Page 71 - The Resilient Organization

58 Part Two: Step 1. Managing the Consequences of Past Performance

6. The organization has become “permanently failing” with stakehold-
ers keeping the performance at the level they can benefit from (Meyer
& Zucker, 1989).
7. The core group gains legitimacy and therefore will be hard to unseat
on performance grounds alone.

So, to beat mediocrity, the core group has to be unseated. Otherwise, it
has no incentive to stop milking the organizational cow. To do that, you
will not only have to challenge its performance but demerit its legitimacy.
This amounts to a coup d’état, a political revolution. Good luck! You’ll
need it! (For examples of how to go about such a revolution, see Chapter
10, “Case Study: Imaginative Thinking in Action—The Case of the
ODDsters,” and Chapter 13, “Postcard No. 3 from San Jose, California:
Tempered Radicalism and Management Practices That Stick.”)

VERY LOW PERFORMANCE INVITES CALAMITY

While it is possible to perpetuate mediocrity, very low performance has its
destabilizing characteristics.
Very low performance results in the diverging of the core group’s interests,
as the organization can no longer sustain all of its elite. In the event of a major
adversity that threatens the organization, the organization falls back on its
old routines, which may be inappropriate (or even what got the company in
present trouble in the first place). It is easy to fall into a failure trap (Levinthal
& March, 1993) because even if a particular strategy might eventually work,
there is either no patience for it, or time simply runs out before giving the
strategy a chance to show its might. There is no time for experimental learn-
ing or for developing a portfolio of strategic options. Usually huge risks need
to be taken so that the organization has at least a chance of survival (which
requires radical, yet untested and unrehearsed change). Turnaround is
attempted, at huge human and financial costs. A corporate turnaround spe-
cialist is called in. Attention tends to become focused inward, thus further iso-
lating the organization from changes in its competitive environment.
The company may have to purchase its momentary survival at the
expense of future viability.