12: Problem - Organizational Politics
(EN: This is one of four chapters that the author means to provide practical advice for a common problem via an extended case study. Her case studies throughout the rest of the book have seemed rather melodramatic and contrived, so I will likely preserve some of the key points while leaving out much of the detail.)
There are three particular symptoms that arise when people are in the animal state of fight/flight/freeze:
- Silos - Isolated departments that withhold information from the rest of the organization and regard other departments as hostile outsiders who need to be kept on a need-to-know basis
- Sabotage - Individuals or departments work in ways to block others from being successful, particularly when this is motivated by fear rather than pursuing their own goals
- System Dysfunction - Inefficiencies that arise when different departments have no idea what others are doing, so there is redundant or conflicting work
These problems plague organizations when leadership is caught off-guard by a change that they did not see coming, or when they have settled into a comfortable routine and wish to defend the status quo. In both instances, the firm is not moving forward but acting defensively. They also have in a common an "every man for himself" perspective in which people or units are digging trenches and raising barricades.
Deer in the Headlights
In spite of their best efforts at predicting the future, companies are often blindsided by sudden and dramatic changes in their environment: a shift in consumer preferences, the sudden emergence of a major competitor, a downturn in the economy, and other external changes puts the firm into immediate panic-mode.
This can also arise due to internal changes: a sudden need for budget cuts or a CEO who shocks a company by stating a bold, new direction that he had kept a secret, will also send waves of panic through the entire firm.
(EN: I've run into a lot of this lately, and figure it to be a tactic to retain control. If you don't involve stakeholders in planning, they have no power to negotiate; and if you spring something on them at the last moment, they must scramble to accommodate rather than defend. It's clearly a bad practice, but standard operating procedure for autocrats.)
The animal-state response is often to freeze - to carry on doing business as usual and pretend that nothing has happened. This is particularly problematic in managers because their departments, or the whole company if it is the CEO, will take their cues from his behavior and deny the issue as well.
Consider America Online (AOL), who built a massive user base for online services, and who crashed terribly when the Internet went public. For a time, they managed to survive as a service provider to the elderly (the author notes their user base was "mostly more than sixty years old") and eventually sold out the dregs of their base.
Consider IBM, which was sucker-punched by Microsoft and lost control over the personal computer business. They eventually transitioned to selling software services rather that equipment, but not without attempting to keep to the way things used to be - as obvious buy the OS2 debacle of the 1990s.
Clinging to Tradition
The firm that attempts to cling to "the way we've always done things" is in deep trouble in an atmosphere of change, when suppliers, partners, and customers abandon the firm but it clings to its traditional ways and hopes that "the good times" will return again someday if it just perseveres what it perceives to be a temporary change.
The problem that keeps many companies, particularly large ones, stuck in the past is that there was a time when their way of doing business worked extremely well for them - so they have faith in traditions and the belief that their present problems are not from failure to evolve, but in evolution itself: what is being done is ineffably different to what was done in the past.
It is particularly problematic when the change in the environment takes place slowly over time rather than all at once and the firm can enjoy partial success by staying to the old ways, as well as serving customers who want to stay stuck in the past. A firm can limp along for decades of diminishing success in this manner, and fears losing the success it has if it changes its ways.
Ending Silos, Sabotage, and System Dysfunction
The author tells a story of a company that was dealing with both changes in the consumer market and competitive behavior in C-suite executives. The result was the creation of "camps" within a company that are at war with one another and became entrenched behind their battlements.
(EN: The story is, as usual, contrived and idiosyncratic, so there's not much to salvage. A few loose notes are below.)
- Consider the amount of time people spend handling internal politics - when it takes more time to deal with red tape than do the work, the culture is clearly toxic
- Good people want to put their skills to work and have little tolerance for a "guarded and hostile" environment. Talented employees driven by a need to achieve will leave the firm. Untalented employees driven by a need for stability will stay, and that's not good at all.
- Conflict at the top must be solved at the top before any change can really take root deeper in the organization. A "grass roots" effort in such an environment is doomed.
- Social engineering is necessary to get people who were previously hostile to one another to work collaboratively, and leaders throughout the organization will likely need to be re-trained to break patterns of behavior that have become entrenched.
- Hasty decisions without due consideration are a clear sign of a company that is being reactive rather than proactive, defending rather than achieving.
- A company mission statement that focuses on internal adherence to tradition is a red flag.