Failing at the Future: Why Are Some Organizations Clogged with Organizational Sclerosis?

Let’s talk about organizations that are clearly failures with the future — those who are stuck in a rut, and unable to figure out what to do next.

With a twenty-five-year focus on innovation, I’ve become convinced that many organizations develop cultural sclerosis that holds them back to such a degree that their failure becomes a blinding liability.

Yet failure is a funny thing — it can set you back, but it can also push you forward. You learn from failure – think about the context of the quote above. How do you separate productive failure from unproductive? Inertia, among other things. Go through this list.

1. Inertia is easy: when confronted by change, many people react by …. doing nothing. When things are uncomfortable, the easiest thing to do to deal with that discomfort is to avoid it. Such thinking causes many organizations and the people within them to fall asleep. They keep doing what they’ve been doing before, hoping that will carry them forward into the future. Obviously, that can’t work, for a whole variety of different reasons.
2. It’s easy to avoid tough decisions: organizations are faced with a lot of change, in terms of business models, customer expectations, cost pressures, new competitors, and countless other challenges. To deal with any one of these issues requires tough decisions, but in many cases, it’s easier to put those decisions off into the future rather than having to deal with them.
3. An unwillingness to confront the truth: your product might be out of date; your brand might not be seen as relevant and keeping up to date with fast-paced innovation in your marketplace; your sales force might be wildly out of date in terms of their product knowledge; your competitors might have a more efficient cost structure because they made the heavy IT investments that you did not. I could go on, but the point is this: you might have serious systemic problems, and are simply unable or unwilling to focus on fixing them. Have a reality check, and use that as a catalyst for action.
4. A short-term focus: like many, you don’t think about business trends longer than three months or a year. By doing so, you are missing out on the fascinating transformations occurring in many markets and industries, and don’t see the key drivers for future economic growth, with the result that you aren’t capitalizing on them.
5. A lack of appreciation for the extent of disruption that is underway: your industry and business model won’t be the same in 5 or 10 years. If you fail to appreciate that, every action and strategic decision you make today sets you up for failure tomorrow.
6. A culture that is risk adverse: so far, you’ve survived through cautious, careful manoeuvres. Yet the fast rate of change around you has left you naked with that strategy: going forward now requires trying to do a lot of things you haven’t done before. You’ve got a culture that doesn’t accept such thinking. Change that — now!
7. Paralyzed by the fear of failure: related to your risk aversion is a culture that abhors mistakes. Anyone who errs is shunned; people whisper quietly about what went wrong, and what it might mean. Banish that thinking: you should take your failures, analyze them, and better yet, celebrate them! Put them up on a pedestal. It’s more important that you try things out on a regular basis, since it is clear that what worked for you in the past obviously won’t work for you in the future.
8. Failure to adapt at fast markets : I’m dealing with companies that know that constant innovation with top line revenue — which means product and service innovation — is all about time to market. You must have an innovation pipeline that is constantly inventing and reinventing the next form of revenue. What you sold in the past — you might not sell tomorrow. How are you going to fix that? By getting into the mindset of the high velocity economy!
9. A refusal or unwillingness to adapt to new methodologies and ideas: in the manufacturing sector, it’s all about Manufacturing 2.0 or 3.0 or the next phase … in every industry, there is no shortage of new ideas, methodologies, processes, and fundamental change in terms of how to get things done. Maybe you’ve closed your mind off to new ideas, with the result that you fail to see how your competitors are rapidly shifting their structure, capabilities, time to market, product line, and other fundamentals. Wake up — we’re in the era of the global idea machine, and the result is that there is a tremendous amount of transformative thinking out there about how to do things differently. Tune in, turn on, and rethink!
10. A loss of confidence: the economic downturn of 2008-2009 and ongoing volatility since then has had the effect of causing such widespread damage in various industries that some people and organizations and leaders have lost their faith in the future. They aren’t certain they can compete, adapt and change. Perhaps this is the biggest challenge of all to overcome — but you can only overcome it by getting out of your innovation rut and moving forward.
11. Fear of the unknown in times of uncertainty: far too many companies go into a ‘wait-and-see’ mode when they aren’t sure as to what comes next. Decisions are being deferred at a furious pace. The result is that many organizations are driven by uncertainty. What happens if our market doesn’t recover? What happens if we can’t rebuild the top line? What happens if our customers don’t start spending again? So much fear and uncertainty causes a form of leadership and organization wide paralysis to set in; they’re like deer caught in a headlight, and are frozen in time. Avoid that fate – and fast!

In these organizations, a deadly culture that I call “aggressive indecision” settles in – and they begin to suffer from an organizational sclerosis that clogs up their ability to pursue great ideas.

Bill Gates once observed that “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”

It couldn’t have been put better. What’s your choice – to be an innovation leader, aware of where we are going in the future, or an innovation laggard, still mired in short term thinking?

Think growth!