The Sunday Mail
Memory Nguwi
Organisations, just like individuals, can stagnate and would require renewal.
The key questions are:
What signs should you look for as indicators that your organisation is ready for renewal? Can we rely on people who are internal to give a signal for renewal?
Organisational renewal assumes that an organisation has the internal capacity to trigger learning and innovation as a precursor to proper renewal.
Organisations are now operating in a very fluid and rapidly changing environment. Strategies to remain competitive have to be adjusted in real-time. At the centre of an organisation’s ability to renew itself is the concept of dynamic capability.
A clear understanding of dynamic capability is important: “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments” (David J. Teece, Gary Pisano, and Amy Shuen).
Dynamic capability allows the organisation to respond to the changing environment swiftly.
Here are the serious signs that show that your organisation needs renewal:
- If you are in a competitive environment and see market share showing a downward trend, despite what you would call your best efforts, it is a clear sign that your organisation needs renewal. It is a sign that the current people have probably run out of ideas.
- When employees ignore the leadership in the organisation, it is a clear sign that things are falling apart. By this time, even the employees have likely lost confidence in the ability of the leadership to drive the organisation forward.
- When your organisation consistently receives bad publicity. It is a sign that several key stakeholders have lost both faith and confidence in your ability to serve them well. They will be saying bad things about the organisation all the time.
- When the CEO is the only person with ideas, you must know things are falling apart. Leadership often resorts to a more autocratic leadership style when cornered. The approach alienates employees, who in turn pass on their frustration to customers. That tends to alienate employees.
- When customer complaints are going up over a period. The fact that your customers are not happy with your services, over a prolonged period, is the clearest sign that your organisation is in trouble, which would require external interventions in some instances.
- When your most competent people leave the organisation. When this group starts leaving the organisation in large numbers, you must know something needs to change and it is often a need to renew the organisation’s leadership. In most cases, this group would have tried to raise issues of concern with the leadership, but they get promises that are never fulfilled.
- When your leadership starts asking you to lie to customers to cover up for unfulfilled promises, you must know things are falling apart. When the leadership has run out of ideas, they tend to ask employees to lie to customers. Eventually, customers start realising the empty promises, and they switch to your competitors. In the process, the organisation loses market share and ultimately revenue.
- When people start belonging to factions that are working at cross-purposes to the mission and vision of the organisation, it is a sign that the focus has shifted. If your leadership is consumed by power games at the expense of the organisation’s progress, such an organisation needs renewal driven by the board. Factional fighting consumes people’s energy that could have been used productively to advance the organisation’s cause.
- When you find that your management always brings issues to the board that are meant to advance their self-interest at the organisation’s expense. These include wanting more money without due consideration for how the organisation is performing, and taking every opportunity to milk the organisation of resources. Such things include unnecessary “business trips”, where they will benefit from out-of-town allowances.
- When management tenure on average collectively has exceeded 15 years. Such a collective tenure tends to create complacency. The major problem with such a group is that they no longer challenge each other on the strategy and direction of the organisation. The result is that all executives will tend to agree with the CEO for various reasons, ranging from fear to general complacency. An organisation in this kind of situation will find it hard to compete.
- Currently, when an organisation has failed to digitalise its core operations to a level of about 80 percent, it is time to look for new leadership. Likely, an organisation in this situation is already too late on the market to compete and win against the competition. Such organisations were caught flat-footed by the Covid-19 pandemic to the extent that they struggled to keep the business going in the first days of the lockdown.
- When the leadership blames everyone for their poor performance except themselves, it is time to look for new leadership and renew the organisation. A leadership that blames everyone else except themselves is leadership with no ideas on how to turn around the organisation.
- When there is no distinction in pay between high performers and poor performers, it shows the organisation lacks the leadership to take the organisation forward. Any leader who thinks it is fine to pay people the same salary regardless of their contribution does not deserve to be in that role. It means that such a leader finds it fine to waste money paying people when they have not generated value. If a leader can be that careless with salary dollars, what more with other discretionary expenses.
- When a leader starts to bring in friends and family, disguising this under the strategy of bringing in new talent, you must know the leader is running out of ideas. When the organisation’s performance is on a downward trend, people want to bring in people they have worked with before because they bring fewer challenges to the leader, which is a sign of failure.
- When those who disagree with the leaders are exorcised when they raise genuine concerns, you must know it is time up for the leaders. The board must be alert to such practices, or else the organisation will go under while they watch.
Boards must watch out for some of these signs and initiate organisational renewal. In some instances, it may mean firing the whole leadership team to relieve the organisation of the pain of poor performance.
The courage to take bold decisions can only happen on boards that have good leadership.
***Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm (https://www.thehumancapitalhub.com). Email: [email protected] or visit our website at www.ipcconsultants.com
