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Source Manager's Journal: Tired Organizations

I recently received an invitation to a fund-raising event for a non-profit organization. As I read it, I realized that this exact event could have been held in 1987 rather than 2007.
There was the mandatory “celebration” of something or other and the obligatory honorees. Most striking was a list of panel discussions topics that felt like a stroll down memory lane. It seemed as if no one in the organization had engaged in critical or creative thought for decades. It reminded me of the film "Groundhog Day," in which each day is simply a repetition of the previous one.
Finally, the invitation reflected a lack of awareness of the extent to which the organization’s position in its universe had slipped. It just wasn’t a very big deal anymore. In a field in which change is relatively slow, it had essentially stood still. Time and events had passed it by and — if this invitation was any indication — no one in a position of authority even realized that it had happened. It had become a tired organization.
The alternative to being a tired organization is not to be trendy or to grasp at each “flavor of the month.” The alternative is to remain vital. It is mostly about maintaining contact with customers (clients, patients, students, whoever the groups or communities served are), making adjustments to changes in the external environment and being able to execute needed changes. Tired organizations usually don’t do any of these things, and they pay a stiff price for their lassitude.
In business, there is a fairly simple and clean solution to the problem of tired organizations: They fail and go out of business in a cycle that is familiar to everyone. Sometimes whole industries slide into a state of permanent fatigue. The American auto industry — long a hotbed of management arrogance and shortsightedness — seems to have reached this stage. The bottom line is a powerful and unforgiving tool for dealing with tired organizations: It gets rid of them.
Government has a different — generally less effective — remedy: elections. New administrations have an opportunity to rethink policies, put new managers in place and in some ways energize the permanent government. This process is difficult, and elected leaders are often not even interested in it. The same can be true of top-level appointees who consider actually managing the organization to be grubby work that is beneath them.
There are, however, many success stories, such as FEMA during the Clinton administration, an organizational revitalization that the Bush administration wrecking crew quickly remedied. The cost of this reversal was New Orleans and the Gulf Coast. But in the 1990s, under strong leadership, FEMA had gone from being a classic tired organization to a dynamic and effective one.
Non-profit organizations face the greatest challenge in avoiding organizational fatigue. “Funders,” whether public, private or philanthropic, historically have not imposed the discipline that the bottom line does, and these entities don’t benefit from the disruptive and catalytic effects of elections. As a result, their boards and executives tend to stay in place for long periods of time, often too long. They lack an anti-fatigue mechanism. Everyone becomes too comfortable. And there is a tendency to be self-satisfied, especially if the organization’s mission is to serve some vulnerable group: the poor, the children, the sick, the homeless.
These organizations fail to ask — and honestly answer — the critical questions that can help avoid the pitfalls of organizational fatigue: What value do we bring? If we disappeared, what bad things would happen to those that we are committed to serving?
In the non-profit sector, this picture is now changing, and many organizations are not prepared for what is coming. Funders of all kinds are beginning to demand evidence of results. Anecdotes, measures of inputs and being on the side of the angels will no longer suffice. Some of this is, and is going to be, unfair. It is much harder to measure these results than, say, how many cars we sold or the number of people served by a public agency. There is also insufficient investment in “metrics,” so these organizations have a hard time making their case.
It’s important to understand the sources of organizational fatigue and also to look at some of the responses to this hard-to-fix condition. All organizations have life cycles and, in some respects, tiredness is an organizational stage. It is not, however, inevitable. And prevention is a lot easier than finding a cure.
Tired organizations almost always have tired leaders. Founders who stay around too long are especially susceptible to producing a tired organization. Over time, they begin to feel that their job is property rather than a function. They begin to know all the answers and stop listening. Like most of us, they get comfortable with doing the same thing today that they did yesterday. They start preferring to hear flattery and happy answers rather than presentations of problems. They — and the organization — lose any sense of urgency, and the culture starts to reflect this lassitude.
Here is an interesting counter-example: For the past 35 years, the New York Yankees baseball team has had the same owner. He is not a nice man. People who have to deal with him do not like him. He is often abusive, unreasonable and crude. But — a huge but — he has never allowed the organization to become complacent or tired. He has sustained a sense of urgency. It will be very interesting to see if it survives after he is gone.
There are other sources of organizational tiredness. Arrogance and self-congratulation are near the top of the list. The words “elite” and “the best” should always be seen as warning signs. It is hard to be the best at anything. It is even harder to stay the best, often because people begin to believe their own PR and start to coast. After all, if we are the best, why do we have to change? Resistance to change becomes a norm, one that is visible across a broad swath of American organizations in the public, private and non-profit sectors
What can leaders and managers do to prevent their organizations from becoming tired? This is the important question, because once an organization is tired, it is very difficult — but not impossible — to reinvigorate it. Here are several keys:
— Avoid the norm of self-congratulation. This does not mean that people should not be proud of the organization’s achievements. It means that these achievements are now in the past, and the focus must remain on the future.
— Step outside yourself and your organization and try to look back in as an outsider. One of the hardest things to do is to get a clear sense of our own culture. We are too much a part of it. This is an important reason that organizations get tired when everyone stays around too long. Virtually everything becomes “just the way that we do things here.” Stepping outside is a way of looking at other ways of doing things.
— Especially if there are no direct competitors — typically the situation in government and non-profits — create a competitor by identifying the best organization in the field and benchmark key functions, processes and outcomes against them. Benchmarking is an invaluable tool in maintaining a sense of urgency in the absence of direct competition.
Once an organization is tired, it is very difficult to turn things around. The starting point is almost invariably new leadership. But as in the case of war, we know that not enough generals are ever shot. In government, the leader must set a new standard and enforce accountability. In the non-profit sector, the board must raise the alarm, usually by firing the chief executive and finding the right person as a successor. In business, people usually stop coming in the door, and it is up to the leader to figure out what the problem is before it is too late. In all instances, prevention is a lot easier, and the costs a lot
Editor's note: Dr. Frank Schneiger is the president of Human Services Management Institute Inc., a 25-year-old management-consulting firm that focuses on organizational change. Much of his current work is in the area of problems of execution and implementing rapid changes as responses to operational problems.

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