Is the rise and fall of organizations unavoidable?

Friday April 28th, 2017 0 comments

“Now starts the most critical moment of our existence!” said the Board member while his people were celebrating their newly awarded World No1 status, “At this very hour somewhere at Headquarters, there must already be people paving our way to Hell with processes and procedures!” Six months later, he had left the company which was sold to a competitor a few years later. He had lost his battle against bureaucracy and “complicatedness” as Yves Morieux likes to call this defence mechanism.

The boiled frog syndrome

To that respect, I like the clip here below from Bain & Company:

 

James Allen’s message is clear: Organizations drift from “Insurgency to Incumbency” and lose their edge (which he calls Founder’s Mentality) to bureaucracy. Back in 1990, Peter Senge, in “The Fifth Discipline”, named the phenomenon described by Allen, “boiled Frog Syndrom”: 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 organizations condemning themselves to slowly die, asphyxiated by procedures, “complicatedness” and bureaucracy?

From Heaven to Illusion

Nick van Heck and Paul Verdin (see our blogpost the wake-up call) in their revolutionary VC2 Matrix provide us with a first psychological reason:

Once an organization is praised by its customers and recognized 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 (High Value Creation & High Value Capture) to the bottom right. This move is insidious since, just like the frog (and to the exception of a few whistle blowers), nobody waves the red flag of customer obsession since the financial numbers comfort us with the idea that we are doing it right.

Fear of losing

In 2011, I wrote a post (How Loss Aversion may unconsciously impact our strategic thinking) explaining the research of Nobel Prize of Economy Daniel Kahneman on the fact that Risk Aversion is an extremely powerful and unconscious defense mechanism in humans and that it strongly influences our strategic decisions. Could it be that the “incumbent reflex” (ie. play safe and hope that adding layers of procedures will prevent mistakes) is a consequence of our fear of losing?

Power Distance

Many plane crashes find their root cause in the fear that subordinates have to challenge their leader although he ignores facts and consequently takes the wrong decision… When an organization is successful and that Risk Aversion takes over, leaders will promptly edict rules and procedures in the hope of keeping the organization at the top. When there is fear, when the Power Distance is high, those who see on the ground that such procedures will further remove us from our customers, will sadly think job safety first and comply with the procedure…

Assumed usefulness

When organizations and humans enter in a state of anxiety (which is often the case shortly after reaching the No1 spot, or when a crisis is looming), they drift from a High Energy/High Self-Assurance mindset (also called “Purposeful state”) to one of High Energy/Low Self-Assurance (called “Anxious state”). Yes there is energy but it is a nervous, almost desperate one (see my blog post “Three lessons in team dynamics that business could teach sports”).

What do humans tend to do when they are anxious? Since the age of time, they tend to follow rituals, look for the providential savior and do human sacrifices. Today this has become setting procedures, look for a new providential leader and lay people-off. When organizations and people are anxious, they forget the core of their strategy (the customer), revert to procedures and comply to orders. This is called “Assumed Usefulness”.

So what can we do?

Whether we wish to maintain our No1 status (being in Heaven) or go back to it (as we fell in the Purgatory of Illusion), what can we do as leaders? There are three things we see “sustainable leaders” (the “good to Great” of Collins) and turnaround leaders do:

  • They don’t go back to…, they move forward:  We have entered a strong and violent “Disruption Era”, comparable to none before. Technological progress revolutionizes our ways of working. “Going back” to something we were before will increasingly sound like a useless defense mechanism. Moving forward and integrating technological revolutions in our ways of thinking and working will be a better choice. No organization will revert back to what it was. Co-creating clarity about where our World, our organization and our people go will be critical for sustainable and turn around leaders.
  • They will “act their way into a new way of thinking”: “Trust will be the new currency” and leaders, in order to be credible and inspire their people, will need to act and behave in ways that are coherent with their desire to become a simpler, customer obsessed organization. Those leaders will need to have the courage to spectacularly deconstruct what they allowed their organization to construct.
  • They will “Speak to their followers’ hearts so that their minds and souls will follow”: Theodore Roosevelt referred to another part of our masculine anatomy (using the verb get) but this would get us back to compliance. Disruptive leaders understand that what will move people away from Loss Aversion, fear, procedures and other “assumed usefulness” will not be more fear and more constraints but emotions and passion, profound sense of Purpose.

Too often, inspired leaders seeing that the “edge” of their organization needs sharpening, believe that a new strategy, a reorg’ or a motivational boost will be sufficient to get them back to Heaven. We advise and accompany leaders on their own and their organization’s Transformational Journey. Getting back to the top starts with our own behavioural change as leaders.

  • And what if it were “the player’s choice”? by Adrien Plavsic

    Friday April 21st, 2017 0 comments

    Adrien Plavsic is a “monument” in ice hockey. Silver medallist of the Albertville 1992 Olympics with Canada, ex NHL (top US/Canadian league) player, he is now an atypical hockey coach in Switzerland. Here is an original idea of his: What if players could choose their coach? Translate it in: “What if employees could nominate their leaders?” Thank you Adrien for…

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  • The emergence of the Disruptive Leader

    Saturday April 1st, 2017 2 comments

    Eight years ago, when I was referring to the “Disruption Economy”, most of the audience hadn’t heard about it, some were sceptical and the rest was listening with polite interest. In September 2016, when speaking in São-Paulo to an audience of 500 CEO’s, I asked if anyone needed an explanation about the Disruption Economy and who was sceptical about it…

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  • Why I focus my attention on the bench…

    Thursday March 16th, 2017 4 comments

    Back in 1998, French football coach, Aimé Jacquet, explained that the worse moment of his career consisted in explaining to Eric Cantona who had just been nominated player of the year in England (I hope you seize the historical meaning here: English people elected a French as its most valuable player of the year!) and who had always loyally supported…

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  • “Rethinking Infidelity”: test you inclusion skills, as a leader!

    Friday March 10th, 2017 0 comments

    I am still puzzled as to why TED proposed me to watch the following intervention of a Belgian born, New-York based psychotherapist, Esther Perel… The title of her intervention sounded provocative: “Rethinking infidelity!” I had a few minutes to spare and chose to watch. My doubts and rather neutral attitude gradually faded. I liked the tone of her voice, the…

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  • A tale of two CEO’s and their unusual relationship to elevators

    Friday February 24th, 2017 4 comments

    The title of this new post may have you thinking of this clip which has been around for a while, but it is totally UNRELATED! But just for the fun… Now, more seriously, the tale relates to two organizations and how their leaders used the elevator in a totally different manner. One could almost say that the relationship of the…

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  • Three lessons in team dynamics that business could teach sports

    Friday February 17th, 2017 8 comments

    Since the end of 2016, I have had the chance to be invited to support teams or players both in Ice-Hockey and Football. Three months into this part-time activity, I realize that there are at least three things successful Business Leaders can bring to Sport Coaches. It should be of interest to those who seek to create a culture that…

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  • Leaders take a stand!

    Thursday February 9th, 2017 2 comments

    Difficult moment for businesses in the US… Whereas, traditionally they would publicly try to stay away from taking a stand on political issues, some politicians seem determined to draw them in. It almost seems that Disruption will not solely apply to technology and strategy but also to social and political. And, consequently, in one of the biggest US sports events…

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  • When democracy depends on our leadership attitude!

    Saturday January 28th, 2017 0 comments

     “Tyranny is the only alternative to strong, performing autonomous institutions. Tyranny substitutes one absolute boss for the pluralism of competing institutions. It substitutes terror for responsibility. It does indeed do away with the institutions, but only by submerging all of them in the one all-embracing bureaucracy of the apparat. It does produce goods and services, though only fitfully, wastefully, at…

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  • Context Leaders change the rules of the game

    Friday January 20th, 2017 6 comments

    January 1st, whilst everyone home was recovering from their festive night, I came across an interesting clip from Ernesto Sirolli, a strong believer that NGO’s get it wrong because they seek to lead from the front and behave as “Content Leaders” towards those they wish to help. He describes his organization as people who “harness the passion, determination, intelligence, and…

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  • Let us be the true Heroes of 2017!

    Saturday December 31st, 2016 1 comment

    2016 leaves 2017 and ourselves confronted to many challenges, from Aggressions, Bombardments, Crisis, Desertification, Exclusion, Fighting, Guerrilla, Hunger, Isolationism, Job destruction, Kidnappings, child Labour, Malnutrition, Nationalism, Oligarchies, Pollution, Questioning under torture, Racism, Sexism, Terrorism, Unemployment, Violence, War, Xenophobia, Yellow fever to Zika I remain convinced that Women and Men of Goodwill will manage to transform 2017 into a positive year.…

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