An organisation can be destroyed by its own culture. There’s the slow route to decline, where outmoded assumptions and practices render it increasingly uncompetitive – a dinosaur which just doesn’t ‘get it’. But there’s also a swift route to catastrophe. In these circumstances, institutional collusion in interpreting key facts leads to pervasive managerial delinquency. We’ve seen it in the collapse of Enron and more recently in the fall of Northern Rock. We’ve seen tragic consequences in the Challenger space shuttle disaster, caused more by managerial than engineering failure.
Organisational culture therefore belongs firmly on the risk register for any significant organisation. Directors need to ask not just whether they are being given facts, but whether they are also being given the story. Their legitimate role is to challenge assumptions which lie under the facts. The over-arching question should be “what is the true story of what is happening here, and why is it happening?” In this article, I draw on my experience in executive coaching to unearth the main risks and identify the strategies to address them.
In the privacy of a coaching engagement, leaders often share vignettes of executive dilemmas like the one highlighted on page 82. Anxiety caused by navigating uncertainties at pace and scale sets up unconscious defensive responses. I call these defences a ‘flight into deviance’. We avoid thinking about, talking about and therefore addressing, the results we fear the most. And in complex, fast moving, ‘go-getting’ cultures there are many excuses to avoid reflection or asking the awkward questions. Eventually, executives cross the line from silent discomfort (a regular feature of life at the top) to flight from realities they should confront more openly. And when things beyond your control change as fast as they do these days, you might find it’s best to know whether the common ground, on which you thought you were all standing, has got any earth beneath it.