Organizational exhaustion… and internal exile

I wrote earlier about the loss of creative ability of the firm. This loss and the growing reliance on a command and control management style are obviously not without impact for an organization. In his political essay “The Power of the Powerless”, Vàclav Havel writes about a simple everyday experience he had in Czechoslovakia in the 1980s. In the window of a local grocery store, he observed a poster of the Communist party that read: “Workers of the world, unite!” Havel asked himself,  “Why does the grocery manager do it? What is he trying to communicate to the world?” Obviously, the greengrocer was not a communist militant (in that era there were not so many around).

Havel concluded, “He put them all into the window simply because it has been done that way for years, because everyone does it, and because that is the way it has to be. If he were to refuse, there could be trouble.”

For Havel, the attitude of the greengrocer was symptomatic of how the Czechs and Slovaks reacted to the mindless dictatorship that their country had become.

This attitude of indifference can be found in many large companies. One finds innovation slogans right, left and center; every employee is called an entrepreneur; and suggestion boxes perch on ledges in front of cafeterias. Ambitious strategic plans with original names like TOP 2015 or REACH 2025 are launched with fanfare. But behind this façade, what goes on? Enthusiasm for these great projects fizzles quickly; the staff becomes underwhelmed with yet another reorganization, and they lose interest and become cynical with the ineptitude of management. In situations like this, the creative spring has long dried up and what management is really asking their staff to be is: docile.

One of this author’s friends was a purchaser in a large company and when the announcement came that it was going to be bought out for the third time, he simply gave up doing due diligence in negotiating purchases. When he received an offer from a supplier, he didn’t negotiate, he just signed it immediately. He explained his reasons, “I do not know whose interests I’m supposed to defend, the current shareholders, who are squeezing the lemon before selling, or future shareholders who are soon going to show up at the door.” Little by little, multiple 180-degree turns followed by recurrent restructuring and general reorganizations end up completely discouraging even the most motivated of employees.

Faced with such uncertainty, resisting authority and its absurd procedures based on managerial dogma is futile. The employees have to protect themselves. So like the Czechs and the Slovaks, they just wait out the storm, they retreat to an inner exile, and between management and employees an implicit agreement creeps in. Employees agree to pretend to believe in whatever strategy they are told to follow, and management agrees to be satisfied with their docility. Management, aware that it is no longer credible in the eyes of its employees and not knowing what the next step is, carries on blissfully. By remaining with the status quo, everyone minds their own business, nobody bothers anyone, and the colorful posters of the company’s values can continue to decorate the company’s meeting rooms just like Vàclav Havel’s greengrocer hung the Communist poster in his window.

Unfortunately, such stories usually don’t have a happy ending. The disappearance of creative capacity that arises from this implicit agreement eventually translates into the organization’s decline. Its effects may be long in coming, but when they do, it is too late to react.

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