7 Business Scenarios that Can Send Companies Sliding Into the Gap Trap

By August 30, 2019 General

The Gap Trap doesn’t discriminate. It will swallow up profits and hard-working people from any business, especially those that aren’t carefully minding the development and productivity of its people.

I’ve recently written about the sinkhole many executives, managers and companies find themselves in when chasing results at the expense of growing people, and it serves as a precursor to the scenarios that follow. While we know that any company is capable of chasing and securing limited, short-term results, companies that take a balanced approach to producing results and growing people for the long-term will be better positioned for longer-term success. 

Because being in the Gap Trap is ultimately a product of our own doing, there are some realities that can be acknowledged about the DNA of a business that can lead to the Gap Trap. I’ve listed out some of those realities and business scenarios so you can see if your company fits the mold. Awareness of the common snares that can lead to the Gap Trap is critical if you want to avoid it. 

Here are seven business scenarios that can signal the Gap Trap is lurking: 

  • Large publicly traded companies chasing quarterly results. This is done to appease shareholders and Wall Street, and it makes these organizations highly susceptible to talent problems and a Gap Trap reality. In doing so, marginal performers in particular, and people in general, aren’t being developed and managers take on more work to achieve results. 
  • Smaller companies that generally don’t think about productivity. Failing to improve productivity 3-5% annually is a warning sign of trouble to come as mentioned above. Typically if people don’t grow, companies can’t grow profitably. Small companies are biased to focus on business related things because they haven’t experienced the problems associated with failing to grow their people.
  • Companies owned by private equity that generally push for unsustainable results. “Turnaround” investments of this sort forces financial improvements for the short-term and/or unsustainable growth. In many cases, fewer people are working more hours, and the company embraces practices to prepare the company for a future sale that often proves detrimental in the long term. Their goal is to buoy profits and cash flow, which leaves company culture, talent and long-term business health under-developed or deflated.
  • Fast-growing companies, highly-profitable companies, and slumping companies can all be magnets for marginal performers where there is a failure to grow people.
    •  Fast-growing companies are often a product of market forces allowing that growth (right place, right time, right product). Adding and promoting people is deemed necessary to keep up with demand, which comes at the expense of thoughtfully developing the team. You’ll often see people promoted from being an individual contributor in one year to managing 10-15 people the next, but aren’t given any formal management training. Senior management will almost always say, “We’ll do training when things are less hectic.”   
    • Highly-profitable companies often have a disproportionate number of marginal performers and declining productivity. Their profitability makes it easier for them to accept the marginal performance rather than help the person improve. They develop structure, systems and processes to “work around” the marginal performer that less profitable companies can’t afford. 
    • Slumping companies that are barely hanging on face a multitude of issues and are focused on staying in business. The belief is there isn’t the time or talent available to train the marginal performer and it’s not a business priority.   
  • Some business models naturally push toward the Gap Trap. Hospitals, nursing homes and home health care agencies see high levels of burnout. They all are biased towards “more, faster, better with less” business strategies in order to maintain their margins. And technology doesn’t always produce the intended improvement in productivity. In fact, it often makes their ability to do their realjobs more difficult. 

Understanding the DNA of your organization can help management and individual managers determine if it is naturally predisposed to Gap Trap realities. (Self-awareness is the essence of leadership.) Even if it is, focused management pros who recognize this can influence the company to develop the disciplines that lessen the damage and better keep it out of harm’s way. 

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