Several years ago, I did some consulting with a company that was “treading water” in their industry, barely holding their own after a successful past. The revenues and profits of most of their products were either flat or slightly declining. The key leadership positions were filled with individuals who spent most of their career with the company and were extremely self-confident when they described the state of their businesses. The CEO was of the same mold: smooth, dressed elegantly, very engaging, highly self-confident, and talked/lectured at length on how the industry operated and what had driven their success over the years.
After going over the basic data of historical and current revenue, costs, profits, and market shares, and doing a whole bunch of interviews at all levels of the organization, it was clear that the problem was excess costs, lack of focused efforts to generate wins in the marketplace, and a culture dominated by politeness, confidence and tranquility. In a word, the place was totally complacent. The CEO was the personification of this culture. Nobody dared to stand up and state the obvious: they were bloated, boring and stale!
Complacency is the kiss of death for an organization. Here are the three key characteristics of this disease:
1.) The Absence of a Crisis or Major Change/Improvement Effort – The above company prided itself in being calm, tranquil, and professionally executing the business as they had for years. After doing my work, I pointed out the need for major initiatives in the areas of cost reduction and product innovation. They badly needed to shake the place up and start generating better results and some excitement in the marketplace. Organizations consistently need a clear target for improving things and an organized effort to achieve progress.
2.) A Low-Confrontation Culture – The folks in the above mentioned company didn’t want to shatter their fantasy of success and confidence by having arguments. Avoiding such realities is deadly. People need to be trained to be skeptical and paranoid, and speak up concerning potential or real vulnerabilities/weaknesses/opportunities.
3.) Too Much “Happy Talk” – I remember vividly in the 1990’s at Microsoft when Bill Gates would go into a rage when people spent time talking about positive results. He constantly made it crystal clear that what we need to talk about and urgently deal with were problems and new technologies/trends that could bury us. The above company was the opposite.
The lesson is clear: Beware when you think you have it all figured out and that things are running just fine!