What executives should consider about … known issues

Every corporate executive has a reference to a “known issue” sitting somewhere on his or her desk. It’s most likely in the middle or toward the bottom of a stack of memos or back a few days on the computer’s list of emails. The known issues are the problems everybody knows about and no one is actively addressing.

It might be about the inadequacy of the company’s accounting software and the inability of the finance department to produce accurate and timely reports. It might be about the slow pace of production in the engineering department. It could be about a key executive’s inability to cooperate and work effectively with his or her peers.

The fact is that it’s more than likely that there are many references to and complaints about known issues on the CEO’s desk. The reason they sit on those desks and slowly migrate to the bottom of the pile is because they are difficult, sometimes complex issues that aren’t easily disposed of.

Take, for example, the accounting problem. Is it really the software? Can it really be that the company has spent hundreds of thousands of dollars on the software and upgrades and the system still isn’t working as it should? Or is it the CFO or the controller? Do they really know how to use it?

And that key executive, why is everyone so up in arms about him? Is it because he’s finally trying to hold his people accountable, which is good, or is it because he really doesn’t have the people skills or the personality to be a team player, which would be a truly difficult and sensitive problem to address?

The known issues can’t be handled with simple solutions. Just inquiring about them can create defensiveness, tension and backbiting in the executive corps. The solutions all seem messy and costly and all would require an extensive, stressful investment in executive time and energy.

So they sit on the desk as if tomorrow or the next day there might be an epiphany that provides an easy and painless resolution. Eventually, when the stack gets too high, those on the bottom go into the wastebasket or the emails get deleted because there are three more, higher up in the pile or inbox that refer to the same problem.

Known issues don’t resolve themselves. That’s why they keep popping up in memos and emails or in cafeteria conversations. The term has come to mean “We know it, but we’re not doing (or believe we can’t do) anything about it.”
There is a conflict here about three types of pain and cost. There is the pain of the disruption of investigating and addressing the issues. This pain is generally short lived but results in eventual healing.

Then there is the pain and costs of inaction, which compound every day. How much are the problems in accounting costing in good money after bad? What types of critical errors and missteps will occur because the key executive is considered unapproachable? How many inefficient or awkward “workarounds” have become part of the company’s work flow?

Finally, there is the pain in the cost of the loss of leadership credibility and capability. Since known issues often involve the need to address difficult performance issues, the employees, including the executive staff, look to their leadership to solve them. They expect there will be accountability, fairly and evenly applied, or they expect there will be none. In the absence of a will to act they will ask “why” and there will be no good answer. This pain lingers and ebbs and flows, it never goes away and it never stops eroding the executive’s ability to lead or manage.

It’s clear that the productive pain is the pain of taking action. Known issues create all sorts of other and associated issues. They become or often are the root causes of inefficiency and substantial frustration. It takes a strong-willed leader and a clear orientation to results to define them, address them and drive them to resolution, but doing so can revitalize a company by restoring optimism and confidence that management has the strength, courage and vision to act upon issues that belong, not at the bottom of the stack, but at the very top.

Next: No Fault Reorganizations

Tom Aranow is a former CEO who now consults with CEOs and other executives as a Senior Advisor with Harrington Daniels Advisors, LLC. He may be reached at Tom@hdadvisors.com.