The life cycle of organizations resembles that of humans. Organizations are born, have early toddling years, grow into adolescence and maturity. The diseases that kill organizations are similar to the ones that debilitate human beings.
The first of the three diseases is arthritis.
As organizations grow, bureaucracy is an unavoidable byproduct. Hierarchy increases, layers of processes congeal over what was once a flexible organization, resulting in loss of power and fluidity. Decision-making is diffused, accountability blurred and ownership becomes ambiguous. Despite smart platforms and technological connectedness, the pace is suboptimal. Imagine a tanker sailing through uncharted waters. A lookout spots an iceberg ahead and sounds the alarm. Operational leaders try to assess the threat (and who to blame for it). There is intense debate whether the situation needs to be escalated or handled at the operational level. Eventually the criteria for escalation kicks in and strategic leaders join the fray.
The decision is simple enough: turn the ship right or left? But the consequences have personal and departmental ramifications, so leaders lobby for their preferred direction to protect turfs.
Finally, at the eleventh hour, a decision to “hard turn right” is taken and while the bow of the ship misses the iceberg, the stern hits it and the ship shudders. This shuddering is palpable to all passengers (employees, stakeholders, analysts) and leaders scurry to control damage. Water floods in from the breach, listing the ship to the left, leaving no alternative but to flood the right side holds and bring the ship to even keel. But that increases the drag of the ship, slowing it down.
This slowdown is visible to the analysts and investors so more fuel is burnt to sustain their earlier speed. This describes the biggest risk of most large organizations. They spend more fuel per kilometre of progress than their nimbler competition because of coagulated decision-making and misalignment among strategic leadership of the organization. Increase of bureaucracy decreases the “speed of trust” and velocity of business.
The second disease is coronary hardening.
A decade ago, a junior employee could accost a senior leader in a corridor with an appeal that her HR was unable to solve. Say a request for delay in transfer, because the employee had an aging parent to be attended to. The leader would then issue executive orders to delay the transfer on the spot.
Today the same request arrives through the “proper” channel of HR management, along with comments by several intermediaries warning that acceding to this request would violate the standard operating procedure (SOP) and set a precedence. Leaders are increasingly being gravitated towards adherence to the SOP. But the real job of leaders is to deviate from the SOPs. It is the job of managers to follow it. Leaders must discern that old SOPs cannot cater to new instances. They need the moral courage to stick out their neck and challenge status quo. Organizations may believe that AI platforms, big data decision support systems and connectivity tools are making them smart, but in the process they are also losing heart.
The last disease is Alzheimer’s.
Organizations have forgotten their past glory. They have forgotten the travails and tribulations of the founding years. The audacity, chutzpah and optimism, using which the founders built the organization brick by brick. That cement has to be poured constantly in the form of organizational legends and inspirational stories, not insipid mission statements. Organizational charts don’t capture a company’s spirit; organizational narratives do.
Fortunately like most diseases, these too are caused by a way of life and, therefore, can be altered by making changes to the environment of the organization.
Creating ‘speed of trust’
Corporate workers spend more waking hours with colleagues than their families. Yet they only know each other’s “CV stories”, an embellished, antiseptic version of the real person.
Leaders across all levels need to become friends or at the very least respect each other. Members of elite teams, know and care for each other intimately. The term “band of brothers” implies a covenant that goes beyond material gains. This bond is not created by some regimental motto or company vision statement. It is cultivated by rigorous frameworks of training, which inculcate those personal bonds and an ethos of a high-performance team.
While some evolved organizations are adopting purpose-driven motivation, most rely on incentives and fear.
A psychologically safe environment begins with vulnerable leadership. Leaders who say “I don’t know” more often than “I know it all” unlock the full potential and participation of their teams. Those who serve their teams with a gardener mindset create a vibrant, optimistic and a can-do attitude, while those who rely on authority suppress inventiveness.
There is a misplaced belief that one overarching sense of purpose will unite an entire organization. So, firms craft vision statements that they believe are purposeful for every employee. But an individual’s sense of purpose is not driven by the significance of important tasks. Instead, it is created by finding significance in every task, no matter how mundane.
Creating a shared sense of purpose needs a perpetual story crafting and storytelling culture, not just a PR blitzkrieg. Only a sense of purpose can triumph over fear, disengagement and self-interest, not profits alone.
The author is founding CEO of NATGRID. Views are personal.
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