"If an organization is great in spirit, it is because the spirit of its top people is great. If it decays, it does so because the top rots … No one should ever be appointed to a senior position unless top management is willing to have his or her character serve as a model for subordinates." - Peter Drucker
Peter Drucker, throughout his life has influenced several companies to adopt key management principles of decentralisation, knowledge work and organizational culture. There are several examples of companies that have transformed themselves culturally to put them back on growth path. While everyone is conscious of growth, invariably, growth brings a mindset shift – one that wants to repeat successes. In the zeal to repeat success, processes and rules are brought in. As processes and rules are brought in, the company that was zipping like a cheetah slows down to a race horse.
A race horse is still good, has stamina, can gallop when needed, leap and jump over obstacles. Its quite resourceful actually. This is where expansion happens and the company grows into new markets, launches new products, expands its portfolio and growth continues. But a horse is certainly not a cheetah and the management / board is OK with it in a pragmatic way.
New markets and expanded products/services brings in the next phase of mindset changes which usually manifests itself in detailed reviews and oversight. At this point in time, the procedures and rules are tightened and the focus gradually shifts to compliance to the processes and status reporting becomes a major responsibility for managers. This starts the Brown bear phase in the life of the company.
This phase has bouts of hibernation by the company when reviews after reviews are conducted and everyone wakes from their slumber to hit the streets and somehow manage to meet the investor expectations.
As companies get used to the hibernation-hunt cycle, more processes are brought in to standardise operations, head quarters takes an active role in “telling” every business what they should do and in some cases, there is even a “corporate template” to prepare a business plan for the year. By now, employees including senior business leaders are so used to being “told what to do” that the “template culture” becomes all pervasive. This is when the company which was still growing into a large corporation thanks to its “brown bear” phase really begins to hit the speed breaker. Now the company morphs into a blue whale that any change is resisted and if at all, there are pockets of excellence while words like agility, nimble, passion, etc are taken out of the corporate dictionary.
The blue whale phase is characterised by internal politics, coteries being formed, frequent restructuring and a workforce dis-engaged with top leadership. In some cases, companies look like a toxic energy dump and only a wholesome culture change can revive it to the glory days of the past.
If a company graduates from a blue whale to a tortoise, they are probably good candidates to buy at a throw away price provided of course their products and services are still relevant and customers see value in them.
Over the next 3 blogs, we will highlight what companies have done to overcome their challenges and how their fortunes turned bright again. Watch out for this space and thanks for your time!!