Employees and managers who possess specialized technical knowledge, extensive authorities, and critical relationships essential to a company's operations can be referred to as "Key Persons" or "Core Employees." Examples include a financial manager who manages finances from memory, a technical engineer who alone understands the factory's internal production system, or a general manager's secretary who exercises their authority, maintains significant stakeholder relationships, and may even direct department managers from their office.
Key or core employees in any company typically exhibit several characteristics: they rely on memory to retain information and avoid documenting it to maintain control over that information, ensuring the company's constant need for them. They also use verbal communication for assignments and work procedures, operate without written operational manuals, and do not establish indicators for evaluation and control. A key person often uses their knowledge as leverage to obtain benefits or avoid accountability.
To consolidate their control over the company, they act as a barrier between management and employees or between the company and its clients. This means the company becomes completely paralyzed in the event of the employee's absence.
Risks of Relying on Key Persons in a Company:
- The company faces paralysis and halts operations when any key employee is absent, meaning the company is effectively held hostage by one or a few individuals.
- The company cannot expand due to a lack of transparency, absence of information, and the possibility that networks of relationships among key employees may actually constrain the company.
- The company lacks an internal system, regulations, and operational manuals, which diminishes its value and makes it vulnerable to collapse at any time.
- The work environment turns into a negative one that drives away competent professionals. Individuals connected through relationships with key persons are promoted, while competence-based criteria for hiring and promotion are lost. This erodes employee trust in the company and leads to the proliferation of internal factions.
How to Confirm if Your Company Suffers from This Problem:
- The company is unable to complete certain tasks, such as closing the budget, setting the production plan, or establishing the HR budget, without specific individuals being present in the office.
- Company clients prefer to deal with specific employees only, indicating that the relationship is with the employee, not the company.
- Projects are halted or delayed because a specific employee is on vacation or difficult to reach.
- Certain individuals have become reference points to whom employees turn for every small and large matter.
- There is no clear, formal organizational structure, with obvious overlaps in responsibilities and roles. Management levels are not real, as some employees have authorities and powers that do not align with their position on the organizational chart.
Practical Solutions to Reduce Reliance on Key Persons:
There are several important steps that can help companies reduce their dependence on key persons:
- Design an organizational structure to ensure the distribution of authorities and responsibilities, preventing the concentration of tasks in one person's hands. This structure prevents the formation of pressure groups within the company, reduces informal relationships or factions, and ensures everyone works to achieve the company's goals rather than personal gains at the company's expense. It also helps establish accountability and monitoring frameworks.
- Develop operational manuals for all company processes, outlining procedures and standards according to best practices. This eliminates the need for specific individuals to perform tasks, allowing any new or experienced employee to take over easily.
- Implement a performance evaluation system based on Key Performance Indicators (KPIs), linking each performance to precise, measurable indicators, and reducing reliance on verbal or biased assessments.
- Establish a continuous program to develop second-tier leadership, ensuring an immediate replacement for every key person, thus guaranteeing business continuity in case of their departure or absence.
- Adopt digital systems for financial, administrative, and operational processes to reduce dependence on individuals, minimize waste, and ensure transparency.
Proposed Solutions (and Related Services):
- Documenting processes through operational manuals.
- Designing a clear organizational structure to distribute tasks and authorities.
- Developing succession plans for critical positions.
- Implementing digital systems to reduce reliance on individuals.
