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Is the company's management incompetent?

Three years ago, I joined the board of a company. At my first meeting, I knew the management was incompetent -- but it was three years before the rest of the board agreed with me, by which time, the company teetered on the edge of bankruptcy. At that point one of my colleagues asked me: "How could you tell we were in trouble when the rest of us didn't spot it?" The truth was I'd seen incompetence often enough to know it when I met it. Here are some of the telltale signs:

Bias against action. There are always plenty of reasons not to take a decision, reasons to wait for more information, more options, more opinions. But real leaders display a consistent bias for action. People who don't make mistakes generally don't make anything. Beware of prevaricators.

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A love of secrets. The CEO was always having confidential discussions that his staff feared sharing. You couldn't escape the impression that everyone got a slightly different version of the strategy, of the business, of the people. People who love secrets have trouble being honest and are afraid of letting peers have the information they need to challenge them. Secrets make companies political, anxious and full of distrust.

Over-sensitivity. "I know she's always late, but if I raise the subject, she'll be hurt," is an example of something you don't want to hear from a manager. The inability to be open, direct and honest with staff is a critical warning sign. Can your manager see a problem, address it headlong and move on? If not, problems won't get resolved, they'll grow. When managers say staff is too sensitive, they are usually describing themselves. Wilting violets don't make great leaders. Weed them out.

Love of procedure. Managers who cleave to the rulebook, to points of order and who refer to colleagues by their titles have forgotten that rules and processes exist to expedite business, not ritualize it. Love of procedure often masks a fatal inability to prioritize -- a tendency to polish the silver while the house burns down.

Preference for weak candidates. We interviewed three job candidates for a new position. One was clearly too junior, the other rubbed everyone up the wrong way and the third stood head and shoulders above the rest. Who did our manager want to hire? The junior. She felt threatened by the super-competent manager and hadn't the confidence to know that you must always hire people smarter than yourself.

Focus on small tasks. Another senior salesperson I hired always produced the most perfect charts, forecasts and spreadsheets. She was always on time, her data completely up-to-date. She would always volunteer for projects in which she had no core expertise -- marketing plans, financial forecasts, meetings with bank managers, the office move. It was all displacement activity to hide the fact that she could not do her real job.

Allergy to deadlines. A deadline is a commitment. The manager who cannot set and stick to deadlines cannot honor commitments. A failure to set and meet deadlines also means that no one can ever feel a true sense of achievement. You can't celebrate milestones when there aren't any.

Inability to hire former employees. Outstanding performers attract one another. But if you find you've hired someone who doesn't want to bring along past colleagues, something's wrong. Every good manager has alumni, eager to join the team again. If they don't, you should smell a rat.

Addiction to consultants. A common -- but expensive -- way to put off making decisions is to hire consultants who can recommend several alternatives. While they're figuring these out, managers don't have to do anything. And when the consultant's choices are presented, the ensuing debates can often absorb hours, days and months. Meanwhile, your organization is poorer, but it isn't any smarter. When the consultant leaves, he takes your money and his increased expertise out the door with him.

Long hours. In my experience, bad managers work very long hours. They think this is a brand of heroism, but it is probably the single biggest hallmark of incompetence. To work effectively, you must prioritize and you must pace yourself. The manager who boasts of late nights, early mornings and no time off cannot manage himself -- so you'd better not let him manage anyone else.

Any one of these behaviors should sound a warning bell. More than two -- sound the alarm!

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