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Is Failing an Inside or Outside Job? – The Case for Culture

Posted by Douglas A Wick on Mon, Jul 13, 2015

Failure is always an inside job.

Jim Collins classic, How the Mighty Fall illustrates this.  How_the_Mighty_Fall_On_Way_Up_Down_teambehaviorExamine the Leadership Dynamics on the right taken from Collins’ book.  You can see the deterioration of the leadership team in the column for Teams on the Way Down. 

The same evidence is clear in studying any civilization.  The Egyptians, Greeks, Romans, the British Empire crumbled first from the inside, and succumbed to outside forces only after their discipline, morals, and fiscal responsibilities decayed. 

Business is no different.  Kodak is no longer Kodak.  Yet they had digital technology and failed to take advantage of its potential.  Choose any of the following articles to discover how Kodak failed from the inside: 

How Kodak Squandered Every Single Digital Opportunity It Had

The Rise and Fall of the Company that Invented Digital Cameras

Barriers to Change: The Real Reason Behind the Kodak Downfall

Many business leaders struggle with why strategic elements like Core Purpose, Core Values, and Strategic Vision and planning are necessary.  They fail to recognize the critical nature of building and maintaining a culture that is disciplined and focused on why the company is doing what it’s doing.  Without a center of gravity to provide internal strength, erosion is inevitable.

As a business person, do you honestly feel that our country, the United States of America is still destined for greatness?  Do you honestly feel that the morality and the fiber of this once vibrant country is solid and set to last another 200 years?

I don’t mean to denigrate our country.  Arguably the USA is still the strongest, most vibrant country in the world.  Yet when you look at recent events, including and especially our fiscal responsibility, can you feel this country is building a foundation that will last for years to come, or are you afraid of what our children will inherit?

This year in Chicago, a state with one of the toughest gun control laws, more people have been killed than in Iraq and Afghanistan.  54 people were killed alone July 4th weekend. 

Is this decay, this slow degradation, or decomposition of our country due to internal or external influences?

If you agree with me that it is internal, the same concern should alert you to the internal elements of your business.

One of my customers recently lost a key management employee.  With their departure the team that they loosely led is exhibiting a negative attitude.  They are displaying varying degrees of fight, flight, and neglect.   This person led more by example.  Unfortunately, a poor one.   Rather than looking for the best in others, focusing on positives, more often their leadership included negative and destructive comments, tearing at the fabric of the business.  

While protecting the team, their leadership was based more on an -us versus them- mentality.  The team now is in fear that no one will protect them from management/leadership/owners in the company.   What the team didn’t realize is management was prepared to remove this person due to their poor attitude and lax management capabilities.  Despite receiving several employee benefits including pay increases, flex time, relaxed dress codes, recognition, and commission increases, the staff’s attitude continues to reflect the departing managers.

85% of our success in life is determined by our attitude.  Attitude is everything. 1200 top executives were interviewed – 94% said their attitude was the sole or key ingredient in their success.

Our attitude is mirrored back to us by the world.  The world and people we deal with just tend to reflect our own attitude back to us. In The Number One Quality of Leadership: Formula for Human Potential – Brian Tracy I shared a formula for human potential. 

Can this team’s attitude be reversed? 

It’s important to recognize how impactful one negative person can be to your organization.  I found this quote from Charlie Spork, the President of National Semiconductor; in a Fortune article What should you do when you realize you're underpaid?, “It’s bad when good employees quit and leave, but it’s worse when they quit and stay.”

The article reminded me of when I had gotten too close to someone who had a negative attitude at the radio station I worked.  His name was Johnny Walker (on air name).  He’d been a morning DJ and migrated into sales.  My wife at the time and I lived close to he and his wife.  We often walked to their home for dinner spending the evening drinking and talking about work.  Johnny’s attitude reflected a sense of lack.  To Johnny the business and the owner were greedy.  We did the hard work while the owner profited.  He triumphed for increase compensation as well as more recognition for our overlooked and unrewarded efforts.  It wasn’t too long before my attitude sunk to the depths of Johnny’s.

My sales manager, a great mentor, recognized the Johnny’s influence on me.  He shared a quoted that I laminated to preserve it. I recognized how Johnny’s attitude impacted me.  I never wanted someone else to impact my performance again.  Curiously this quote (by writer Elbert Hubbard) is in the Fortune article I mentioned above.   

“If you work for a man, in heaven’s name, work for him. If he pays you wages which supply your bread and butter, speak well of him; stand by him and the institution he represents.  If put to a pinch, an ounce of loyalty is worth a pound of cleverness.  If you must vilify, condemn and eternally disparage – resign your position and when you are outside, damn to your heart’s content. But as long as you are part of the institution, do not condemn it. If you do that, you are loosening the tendrils that are holding you to the institution, and by the first high wind that comes along, you will be uprooted and blown away, and probably will never know the reason why.”

You may have heard the phrase, "People don't care what you know until they know that you care."  This is the root of those internal culture practices.  What is the attitude of your people?  Do you have core values and a core purpose that extols why you do what you do? 

Have you answered Simon Sinek’s question, “Start with WHY?"

If not you’re in danger of your business being destroyed from the inside out. 

How does one of my customers establish and recruit for people who share their values and beliefs?  How can you make sure the people you hire exhibit the behavior you want in your business.  Recruiting with Core Values is my next blog.  

Topics: Jim Collins, Businesss Disciplines, Business Culture, Business Failure, How the Mighty Fall,

Challenges of Scaling Up a Business 







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The Strategic Discipline Blog focuses on midsize business owners with a ravenous appetite to improve his or her leadership skills and business results.

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