|ISSUE 2 - SPRING 2002|
Fire in the Corporate Belly
|Click here to download this article in PDF format.|
Reversing The Corporate Aging Process
THE COMPANY JUST FELT OLD. It was under twenty but it felt old. That was our first impression. It felt cold too. Nothing you could put your finger on. But there was no excitement in the faces of the people we saw.
Ron was the CEO. We talked with him about his challenges. They were frustrations mostly. He spoke of the past. He had founded RIB nineteen years before. And for the first few years there was innovation, growth, exhilaration, and sheer excitement for everyone who worked there. And strong roots penetrating the industry it served.
But the last few years were different: Growth had slowed; there had been few new products and they were really me-too copies of the competitionís; profits were still OK. But the company was no longer the darling of the analysts. The people who had grown with the company were still there. But their fire had gone out. There was no trouble that he could see. But something was not right. He wanted a vibrant company again.
He had tried everything he knew. Management and leadership courses. Team building sessions. Counseling with psychologists. Expensive reengineering that never showed on the bottom line. Strategic planning too. He talked of stepping down. Would a new CEO make a difference? One of his outside board members had raised the subject, very tactfully. But the message was clear. The company had plateaued, maybe had lost its way. Certainly it had lost its drive.
We asked how badly he wanted the company to flourish again. And listened to his manner and his tone more than his words. For not all managing officers who believe they want resurgence, really do. There can be a narcotic comfort in the familiar, especially if there is no immediate financial pain. And renewal brings uncertainty. But he wanted renewal. We could hear it. He would be able to look into the soul of his company and not blink.
A week later his managers and supervisors got a questionnaire. It asked their opinions on all sorts of issues. Some unexpected, some puzzling, some disturbing.
Two weeks after that he called his management team together, off site. And together they faced their answers and the answers of their subordinates. A bright mirror was being held so that they could not look away. And in it they saw their company, they saw their divisions, they saw themselves, as they really were. And, in one way or another, they said: "This is who we are! God help us!" . Then their work began.
Quenching The Spirit
There are many reasons why the fighting spirit of a company can be quenched besides the obvious ones like a protected marketplace, continued reversals, a maturing industry. One way or another, they result in an aging company. And that, more than anything else, dims, extinguishes its competitive fire. And it slows.
But companies, unlike people, can be immortal - or nearly so. Can stop and reverse the aging process. And chronological age of companies can differ from competitive age. And the youth or senescence, vigor or lethargy, of these companies has little connection with years.
This aging manifests itself in a number of ways. Bureaucracy, boredom, introversion, timidity, sloth and stiff formality, are some. But corporate sclerosis is the result. And lack of fire. The Challenge For Management becomes the periodic reversal of aging, the rekindling of the fighting spirit of the company. The turning around, preferably before it is necessary, of the business.
But, to change anything as fundamental as psychological age, as the way a company sees and responds to the world, something fundamental within it must change. Its very spirit must change. Must catch fire. Must renew.
And as surely as a person has a spirit, something that is more than personality, so does a company. And it is this spirit which must catch fire.
What the spirit of a company is does not really matter. What matters is that is can be touched and changed and ignited. Very directly and very easily.
The Spirit Of The Company, its fighting spirit, resides mostly within the senior management of the company and especially in the Relationships between the senior managers. It exists when these managers, as a group, as a team, act as the organization's essential core. And it exists whether they know it or not, whether the team is aware of itself as the core or not and whether anyone admits there is a spirit or not. And this spirit expresses itself in the emotional drive, world view, philosophy, attitude, performance of the managers and the company.
One way to change this spirit is to change the management team, starting with the CEO, and hoping the new team will have the drive and fire that is needed. This is what is usually attempted in a crisis driven turnaround. But, short of a major catastrophe, changing the people is seldom necessary.
But there is another other way to change the spirit of the company: change the Relationships within the team and the team's relationship with the company. Done properly, the company is renewed, the fighting spirit is reignited. And the company catches fire.
Fortunately, changing relationships is easy under the right circumstances. But only if the managing officer leads; it cannot be done by a subordinate. And a crisis is not needed nor is charisma. The only prerequisite is a CEO who is ambitious for his company and will make his people face the truth.