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I manage CIPFA Finance Advisory Networks and I am a very experienced accountant,manager, facilitator, trainer and presenter with a very wide experience of local authority and not for profit finance, accounting,management and leadership.

Saturday, 9 March 2013

WHEN THINGS FAIL IN AN ORGANISATION - HOW DO WE PUT THEM RIGHT?




How can we spot it early and fix it early?

Many organisations have problems and challenges that need to be resolved but they are often faced with inertia and a lack of will power to tackle things and do what is right to get the organisation back on track never mind about moving and growing it in the right direction. Just getting things back on an even keel would be a start.
 
Things can go wrong in a dramatic sense with a dip in demand due to recessionary pressures which cause profit and cash flow issues, redundancies and closures. Organisations can face huge cost hikes in raw materials and energy resources which do not help the situation. The direction and management of the organisation can be faulty and not tuned into what needs to be done to change direction. These are the dramatic issues which we can all recognise fairly easily -- which need to be addressed in a very focused and direct way within a very short time-frame or else things go under pretty quickly.
 
There are are however other problems within organisations which manifest themselves gradually  over a long period of time. These are not so easy for people within the organisation to recognise because perhaps the pace of change within that organisation is glacially slow. Levels of profit; revenue, employee morale and innovation have remained fairly constantly low over a long time and although the organisation is still commercially successful, it has been overtaken by a large number of its peers. Most people in the organisation do not perceive there are any real issues at all because the organisation has done what it has always done and done it to the standards it has set itself in the past. Any persons within the organisation who try to identify any potential issues with the direction of the organisation are shouted down or more probably ignored -- seen as weirdos or mavericks who are just causing trouble and why isn't everyone happy. It is this gradual manifestation of certain problems and issues over time which I believe is the most dangerous for an organisation. Why? Because it is so difficult to recognise by those within that organisation - they do not see it coming and the accumulation of these unresolved issues leads to a worsening of organisational performance and perhaps ultimate failure. Visible crises are also challenging but at least most people can recognise them as such and there is at least some unity of purpose in trying to resolve them.
 
Theodore Roosevelt was reported to have said, " Do what you can,with what you have,where you are."  Problems arise when people do less than what they are capable of doing or are not capable of doing what they were initially thought capable of doing or they misjudge the timing of doing the correct thing or they take inappropriate action at the wrong time. People who have been promoted to a higher level within the organisation have achieved this usually on the basis of their potential not always on their past achievement,indeed their past achievement may not indicate that they are capable of doing the new job they are thrust into. From the military sphere, there are certain characteristics which are listed by the author Norman Dixon which should be recognised within organisations facing serious problems and challenges:
 
Serious waste of human resources
Fundamental conservatism in clinging to out of date ideas and past glories
Tendency to reject information which they find unpalatable or conflicts with their pre-conceptions of reality
Indecisiveness in making decisions
A tendency to underestimate the enemy and any challenges faced.
Undue readiness to find scapegoats
Failure to exploit a favourable situation
Full frontal assaults at the enemy's strongest point
Lack of reconnaissance
Suppression or distortion of news from the front - to maintain morale and security
 
Do you recognise any of these factors that might compound problems and challenges?
 
What can we do about the above? We need to learn from our mistakes and minimise incompetence by having rigorous training and selection processes. We also need to minimise carelessness and over confidence as well. A large degree of realism is necessary in that the reality of slow decline and lack of problem resolution must also be recognised as well as the headline grabbing crises. In the end an organisation can die a slow death without the key challenges being addressed.
 
The Tom Peters analogy of the frog being put into a bucket of boiling water is particularly pertinent here. The frog being a cold blooded animal doesn't realise it is being boiled to death until its too late. Let's ensure our own organisations do not meet a similar gruesome fate!!!

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