Society

The Rise and fall of your organisations

POOR

Poor leadership can affect profits. FILE PHOTO | NMG

Summary

  • Going back to something you were before will increasingly sound like a useless defense mechanism.
  • Moving forward and integrating technological revolutions in your ways of thinking and working will be a better choice.

It’s often quoted that organisations rise or fall on their leadership. During the first World War, British Soldiers were said to be Lions led by Donkeys this described the British infantry of World War I and to blame the generals who led them. The contention is that the brave soldiers (lions) were sent to their deaths by incompetent and indifferent leaders (donkeys).

Is there a parallel between “Lions led by Donkeys” and modern organisations management? At least there is a need to bring the engine room closer to the bridge.

The iceberg of ignorance study found that senior level management is often so far removed from day-to-day business operations that they fail to understand the systems and processes that affect both employees and customers. The most alarming result of this study suggests that this can have an impact on company profits by as much as 40 per cent. The iceberg of ignorance should be a concern for any company. Left unattended, the iceberg of ignorance leads to employee disengagement, frustration at the front-lines and consequently high attrition and poor business performance.

Organisations drift from insurgency to incumbency and lose their edge to bureaucracy. If you wish to kill a frog, throw it into cold water and slowly turn the heat up until it is boiled. The nervous system of the animal is too slow to notice the change in its environment and the frog dies happy. So why are organisations condemning themselves to slowly die, like the frog through procedures, complicatedness and bureaucracy?

Once an organisation is praised by its customers and recognised as market-driving, the temptation is high to become arrogant and pretend that we know better than our customers what their needs are. And little by little, we drift from the top right box to the bottom right. This move is insidious since, just like the frog, nobody waves the red flag of customer obsession since the financial numbers comfort us with the idea that we are doing it right.

When organisations and humans enter in a state of anxiety which is often the case shortly after reaching the number one spot, or when a crisis is looming, they drift from a high energy/high self-assurance mindset to one of high energy/low self-assurance. Yes there is energy but it is a nervous, almost desperate one.

What do humans tend to do when they are anxious? They tend to follow rituals, look for the providential saviour and do human sacrifices. Today this has become setting procedures, look for a new providential leader and lay people-off. When organisations and people are anxious, they forget the core of their strategy the customer, revert to procedures and comply to orders.

Whether you wish to maintain your number one status or go back to it, what can you do as leader? There are three things as turnaround leaders to do:

Don’t go back, move forward: Technological progress has revolutionised our ways of working. Going back to something you were before will increasingly sound like a useless defense mechanism. Moving forward and integrating technological revolutions in your ways of thinking and working will be a better choice. No organisation will revert back to what it was. Co-creating clarity about where your world, your organisation and your people go will be critical for sustainable and turn around.