When you have a problem, a widely accepted and highly successful first step to recovery is recognizing you have a problem and then publicly admitting it. Organizations are simply a group of people organized for a purpose. Organizations behave like people and have the same characteristics as people. People tend to deny there is a problem even when those around them know full well the wheels are coming off. There is a train wreck ahead. Recently, I have read articles and listened to interviews of Fortune 500 leaders who deny there is a problem with their corporate culture or their corporate soul. It saddens me and I am sure it is sends morale for the people they lead even deeper into a tailspin.
Here’s some current signs of cultural problems. See if you can recognize them……
- When regulators assess fines for fraud and customer abuse – you have a problem
- When you do away with sales goals because leaders feel goals are the problem not the way they are derived or implemented – you have a problem
- When you have been told by the SEC that your accounting practices are overly aggressive and thereby forced to restate prior year earnings – you have a problem
- When regulators tell you to change members of your Board of Directors due to lack of proper oversight – you have a problem
- When government oversight tells a publicly held company it can no longer grow until identified deficiencies are rectified – you have a problem
- When your largest shareholder, who for years said he would never sell any shares, starts selling shares – you have a problem
- When you implement polices and practices of a company you acquired (at a discount) because of failed policies and practices – you have a problem
- When you begin selling off part of your company because of past multiple bad acquisition targets – you have a problem
The problems above are all public and yet we (and their employees) hear the CEOs of some of the largest companies in the world deny there is a cultural problem within their organizations. If it happens with Fortune 500 companies, it happens with small and middle market companies. Many times the end result is either the forced removal of the CEO or the failure of the company. It is then sold at a discount or forced into liquidation.
I often tell people do not say or do things that leave scars. We all have had that happen to us and many of us have said or done things to others that we regret. In organizations, the scars become debilitating actions that damage the corporate soul. Souls/cultures need to be nurtured, emboldened and strengthened and in some cases healed. None of this can take place until leadership recognizes and admits they have a problem (or multiple problems). For that is the first step to recovery.
The next step is to hire professional help to assist in the healing process and to hold people accountable on the journey to recovery…. It is only then that you can emerge from the darkness and see how wonderful operating in the light can be. Until next time, Peace! 🙂