Catastrophic Organizational Failures; How To Think About Them and What To Do Next

June 8, 2014
Posted by: Keith Stalder
Category: People

I am going to shift gears from my blog theme a bit for this post to offer some thoughts on organizational performance issues highlighted in the news recently. Namely, disasters such as the wait time scandal at the Veterans Affairs, GM’s systematic failures in dealing with defective ignition switches, and Target’s inability to secure the personal data of millions of customers. I suggest that what has spilled into the news are the tips of icebergs that signal deeper and broader dysfunctions, as well. From the deaths of veterans and motorists, to tens of millions of dollars in lost revenue, the effects are clearly catastrophic to the customers and patients of these large organizations. Even the kindest observer would categorize these incidents as monumental organizational failures. And, yet they were totally avoidable.

These catastrophes are the direct result of organizational cultures that, over time, have failed to do the:

Right things
For the right reasons
In the right ways

Each of these organizational cultures failed to instill the proper attitudes, habits, and practices to serve their customers, employees and stockholders. As a result, they were unable to maintain and sustain the institutional health of their respective organizations. The results are being played out at the White House, on the nightly news, and in Board rooms where CEOs are being replaced after millions of dollars in losses are being paid.

The debate over the causes and solutions are wide-ranging, but mostly superficial. These failures are attributed to: poor, uninformed leadership; entrenched bureaucracy; corporate dishonesty; and the lack of dedicated institutional resources for the mission. The suggested solutions are equally superficial with calls to fire the leaders; reform the bureaucracy (without saying how); provide additional resources to the VA; and prosecute the alleged perpetrators. These superficial causes and their proposed remedies have some merit, but lack context and ultimately obscure the deeper root causes of the problems.

The truth is that all of the factors mentioned play a role in some part of the problem. However, true root causes and their interconnections must be identified and understood. This is the only way that action can be taken to resolve the institutional dynamics that drove these fine organizations to produce such devastating results. Identifying root causes and interconnections is not as simple as pointing a finger at overly complicated bureaucracies or inadequate resources. It requires the following:

Understanding the needs and expectations of customers,
Knowing the current operational environment of your employees, strategy, planning, capabilities and capacities of your organization,
Getting, listening and acting on feedback from the employees in the trenches, acceptability, work force morale and cohesion,
Understanding how the organization is “wired”, who works for whom, decision making, resource allocation, internal processes

None of it is terribly complex for those who understand organizations and how they work. It simply takes the time and focus of the leadership on a daily basis. Mr. Mueller did this at the FBI. He spent 40% of his time after 9/11 on these real issues and the FBI is still working on it. But it REALLY matters and it keeps organizations for doing things like the VA, GM, and Target.

I hope that in the aftermath of events like we have seen that someone really takes the time to understand what happened, how to fix it, and what to do. Everyone involved deserves better and it is not complex, but it takes REAL work, REAL leadership, and REAL focus.

Many thanks, Keith Stalder, #13