How to Turn Around a Demoralized, Underperforming Group by Steve Tobak

Fantastic writeup about what can erode group performance, and the steps you can take to correct it ... or at the very least, address it. 
----------------------------------------------------------------------------------------------------------

For every highly motivated and high-performing workplace group, you’ll find one that’s demoralized and demotivated. No, I don’t have data to support that statement, but it’s a reasonable hypothesis based on decades of experience. And during these tough economic times, it’s probably an understatement.
Regardless of the shape of our economy, sometimes entire departments, divisions, or groups can become demoralized, unproductive, and ineffective. In my experience, it comes down to this: in every company, there are unloved groups that, for a variety of reasons, get the shaft. This phenomenon is usually the result of some combination of five factors:

1. The group is not a key revenue or profit center, has been devalued due to a merger or change in strategy, or is an expense or administrative support function
2. The company’s specific type of business or its DNA
3. The CEO “just doesn’t get” what the group does or, perhaps, why it exists at all
4. Incompetent management incapable of managing up: educating, promoting, and politicking for the function; or worse: overpromising and under-delivering
5. The group actually performs poorly, resulting in a justified bad reputation

For example, in the high tech industry, engineering and even IT groups can be revered while perceived “soft” functions like marketing and HR can be left out in the cold. Sales is a tossup, mostly depending on factors 2 and 3.     
Sometimes one or two factors lead to others. Factor 4 can lead to 5 via the Peter Principle. Incompetent group management can influence CEO behavior, and vice versa. And poor performance, unchecked, can lead to a bad reputation, reinforcing poor group morale.    
Maybe it’s Karma or because I like to fix things, but for whatever reason, I’ve taken over quite a few demoralized groups. Each time I learned a bit more, resulting in a methodology that actually works:
5 Step Process For Turning Around a Demoralized, Underperforming Group

1. Understand how it got that way. Take the time to meet one-on-one with key executives, stakeholders, and of course, your staff. Ask the tough, leading questions and make sure you get honest, non-sugarcoated answers by assuring confidentiality.
2. Pick your team. Not only the “keepers,” but who needs to go once you’ve determined you can’t turn them around. Round out your team with key new hires. “Feed” your lieutenants with encouragement, team building, and most importantly, showing your confidence in them by making them responsible and holding them accountable.  
3. Begin the process of rebuilding the group’s reputation within the company. Once you know executive management’s and key stakeholder’s “hot buttons” and have your team ready to go, you can begin a sort of turnaround process that includes the following.
4. Set challenging but achievable goals and expectations with specific metrics and rally your team to meet them. This is critical to gaining credibility and beginning to turn around perception and morale. At the same time, educate executive management and key stakeholders on the group’s value proposition. 
5. Once you begin to gain some credibility traction by meeting expectations and showing the group’s value to the company, you can begin to manage up, promote the group, and vie for resources more aggressively. The entire 5-step process, if well executed start to finish, takes a year or two.  

http://blogs.bnet.com/ceo