ALDA & Associates International, Inc. Newsletter
March/April 2013
Is Your Company in a Decline
by David H. Fater
In previous newsletters, we have commented on the top ten reasons businesses fail. These are many times overlooked by most entrepreneurs and business executives. While we focus on early-stage enterprises, of equal importance is that point at which a successful venture all too often achieves the summit and starts to go down the other side leaving in its wake dissatisfied investors, employees and customers. How can this downward momentum be spotted and reversed to prevent the inevitable crash that occurs if left unchecked?
The first step is to be aware of these types of behaviors. Once they are spotted, steps can be taken towards building better habits and preventing disastrous results. (In many respects, some of these behaviors may have been first identified in a book entitled Cancel the Meeting-Keep the Doughnuts first published in 1995).
Communication decreases:
The first seeds of destruction are sown when information stops flowing, Employees and stakeholders avoid conversation and each other by closing their doors. Decisions are often made in secret. Employees and stakeholders mistrust official statements. Gossip is replaced for the full facts.
Criticism and blame increase:
People are publicly admonished. They make excuses for themselves and point their fingers at someone else. Scapegoats are sacrificed. Self-doubt is masked by attack. External forces are blamed, personal responsibility is avoided at all cost.
Respect decreases:
Constant criticism makes people feel surrounded by a bunch of losers. They feel that poor performance is commonplace and deadwood is tolerated. Everyone expects the worst of everyone else and actions soon speak louder than words.
Isolation increases:
People often retreat into their own familiar corners or subgroups and become unduly suspicious of others as well as become unwilling to engage with others. Withdrawing from contact amplifies their isolation which then encourages others to back away as well. The subgroups or silos harden which increases isolation even further.
Focus turns inward:
People become self-absorbed and lose sight of the broader goal which involves customers, constituencies, markets, and the world. What's going on inside the organization becomes more important than any external goal.
Rifts widen and inequities grow:
Internal rivalries escalate into gang warfare. A few star performers become the privileged elite and claim disproportionate attention, resources, and opportunities. Power differentials and social distance between groups and levels make collaboration difficult, if not impossible. People hoard corporate resources for their own use. It becomes human nature when there is less to go around, the temptation to play favorites or get more for one's own group increases substantially.
Aspirations diminish:
People stop believing that forward progress is possible. They are willing to settle for mediocrity. They now want to minimize risk rather than to look for big improvements and superior gains. "Defensive pessimism" sets in. This, in turn, lowers expectations in order to cope with anxiety in risky situations. You might not see this manifested by absenteeism, but rather "presenteeism," where the body is present but the mind is absent.
Initiative decreases:
When employees and stakeholders are discredited and demoralized, they become paralyzed by anxiety. Believing that nothing will ever change, people become passive. They follow routines by habit but not by taking the initiative (even on small things) and certainly not seeking innovation or change. Policies and processes are perceived to be ingrained and inevitable, shutting off new ideas and innovation. Perception becomes reality.
Negativity spreads:
In an emotional chain reaction, pervasive negativity fuels further decline. The culture permits selfishness, greed, mistrust, disrespect, petty turf battles and excuses in place of much needed action. It becomes easy to get discouraged by the doom and gloom of downward spirals. Many examples exist as in declining companies, low performing inner city schools, marriages falling apart, developing countries with wide social divides, and alleged problems with U.S. competitiveness.
However, habits can be created and implemented that fuel success. Here's what leaders, official or emergent, do to shift a culture from the behaviors of decline to the habits of success:
• Keep communication open and information flowing.
- Foster widespread problem-solving dialogue.
- Face facts openly and honestly.
• Emphasize personal responsibility.
- Refuse to listen to attacks on others and ask each person to take responsibility for his or her part of a problem.
• Model respect for talent and achievements at every level.
- Offer frequent public thanks.
- Praise those who meet high standards while helping poor performers improve (or weed them out if they don't).
• Convene conversations across groups.
- Involve diverse cross-cutting teams in problem-solving.
• Stress common purpose.
- Communicate inspiring goals larger than any individual or group.
- Find a grand challenge that will serve to unite people.
• Work on reducing inequities and status differences.
- Require the privileged to mentor and help others.
- Spread extra resources to many groups, and encourage joint projects or shared service.
- Provide opportunities for learning and growth.
• Raise aspirations.
- Use small wins to show the potential for bigger successes.
- Encourage realistic stretch goals and offer people the help to reach them.
• Reward initiative.
- Provide time or small grants to work on new ideas. Make brainstorming a habit.
• Reinforce the positive by saying and demonstrating that change is possible.
- Ignore the voices of negativity or shout positively over them.
Leaders can guide productive, inclusive, and empowering actions that build winners' habits. Even when the signs of decline are all around us, it is still possible to shift the culture.
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For help in assessing your organization and assisting in increased motivation or a turnaround, please contact David H. Fater at dfater@alda-associates.com or Richard M. Cohen at rcohen@alda-associates.com or (877) 845-4657.