The self-defeating organizations
Smart companies outsmarting themselves
By M. Afzal
Sep 11 - 17, 2000
Like individuals business organizations also face
crises and challenges even after gaining maturity. How they respond in
such situations depends upon their Core Beliefs. If core beliefs are
positive then the organization responds in a positive way and if these
are negative, fear of perpetuating low performance sets in. Again if
this fear is healthy then the organization may find a cure but if this
fear is mythical, it will set the organization reeling down the road
to low performance.
The core belief system has to be developed by the
top management. It is the lens through which the organization sees
itself. The core beliefs generate "Descriptive Beliefs",
i.e., nature of business, goals, market etc. and "Evaluative
Belief", i.e., wisdom, fairness, honesty and quality etc. Sound
Core beliefs will result into valid descriptive and evaluative
beliefs, while unhealthy core beliefs will give way to negative
descriptive and evaluative beliefs. Low performance, comes through
(i) Reaction (ii) Replication (iii) Absorbing Costs (iv) Minimizing
(v) Blaming or Scapegoating. Positive Core beliefs result into high
performance, because of (i) Truth telling (ii) Open mindedness (iii)
Sharing benefits (iv) Maximizing and (v) owning success.
The business world is full of examples of self-defeating
organizations. Interestingly, these are not inactive organizations,
but smart enough to outsmart themselves in certain ways.
Here the story of George (fictitious name) is
relevant. He was sent to 'fix' an Investment Company that was showing
losses. He was a typical character and manager. He started weekly
meetings, showed tough attitude, and insulted executives in the
meetings. These weekly meetings ultimately became the main concern and
when he left, the company was in greater mess. Some key personnel had
left, before him and unhappy clients had gone to competitors.
The symptoms of self-defeating organizations are:-
Territorialism (re-organization re-staffing,
transfers) from one territory to another.
The self-defeating companies can be classified as under:-
i) "Maintenance Crew" Controls,
Procedure, guidelines, manuals, Flags (PUC/DFA etc;) are more
important than business results
ii) "The Funhouse gang" Activity
is more important than productivity. Too busy — little result.
Meetings, Conferences, Discussions consume much time.
iii) The Pepsquad Slogans, Banners, Posters
to show optimism take precedence over real action. Positive talk is
not followed by action.
iv) "The Alumni Club" Remembering
the past glory, previous leaders, good old days and foregeting
v) "The Cargo Cult" Changes, floor
shifting, developing future scenarios, ignoring today's
These characteristic give rise to different
behaviours, resulting in self-defeat.
Taking a realistic look at the organization's core beliefs, and
characteristics is very important. There are different types of
counseling approaches needed for different characteristics.
A. The Maintenance Crew
Being dependent upon systems and procedures it is in fact an
internally depressed organization. It needs motivation and cheering up
in a realistic way with measurable targets.
B. The funhouse gang
They need an efficiency expert to highlight the need for
efficiency, against activity. However, activity cannot be ignored. It
should be purposeful, well planned as well directed. "Individual
Shows" should be avoided and collective achievement should be
squad, Alumni Club and Cargo Cult
also need counseling depending upon their needs. Analyzing and
describing how the resources are being utilised in the routine
of daily activity is essential. Attention should be shifted to
the present moment rather than, past or future scenarios.
4. The real solution:
The real solution is identifying, the core beliefs, fears,
characteristic and remedies by the top level of management. Internal
Counselors can be helpful but external counseling should not be
ignored. The danger of falling into the trap of well bound, colourful,
attractive and overly well worded philosophical approaches usually
adopted by external experts must be avoided. Maintenance of balance,
fairness, good values, policies and systems based on merit followed by
critical evaluation of performance will help avoiding self-defeating