1) Good companies can go bad when they experience sustained success which leads to an insular culture focused on maintaining the status quo rather than innovation.
2) As companies grow larger and more complex, they lose touch with customers and change happens more slowly due to heavy structures and silos between departments.
3) Management may focus on compliance rather than enabling change and innovation, leading to stagnant products and services over time.
1. Why Good Companies go
Bad
An elusive cultural change that when it is acknowledged it is almost too late. Many
companies suffer completely or partially from some organizational culture issues as
in this PPP, some do not even become successful they way they could.
How many of you experienced this? Drop a note
2. Why good companies go bad.
• There is a culture that develops when there is sustained success
• Companies grow larger and heavier
• The structures grow and so their silos
• Lose touch with change, its speed and customers
• Those who enabled the initial success are too remote to feel react to
changes
• and often management has been put in place to ensure compliance
• No innovation takes place, no need.
• The organization is oblivious of their own culture a culture of success
3. Sustained success
Success
syndrome
Institutionalized
Behaviours
Internal focus
complacency
Complexity
because of
growth
Learning
disabled
Outcomes
less:
-customer focus
-speed
-innovation
increased cost Decline in
performance
Denial and
Rationalization
Do more of
the same
The trap of success
Adapted from Nadler and Shaw 1995
Culture
no views
outside
trends,
customers or
opposition
we are doing
ok, in spite of
complex
processes and
structures,
managers
territories
Middle
management
Enforce
current
systems
Degrading or
stagnant
products and
services
4. Why good companies go bad.
• In my life I have worked for only 3 companies in this situation, they
experienced “the boiled frog syndrome”.
• Hanging to what worked before.
• Rationalizing poor performance was due to the market
• Perfunctory approaches to Change or Continuous Improvement
resulting in failed or unsatisfactorily completed initiatives and
projects.
• It was indeed time for change, 1 company succeeded.
• Questions needed to be asked
• We needed to break the vicious circle!!
5. Sustained success
Success
syndrome
Institutionalized
Behaviours
Internal focus
complacency
Complexity
because of
growth
Learning
disabled
Outcomes
less:
-customer
focus
-speed
-innovation
increased
cost decline in
performa
nce
denial
Rationalisa
tion
Do more
of the
same
The trap of success
Adapted from Nadler and
Shaw 1995
Culture
no views
outside
trends,
customers or
opposition
we are doing
ok, in spite
of
complex
processes
and
structures,
managers
territories
Middle man.
Enforce
current
systems
Degrading
products
and services
Monitor :
Process
Customer
Finance
people
Often change is
overlooked if
innovative
no alternatives,
we have been
doing this and
worked
What Alternatives:
•Going into new situations
•When the path is blocked
•When blocked by openness
Caution:
•Narrow experience
•Focus and attention
on experience
Explore other
ways, compare
and benchmark
with others
Target
Stds
Variance
Action
Need for change?!
What’s the choice
and why?
6. The FIX (Change) a new strategy
• We started measuring what mattered, customer satisfaction, wastes
and the basic 6 KPAs, regularly.
• ALL LEVELS were involved in streamlining processes, find quick wins in
their respective areas
• Everyone was coached in CI methods and practices
• We turned up the volume of VoC and VoB
• Managers were running with PIP
• Bench marks were set
• Exploration of new ways was taking place
7. To Sustain
success
Success
enablers
adoptive
Behaviours
outward focus
Urgency
Simplicity,
streamlining
of processes
Learning
enabled
Outcomes
More:
-customer
focus
-speed
-innovation
decreased
cost
Improveme
nt in
performanc
e
Acceptance
Learning
from
mistakes
Do more
of the
same
Achieving Sustainable
Success a path of
Continuous Improvement
Culture
Proficient
with outside
trends,
customers or
opposition
Let’s
anticipate the
future
Simplified
processes and
structures
Middle man.
fosters,
innovation
and learning
Increasingly
improved
offering
Monitor :
Process
Customer
Finance
People
innovation is
sought and
change accepted
as a result
Large number of
alternatives are
available in the
portfolio
Keep seeking alternatives:
•Going into new situations
Explore other
ways,
compare and
benchmark
with others
Target
Stds
Variance
Action
Need for
change?!
What’s the
choice and
why?