In the ever changing global environment with steep local, regional and international competition, it is hardly a mystery that most successful companies value their executive teams.  However, it is still difficult for small businesses to enjoy the same level of advice and expertise because of lack of human capital management capacity.

Essentially, the most widely encountered issue for small businesses is within the monumental task of hiring and retaining an executive. The hiring by it selves is not as problematic as recognizing and cultivating talent.  In our opinion, the biggest factor in such decisions ends up being related to loyalty. It is not difficult to get lost in the sea of professional and personal connections, whereby the goal becomes fuzzier and personal accountability, efficiency and effectiveness take a second row to personal likings.

In spite of the simplified statement above, such loyalty issues can cost business owners a tremendous headache and lower bottom line. One of the most common circumstances occurs when unqualified personnel work their way up, not by actual achievements, rather than just extended time of employment.

The results are rather astonishingly flawed. Personnel in mid management and even upper management, end up being unqualified at best and a liability at worst ; hindering internal and external growth , upsetting the internal balance , creating resentment from internal and external entities , as well as hindering overall growth.

Ultimately, it is hardly a new issue. Small and mid size businesses simply lack the proper resources to be consistent in hiring, promoting and terminating executive employees, compared to their larger counterpart. However, the tell tales are not as complicated. As a small business owner, ask yourself some simple questions: when was the last time we brought a third party to evaluate our internal efforts in terms of effectiveness and efficiency? When was the last time our executives attended some trade shows? When did our executives attend a farther education course? Have any of our executives been published? Are they at least trying? How do our executives keep up with the latest in our industry? Etc.

Note of caution: just because a business owner thinks highly of an executive team member, it does not mean that the particular person is actually competent. Nor does it mean that the particular executive is worth his / her money. It simply means that he or she has been noticed. It doesn’t mean more; it doesn’t mean less.

In the coming days and weeks, we will explore the details of how to spot an executive that is more harmful to the organization than anything else.

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