Seven avoidable mistakes that lead to organisational decline
Image courtesy of Bermix Studio on Unsplash
There is a commonality between organisational decline and improvement. Often the distinguishing features are the small margins and fine points of detail. For those organisations that fall into decline, it is seldom the big issues such as financial mismanagement, poor customer service or declining sales that bring them down. By the time those factors come into play, the organisation is already in an irreversible death spiral. On the contrary, look several levels below the major fissures for evidence of the hairline cracks of decline. It is there that the real damage is done.
As this blog makes clear, there are a cluster of mistakes that contribute to organisational decline. By themselves and even in the aggregate, their impact will not be terminal. However, what they do is function as accelerators. They anaesthetise an organisation and make it possible for more serious damage to be done. The good news is that these mistakes are not just easy to spot, if they are attended to early enough, the havoc they cause can be mitigated.
Set out below are seven easily avoidable mistakes that lead to organisational decline.
1. The absence of outrage
Outrage speaks to organisational temperament. The question is: what type of event would an organisation deem outrageous? What would it find to be so egregious and intolerable that it could not simply ignore? These are not trick questions, but the answer would reveal everything about the temperament of that organisation. An organisation that could only muster outrage about major issues rising to the level of gross misconduct, has become de-sensitised and even insensible. By contrast an organisation that is outraged by relatively small things shows a high response to stimuli and an intolerance of anything at odds with its values.
2. Neglecting to diagnose the reason for employee departures
Every organisation deals with data and the larger the organisation the more data it generates. One of the richest sources of data available to an organisation is from departing employees. No other employee group will offer opinions as unvarnished as those with nothing to lose. These data, if properly analysed, can provide crucial insight about the business climate, specifically underlying concerns. Sadly, organisations perceive these data as of lesser value and therefore fail to exploit it. This is likely because, where insights challenge organisational practice, they are easier to label and dismiss as the views of disgruntled departing employees.
3. Failing to follow through on respect and dignity at work
A respect and dignity at work policy is one of the most important policies that an organisation can have. Cleary set out within it, are the expectations of all employees. Properly embedded, it will inform job descriptions, the recruitment processes, leadership development and appraisals. In terms of embedding organisational values and helping leaders to model desirable behaviours, there are few better frameworks than respect and dignity at work. Unfortunately, for organisations in decline, respect and dignity at work is never worth more than the ink and paper that the policy is written on. This lack of farsightedness speaks to a culture of organisational neglect.
4. Addiction to ‘employee initiatives’
Organisations use employee initiatives to engage staff and deliver business goals. To that extent, if taken seriously, they can be highly effective vehicles for achieving change. The problem arises when initiatives become a comfort blanket or a proxy for meaningful and challenging conversations that never actually take place. Follow these initiatives through and you will likely find that they are either so superficial as to be inconsequential or they are heavily promoted at the beginning, with little to show by the end. The danger is that either of the above outcomes can draw intense cynicism from the workforce and prevent more substantial engagement when it matters most.
5. Failure to understand the mechanics of ‘grip and control’
The concept of ‘grip and control’ should be familiar to every organisation. For those with a highly disciplined organisational culture, ‘grip and control’ is a voluntary response. In other words, employees do the right thing without needing to be told to do it. However, for those, with a compliance culture, the ‘grip and control’ response is a primarily involuntary one, that compensates for the lack of business discipline. Whenever an organisation talks up its strong ‘grip and control’, don’t assume that they are celebrating their success. They are just as likely to be drawing attention to their organisation’s failure.
6. Confusing volume and value
One of the best measures of a healthy organisation is whether it has a representative workforce. Representation speaks to fairness, inclusion and opportunity. It is also a visible symbol to future employees that your organisation is a place that welcomes everyone. Unfortunately, organisations in decline see representation exclusively through the prism of volume (how many we have) not value (what are their experiences). Minimising workforce representation to little more than a numbers game doesn’t just trivialise the experience of employees, it also denies employers of the value that their employees can add as brand ambassadors.
7. Strategic neutrality
To ensure that resources can be committed and desired outcomes achieved, organisations need to make definitive decisions and cannot afford to be neutral. Particularly where strategic decisions are concerned, neutrality is seldom a healthy position for any organisation to take. So why do they do it? Primarily to avoid conflict, mitigate the risk of a perceived ‘harm’ or steady the nerves of anxious investors. For organisations that are in decline, neutrality is the established strategic default. It is important to note that neutrality is not the same as ambiguity. A decision to remain neutral is still a decision, the choice to be ambiguous is not.
With organisational decline, it isn’t the impact of the big things that matter, it is the cumulative effect of the small things that count. Think about it for a moment, a major event in an organisation be it a sudden loss of revenue, a significantly high turnover of employees or an unexpectedly high number of customer complaints, will likely catch the eye and should trigger a response. Not so smaller things and even less so uncommon issues that would not be in an organisation’s usual line of sight. However, because they are unobserved, their slow corrosive effect undermines business effectiveness and can lead to organisational collapse.
