Signs your company is going down the tubes
Organisations have lifecycles just like organisms. Hundreds on new companies are born every week, and unfortunately hundreds others close their doors. I came across a good list in my Organisation Behaviour text that outlines 14 factors that you should watch out for if you’re looking out for your organisation’s decline. Here they are:
- Excess personnel (and excessive job classifications).
- Tolerance of incompetence (failure to dismiss poorly performing employees).
- Cumbersome administrative procedures (excessive red tape and regulations).
- Unusually powerful staff who overwhelm line decisionmakers and deride them as conventional and unsophisticated.
- Form over substance, e.g., the planning system and its rules become more important than the results of planning.
- Few clear goals and criteria for measuring organisational success.
- Reluctance to tolerate conflict or preferring harmony over disagreement in spite of its potential damage to decisionmaking.
- Loss of effective communication and excessive centralisation of decisionmaking.
- Outdated organisational structure.
- Increased scapegoating by leaders (a rise in political behaviour at the top of the management hierarchy).
- Resistance to change.
- Low morale.
- Special interest groups become more vocal (resist changes in technology and methods).
- Decreased innovation (fewer new products are developed and introduced in the market).
If you see too many of these, you know action needs to be taken.