By Holger Rathberger
Poorly managed companies are running out of cash and leaving the playing field. That's the rule of the game. But increasingly, and worth noting, we also see well-managed companies run into trouble. Why?
If you take the time to dig into their story, here is the pattern you will find.
It often starts with a high dose of success, real or anecdotal, recent or not so recent. In other cases, the organization gets away with mediocrity for an extended period of time in a protected space.
In both circumstances, complacency easily sinks deep into an organization, more often than not starting from the top. It's not that people didn't notice issues as they arose, some of them very serious, but now fingers notoriously point to others - other departments, units, geographies, or layers up or down the organization.
Windows of opportunity still open and close, but with complacency in its bloodstream the organization increasingly fails to pull itself together fast enough to make the necessary leaps and trade-offs to capitalize on them. In some markets the effects are dramatic and immediate.
In other markets they are more gradual. Eventually, though, the numbers speak the truth and turn from good, to not so good, to ugly, and then at some point the top team shouts "enough!" and tightens the reins. This gets them into even more trouble.
With the best intentions to turn things around, management takes all control and decision-making back into their own hands, installing a tight regime of budgets, forecasts, plans, scorecards, reviews, and approvals.
A bunch of consultants may invade the company and have people fill out their templates. Numbers get crunched and 100+ slides are discussed behind closed doors, more requests for information, more crunching, more slides.
And where complacency existed a while back, it is now replaced by frenetic activity. People are working long hours, but only one or two levels down into the organization, the line of sight between the work and the central issues facing the organization is broken.
People will tell you they are doing everything they can and there is a lot of urgency about this or that, but the only thing they are truly urgent about is protecting their job, their team, their budget, their status, or anything else they are deeply attached to.
It is easy to misread the signs. People aren't speaking openly about their fears, anger, overload, and anxiety - but those are the main drivers of their behavior. For a short period of time, it can work.
So encouraged by the returns, the top team pushes down on the pedal even harder. But, and this is the big but, as a strategy it will not serve you well. In fact, the kind of false urgency that this environment creates can be even more insidious than complacency.
Back to the starting point: When complacency is the problem, more management, however hard and smart is not the solution. It is just not.
The more promising bet is on leadership.
Complacency starts at the top of a team, school, organization, or corporation, and so does urgency. Leaders act to create a sense of urgency among enough people whose help is needed to move forward, decisively. In his book: A Sense of Urgency, Dr. John Kotter outlines the strategy and tactics that leaders have successfully used under these circumstances.
Do not take urgency lightly. In larger organizations it takes months of coordinated efforts by many, before there are enough people urgent to make a strategy successful. You know, you have made a big step forward, when you see people, lots of people, raise their hands, rather than pointing fingers.
In the end, it is not about how fast you get off the block, but how strong and fast you finish.
