Ignoring Reality

It’s a reality of life in many organizations. The powers that be decide to embrace The Next Big Thing and they begin to bring in new managers to implement this new idea.

Then the exodus begins. At first, the powers that be are excited. Obviously, these people are walking out the door because the bold new managers are stirring things up. Their absence will only help things, since they obviously must have been the people holding things up, right? That’s probably true in some instances, but it might be a good idea to keep an eye on the situation and look at the feedback from exit interviews. Or just ignore everything and assume that this is the fire needed to clear away the unnecessary underbrush.

Or you could find yourself like Enron. When many people looked at the aftermath of Enron’s colossal collapse, it became clear early on that the company’s efforts to modernize itself and increase its stock price had placed it into an insurmountable death spiral. The company’s core business had been transporting natural gas around from point to point. When a brash young executive arrived on the scene and revolutionized the relatively mundane business of selling natural gas, the company took notice and quickly elevated him to company stardom. Jeffrey Skilling was the future of the company and the board wanted everyone to take notice.

At first, things seemed to be going well. While many longtime staff members ran for the exits, they were portrayed as “not getting it” and the company was deemed to be better off without them. Skilling quickly surrounded himself with others who thought the same way he did and they mocked and ridiculed not just the old guard at Enron, but their competitors, customers and industry.

Thus Enron began taking its eye off of the fundamentals, concentrating on the next shiny thing that would impress Wall Street. The people who actually produced the products and services for sale were marginalized and treated poorly. The brash, rude and obnoxious new blood soon chased off the people whose institutional memory and skills were vitally important in running an energy company. When the flashier things didn’t pay off, the company was forced to begin using accounting gimmicks to prop things up. Eventually the gimmicks became criminal acts and the company collapsed because the very people who could save it had been chased out years earlier.

Now the point of all this isn’t to say that companies should resist change; change is an inevitable part of the workplace these days. Yet change should be carefully managed and overseen. Rather than ignore the feedback when employees voluntarily depart after a change, it should be collected by a neutral party in the organization and analyzed to make sure that the organization isn’t setting itself up for defeat by putting in an abrasive leader who will just chase away staff and enforce his or her will regardless of whether it is workable or not. A good leader gets the lay of the land before making any changes. A disastrous leader barrels through his or her new department eliminating things just because they’re “old” or not in fashion. Just like the fashion world, businesses can become enraptured with trends and fads. How it deals with them can dictate whether the company is successful or a failure.

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