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Companies rarely collapse all at once. The collapse is often only the visible phase of a decline that started long before and developed insidiously. Like the famous frog that does not react when the temperature of the water in which it is placed rises, this slowness makes it more difficult to react: the signs of decline seem disparate and it is difficult to link them together to build a picture of danger. At the heart of this difficulty is the silence about the situation within the organization, and the tacit acceptance of mediocrity.
One of the important factors of organization decline is the type of managers it recruits and promotes. Among them is what I call the ‘Creosote manager’, the one who kills life all around him to flourish. Creosote people populate just about every organization that I encounter and that have so much trouble innovating. Would there not then be a causal link?
I wrote earlier about the loss of creative ability of the firm. This loss and the growing reliance on a command and control management style are obviously not without impact for an organization. In his political essay “The Power of the Powerless”, Vàclav Havel writes about a simple everyday experience he had in Czechoslovakia in the 1980s. In the window of a local grocery store, he observed a poster of the Communist party that read: “Workers of the world, unite!” Havel asked himself, “Why does the grocery manager do it? What is he trying to communicate to the world?” Obviously, the greengrocer was not a communist militant (in that era there were not so many around).
How do organizations decline? The topic is not new, but it is more pressing than ever. One explanation is that an organization’s decline is due to the loss of creative capacity. It is based on the work of a historian, Arnold Toynbee.
Posted in Theory
Tagged Arnold Toynbee, clayton christensen, creativity, decline of organizations, Henry Mintzberg, How productivity killed American enterprise, Intrapreneurship, Ludo Van Der Heyden, management education, MBA, organizational breakdown, organizational decline, Renewal