Note, this was originally published one year ago, with no political references. i've now simply inserted in parantheses observations about the current political campaign, and how my points of view apply across the board, and to this specific political campaign. Here goes. We're all tribal societies. Corporations, special interest groups, political parties. So think in those terms and simplify the issues. Compare your organization to a primitive group trying to survive and thrive; rather than getting caught up in modern management, venture capital, investor, securities analyst, business media gibberish. (So for today, let's insert the Democratic party as our tribal society.)
Imagine your tribe growling over who gets the best hut and bickering over mates (who's the candidate, who's the veep?). The chief frequently speaks to them about potential new threats (rumors about Obama), the necessity to arm against them, to look to the future, and to significantly change their habits and attitudes. Some people act as though theyâre listening; others donât bother. Most soon go back to their daily squabbles.
These negative habits (Clinton scrapping at Obama) have been honed for so many years, the tribe is spending more and more time each day arguing. The scouts have stopped searching for new hunting grounds (the actual presidency), the women have stopped scattering seeds, and no one wants to move to a new location because they might end up in a smaller hut.
Then over the horizon rides a well armed and vicious warrior tribe (the democrats know McCain is lurking); conquest clearly on their minds! Picture the change in expression on the faces and eyes; more importantly contemplate the change in thought processes and mindsets of every member of the first tribe (as they recognize that their internal squabbling is dimming their chances of survival). In a heartbeat, the internal bickers and squabbles, the old habits and attitudes, the daily routines, become irrelevant. There is a new enemy and a new set of priorities (we'll see if that happens once the Democrats make a decision).
Their old daily routine issues must be abandoned, the internal bickering must be buried, and a whole new way of thinking is required. Their behavior patterns need to, and do, change immediately, and despite their history of continuously ignoring their leader, they now know it! Bandura, widely acknowledged as the reigning guru of human behavior theory, in âSocial Learning Theoryâ confirms: âBehavior is, in fact, extensively regulated by its consequencesâ. The consequences of ignoring the attacking tribe, of staying with their daily habits, are obvious, and disastrous!
The Northern Ordnance Company in Minnesota was a perfect example. The company had been producing defense systems for the U.S. Navy since World War II. Every single piece of business in its entire history had been spoon-fed on a cost-plus contract basis from the Department of Defense (DoD). Obviously, when the DoD changed to fixed-price contracting, Northern Ordnance couldnât compete.
Not only was there no recognition of the pending obsolescence doom, the entire organization argued over everything. Infighting was the natural result of a stagnant environment, of a strong union, of always doing things the same way, and of virtually the same management team being in place forever. They dealt with the same problems over and over, the whole time thinking the enemy was the person on the next machine, management or the union. These daily disturbances consumed what little energy the company still had. Traumatic change had to come through the entire organization, and fast. And it did; but more on that later.
Many businesses are in this sort of in trouble, and the issues are not recognized or accepted enough to cause them to adopt new attitudes and behaviors. Either the CEO or the organization is in denial. Often both are efficiently ignoring the signs. Many, many reasons create this situation:
- The principal measuring stick for performance, monthly or quarterly financial reporting, is a trailing indicator. It also exhibits some randomness. A bad quarter at the start of a negative spiral may be âhopefullyâ viewed as an aberration or just short-term misfortune. Two or three reporting periods are usually needed before negative connotations are fully accepted. A full year of sliding may have been underway before anyone decides to take action.
- Management can fool itself by shifting a few shipments from the first day of the next quarter into the current periodâno big dealâto make up for a temporary shortfall. That little subterfuge is typically forgotten until the end of the next quarter when a larger issue looms.
- Most crises tend to develop slowly. So throw a frog in boiling water and it leaps right outâthe entire organization is aware when its only pharmaceutical product fails to get FDA approval. The entire organization is aware when the company files for bankruptcy.
- But put a frog in cold water that heats slowly and the frog cooks before it knows itâs dyingâno one in the organization recognizes the slow erosion of market position and earning power caused by a series of misfortunes; none of the problems are individually catastrophic or publicly affirmed.
- Full awareness of a crisis tends to migrate up the organization slowly. Sales managers sense they are losing ground but communicate upwards only when it is obvious. The CEO begins to accept there is a problem but keeps it from the board until he sees more evidence. The board takes time to deliberate. Investors and owners slowly catch on. Months, quarters and years pass with wide-scale acceptance and a solution way, way overdue.
- Management recognizes the problem but is unwilling to (a) fully discuss the crises with their constituencies, or (b) educate them on the necessities of the difficult mid-course correction, and (c) fully engage the organization. They fear that full disclosure will cost them something: respect, key employees or morale.
- By the time a problem is recognized, it might have impacted systems or operations far beyond its original scope. A single hunter poaching from a tribeâs land can easily stay hidden while the enemy proliferates. Only when an entire army marches through the forest does the problem become manifest. Then the battle begins.
- Business organizations are always geared toward creating and recognizing success rather than to developing early warning systems of potential failure.
The organization must adopt a true crisis mentality. They must clearly understand and accept that the situation is critical, and that radical change throughout the company is necessary to avoid disaster or to create success. Results must also be measured in a way they understand and accept.
By transforming danger into opportunity, the tribe ends up with a better operational plan: stay alert to invasion; live in communal houses to better distribute resources; ensure that every group is doing their job for the long-term success of the whole. Donât let an apparently minor downward slide starve your corporation!
I’d be interested in an updated GoogleAnalytics chart (may be two with about six weeks coverage), just to see if the effect did wear off after a while and also, did others link to your new name with the same link-text (allinurl:…). I hope you will publish a follow up.
Posted by: Chat | August 02, 2007 at 04:21 PM
Tom
Having read the piece on positive crisis (which provides great insight on the topic of how to motivate/drive change within an organization) I have one question, driven in part by my own experience.
A leader can use crisis to his/her advantage to create a climate for change that will allow a company to make the bold strategic decisions required to survive. To your point, once the tribe sees the opposing army coming over the hill they can unite, forget their diferences and move forward together.
However, in many large organisations there is another constituant (outside of internal employees) that needs to be on board before major strategic changes can be implemented; the customer.
While employees may gather together once they see "the warrior tribe coming over the hill" customers may choose not to fight.
In short, how do you include your customers in the positive crisis?
Response: A business's problems, if they're serious, will be known by your customers in one way or another, either a leaky salesperson hoping to gain rapport by letting the customer in on the dark secrets or by competitors. The problems will be known but the customer will hear it through these highly imperfect channels. Frequently a management team hopes that by being silent with their customers they can "get by"; but that doesn't work.
So the right thing to do is (a) let your customers know your problems directly at the highest level, (b) put them in proper perspective and have answers ready for expected questions, but most importantly (c) let them know your plan for whatever recovery is underway, and (d) let them know you'll be back with progress reports.
If you choose to remain silent, you'll silently lose customers who are reacting to an informally delivered and most likely incorrect statement of your problem with no accompanying solution.
Posted by: Chris Emerson | February 17, 2007 at 09:00 AM
Reviewing the selected/critical characteristics of companies (and management teams) gravitating downwards (due to their inability to identify and successfully react to the "crisis" before them) makes me certain that the insights provided by Tom Epley in this blog will be of material value to managers at all levels.
Instead of academic rhetoric, it is clear that tangible, proven managerial actions and insight are what will find their way to the reader of Tom's blog.
Having had the benefit of working for/with Tom Epley in the past, I have seen Tom's insight in "real/successful action" on numerous fronts. And instead of high-level/common sense managerial approaches (which we can all read in the multitude of management "how to" books), Tom's success across a multitude of industry segments brings a wealth of pragmatic, direct and defined actions which all of us can benefit from.
Presently serving as head of a relatively large business unit of an international, publicly traded company, I see on a day-to-day basis many of the "non crisis mentality" characterstics Tom has outlined in his full and summary postings to-date. All too often, the circumstances are as Tom has noted - managers failing to see the crisis before them, or wanting to avoid the "crisis environment" for fear of change or critical review. As noted, and as I have seen in prior dealings with Tom, embracing a culture of "continuous crisis" can and will serve to drive successful/continual change (versus the all too common environment of managerial comfort and mediocrity).
Posted by: Quentin Lilly | February 16, 2007 at 11:16 PM