My faithful staff are leaving in droves. Help!

Dear Aunty B,

Two years ago our firm completed an acquisition, which looked good on the surface and was signed off by accountants and auditors, only for us to subsequently find out that the accounts were misleading and we have ended up in court with the original owner.

This has really divided the company with employees from the original firm led by their accountant claiming we are chasing a needle in a haystack (although it is a sizeable amount) and are bullying the owner in his retirement. While I have been really angry about the duplicity I would be willing to let the matter drop, but I have a few investors who are furious and want to pursue this out of vengeance.

But that’s not my real problem Aunty, which is that my old employees whom have been very faithful to me are leaving because they hate the new divisive culture where time is being spent on litigation and talk rather than growing the business. The whole thing is impacting on our profitability so I want to know two things. How could I have avoided this and what do I do know?

I feel like the ham in the middle of a cheese sandwich being eaten by a vegetarian.

Any ideas?

Dear Ham,

Heavens! You are feeling a bit out of sorts. Look, this is where you need to urgently take a strong leadership position. If there is one thing that investors understand it’s profit.

You must go to them and point out the cost this is having on the firm. And not just the cost of the litigation. Have a look at these costs:

• Lost productivity is costing you X amount.
• Lost opportunity is costing you Y amount.
• Disharmony among staff is costing you Z amount.
• Senior employees leaving are costing you … a lot.

Get my drift?

Then add it all up, wave it under their nose and tell them you are moving on. You have moved on emotionally and unless you agree to settle you will move on. You may well have to threaten in order to get your way.

Also show your investors your plan. You want the case settled in the next few weeks, an announcement to staff made and then some bridge building activities embarked upon. You need to try and stop any more staff leaving by outlining their importance to the new strategy and make sure they see an increase on their incentives. And if I were you I would have the owner in for a drink and agree to bury the hatchet.

How could you have avoided this? Hard to know. Better auditors at the beginning? A determination not to let yourselves get dragged into expensive litigation? A willingness to give a little?

Sometimes in business we are too obstinate, pedantic and rigid and that stops us
responding in a fast, swift and wise way which keeps us stuck on a path that in retrospect is the wrong one.

Be smart,
Your Aunty B

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