Bob's Gutsy Leadership Blog

The Lesson From Neiman Marcus – Beware of Complacency!

The news that Neiman Marcus has hired a restructuring firm to help them prepare for bankruptcy has been expected for the past several years.  While clearly the virus problems have pushed them to finally make the move, it was only a matter of time.   Let’s face it, you could hardly find a more complacent company.  As one industry expert put it recently: “If you go to a Neiman Marcus store today, it looks just like it did years ago.  It’s got no energy at all. Today’s millennial customer does not relate to Neiman Marcus or the brands it carries.  For years, nothing has changed”

The obvious question is why do companies fall into the trap of complacency? Only by recognizing the major causes can a leader understand what needs to be done to avoid this paralyzing behavior.  Here is what the guru’s believe are the five key reasons why complacency occurs:

1.) Pride – Successful organizations or even organizations that are relatively stable, often end up being quite proud of what they have achieved.  Once pride sets in, you simply get too much happy-talk from senior management.  There is no sense of urgency about what the future will bring and what it will take to be successful going forward.  
2.) Fear – In many instances the pride in prior success causes a leader to become so confident that they can’t imagine that negative things are happening around them.  Consequently, it isn’t long before the troops understand that the messenger of bad news typically gets criticized.  The resulting fear leads to low candor in the organization and a minimal-confrontation culture. You simply don’t argue with the boss and you only deliver positive news.  
3.) Excess Staffing – Managers always believe they could perform better if they simply had more people.  For a successful and/or stable organization it is almost never the case that someone will come forward indicating they could make do with less staff.  Hence, you get this built-in tendency to increase staff, causing more and more bureaucracy and further insulating the organization form change. 
4.) Consensus-Driven Bureaucracy – In general, people want to be involved in key decisions.  To keep individuals happy in an overstaffed environment, structures such as staff groups, committees and task-forces often emerge, resulting in consensus decision making.  This leads to watered-down decisions that are simply compromises across large groups of people that have minimal impact.  Also, it leads to significant delays; even simple things seem to take forever.    
5.) Antiquated Organizational Structure – With success and/or steady performance, you end up with organizational structures that focus employees on narrow goals associated with what has brought people success in the past.  Hence, there is no interest in anyone doing anything different from the past.  The thinking is: we simply repeat what has brought us success in the past and we don’t deviate from it.  This is obviously a recipe for long-term failure.

Strong leadership is all about being very aware and keen on these innate tendencies of people.  These traps should be regularly discussed with the organization so that everyone is sensitive to these risks. 

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