"Our management is out of tune...They're more interested in power plays and finger pointing than they are about making progress and meeting their customer and employees needs. This can't last forever, it seems like this place is crumbling and they're propping it up rather than the right changes that are needed..."
Does that sound familiar? Maybe it's not your workplace or business, but perhaps it's one you work with, buy from, or have some other important relationship with. As business people, it's really tough to work with an organization that seems pretty dysfunctional, isn't meeting its commitments and keeping up with responsibilities, or just plane old isn't doing it's job for you anymore. What can be worse is if you're paying the organization and switching to something else it REALLY hard or costly for some reason or another. You probably can see situations where the organization is just being propped up and holes patched but overall, the walls are coming down. This post is about recognizing symptoms of this "Closing In" stage of an organizations lifecycle and what might be done about it, from the inside or as a partner for the future on the outside.
The Closing In Stage
There are other, less kind ways to describe this stage. One that comes to mind is a "complete train wreck in progress". And no, despite what many people might think, this isn't EVERY organization out there. This closing in stage is part of a typical organizational lifecycle. What comes next is complete failure/death of the organization unless you make big transitions and beginning anew. This stage can last quite some time and so can the next "death" stage as well and so often does not happen all at once. I want to help readers identify the signs of this stage and propose some ways to transition back into a new stage of reinvention, renewal, or reorganization.
Symptoms of the Closing In Stage
These symptoms have some overlap with the Strategic Planning post I did a few weeks ago. However, some bear repeating in the context of this transition. This list is by no means completely comprehensive but should give you a good picture to work from.
- Organizational leadership can no longer speak to the "big picture" or ecosystem of the business. They don't really have market and customer insight anymore, nor an awareness of the competitive landscape and what your competitive advantages are, and instead focus on maintaining order, structure, perpetuating formal or even informal power lines and reporting, reputation, or even just being stuck in a previous stage of the lifecycle. Maybe they behave as if the company, it's systems, and perceptions are still about maintain prestige as an Institution, or varying flavors of the status quo.
- Policies and Procedures have become so monolithic, internally incoherent and contradictory, and people no longer point to them as any authority on "how things are done". The term "ossified" comes to mind here. The bureaucracy of the business has grown beyond just internal people and organizations and has been implanted so deeply in useless policies that people either hold to them and can't get work done (because they're so contradictory and confusing) or they disregard them completely.
- Endless streams of "initiatives, improvements, and changes" that don't seem to be connected, coherent, or aligned to longer term outcomes and necessities of the business.
- Race to the Bottom tactics - price wars, endless discounts, and the "commoditized" product or service, i.e. competitors are indistinguishable.
- Unexceptional work environment, i.e. your employee turnover is high and there doesn't seem to be a "team" or group that you can really describe about the people that work in your business. There's no sense of "we" or very little at least.
- Management approaches (even from a single manager or owner organization) swing between micro-managing and overly autocratic or loose, hands-off, and "let it work itself out". It's not so much about each end of the spectrum but rather than it oscillates so much.
While none of the above symptoms leads quickly and inevitably to death of an organization, they illustrate that path it's on and the likely destination which will happen sooner or later. The idea with these solutions is that they are BIG transitions that involve a concerted and focused effort, organization wide, to transition away from this path of inevitable failure back onto a path of growth and success.
- Reinvention - this involves addressing your product or service at it's core. Maybe you need to take the resources, capabilities, infrastructure, and systems and graft them onto a new market space. This involves making new market entry a clear focus for the business and, with proper planning, transitioning over to serving this new space and in so doing, transitioning and beginning anew.
- Renewal - perhaps you need to identify the future you need to get to and rather than needing to completely reorient the business to a new market, you need to breakdown and reengineer your policies, procedures, processes, and maybe even the people systems in your business. This is deep work and takes a solid roadmap through the uncomfortable space of remodeling the business but worth it if this is what's needed. This is often where I see "business model" improvements made, i.e. analyzing supplier and supply chain opportunities and moving on the best ones, or perhaps reorienting your distribution methods and channels.
- Reorganization - This route is probably the most common I've seen in the corporate world. In some ways, a reinvention or renewal is what was really needed. However, this route can be successful in that, if done correctly, it will restructure management and reporting lines to focus on the right things. This means changing into a product/service area focus, process focus (often called functional), geographic, or customer oriented focus. This goes for large corporations or small businesses. You can recraft how your people and management see their focus and in so doing require that new processes be implemented, old ones tossed, and new measures of success be used.
This post was about exposing readers to this "Closing In" stage of the organization lifecycle and some major transitions that can take place to "get back on the rails" for continued success. If you need some help identifying the stage of your organization lifecycle you're in and what to expect next, or if you want to make a major transition that's you've been putting off, please Contact Me and I'll help prepare and manage your next big transition cost effectively and with best fit solutions.