Failure Is Fixable. Denial Is Not.
A failing organisation is not necessarily a bad place to work. A failing organisation in denial is.
I have worked for a few failing organisations. Some knew they were failing and were doing something about it. Others did not.
At a recent conference, senior local authority managers were asked what they would do if they found themselves working for a failing organisation. The answers were predictable. Change the culture. Improve performance. Review the management structure. Draw up an action plan. Empower managers. Invest in management development. Improve employee engagement.
The speaker dismissed most of these suggestions as superficial, unrealistic or naive.
His answer was much simpler.
Leave.
It was deliberately provocative. But there was a serious point behind it. There is little to be gained from trying to turn around an organisation that refuses to accept that it needs turning around.
Failing organisations do not necessarily lack ideas. They often have too many of them. They have strategies, action plans, transformation programmes, new structures and new initiatives. What they lack is the emotional capacity to accept what is going wrong.
This is where we need to look beyond the formal organisation.
The formal organisation has budgets, structures, targets, performance reports and governance arrangements. But there is another organisation inside it. The emotional organisation. It contains pride, fear, hope, loyalty, resentment and organisational memory.
The formal organisation may still be producing reassuring reports while the emotional organisation already knows the truth. You can often tell that an organisation is in trouble long before the official diagnosis catches up. The jokes become darker. Meetings become more guarded. People stop volunteering bad news. Experienced staff become cynical rather than angry.
The problem starts when leaders stop listening. Bad news becomes disloyalty. Criticism becomes negativity. Poor performance becomes someone else's fault. Failed initiatives become evidence that people resisted change.
Leaders explain away poor performance. It was an exceptionally difficult year. The criticism is unfair. The circumstances were unique. The problems were caused by factors outside our control.
Perhaps some of these explanations are true. The danger comes when every explanation protects the existing leadership's view of the organisation.
Emotional denial is what happens when leaders protect their explanation of failure rather than investigate the failure itself. It is a form of organisational self-protection. It protects pride. It protects reputation. It protects careers. Sometimes it protects leaders from admitting that decisions they defended were wrong.
One of the clearest signs of emotional denial is the search for an individual culprit. A failing organisation can convince itself that replacing the Chief Executive, director or senior manager will solve the problem.
Sometimes it is exactly what is needed. But changing the leader can become the organisation's way of avoiding changing itself.
The failure may be systemic. Investment decisions may have been wrong. The management structure may no longer fit the organisation. The senior team may be dysfunctional. Political interference may have distorted operational decisions. Previous reorganisations may have created more problems than they solved.
When an organisation blames one person for a systemic failure, it may be solving its emotional problem rather than its organisational one.
Then there is organisational memory. People remember what happened last time. They remember the failed transformation programme. The abandoned restructure. The promises that were not kept. The leader who said things would be different.
Those memories shape how people respond to the next grand plan.
This is where the Grey Leader faces a particular challenge. The Grey Leader has seen it all before. That is both their strength and their weakness.
They know which initiatives will fail. They know which promises will not survive contact with reality. They know how reorganisations are supposed to look and how they usually end.
But knowing how the story usually ends can make you reluctant to believe that this time the ending could be different.
Experience can make you better at recognising failure. It can also make you better at rationalising it.
“We tried that before” can be a useful warning. It can also become an excuse for doing nothing.
The Grey Leader can therefore become both the person most capable of recognising organisational failure and the person most capable of explaining why nothing can be done about it.
That is the leadership test. Can you recognise failure without becoming resigned to it? Can you use organisational memory without being trapped by it?
There is another test. Does the organisation still believe change is possible?
Denial is not the same as hope.
Denial says, “It will get better.”
Hope says, “It is bad, but we can make it better.”
A failing organisation that accepts reality can be strangely energising. People are more willing to question sacred cows because everyone knows the old way is no longer working.
That is why I would not automatically advise someone to leave a failing organisation. I would ask a different question.
Does the organisation know it is failing?
A failing organisation that accepts reality can recover. It can be an exciting place to work. There is urgency, permission to challenge established thinking and a genuine opportunity to make a difference.
A failing organisation in denial is different. It will keep producing new explanations, new action plans and new leaders while avoiding the one thing it needs most.
The truth.
The most dangerous organisation is not the one that is failing. It is the one where everyone can see the failure except the people with the power to do something about it.
A failing organisation can be turned around. A defensive one is much harder.
The first needs better leadership. The second needs leaders willing to admit that leadership itself may be part of the problem.
Failure is fixable. Denial is not.
blairmcpherson.co.uk
