, they didn’t share that connection with anyone.

What does that mean?

Well, the sales person admitted that when the client inquired about other financial products the company offered—that the client was interested in investing in—he and his coworkers would tell their clients that the company didn’t sell those other financial products.

Why did they do this?

The company’s additional financial products were sold by another department. However, the sales people of the primary department wanted to leverage their connections within their own department. Besides bonuses, these sales people noticed that the person with the most clients were promoted: This didn’t translate to the most sales; it translated to the most connections to rich people.

Think about it. If other employees in another department had a connection to the same rich client, then it takes away the existing sales person’s exclusivity. If there is no exclusivity, there is no reason for the company to reward one individual because of a connection to a millionaire.

There was a culture within this primary department of the employees focusing on establishing exclusive relationships to millionaires that was detrimental to the company’s bottom line.

How could such a thing happen? Stay tuned to find out.

Written by Jones Bahamas

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