part two

Avoiding failure

Sometimes I think my most important job as a CEO is to listen for bad news. If you don’t act on it … that’s the beginning of the end.

BILL GATES

Failure doesn’t come like a bolt from the blue. In Chapter 2, I explained the slow and corrosive divergence between performance and perception of performance. Once you’ve seen this happening a few times, you realise that there are repeated symptoms, signals, patterns and behaviours. And they are actually quite easy to detect. The more warning signs you notice, the more you should worry, and the more immediate the need to act.

On the other hand, when you are in the middle of a problem, it is very hard to stand back and take an objective, disinterested view. You are the subject. In addition, fear and self-justification can drive interpretation in a favourable direction.

While you can’t make people see who don’t want to see, or who have put a protective screen around them, there are things that anyone can look out for and test. These won’t be conclusive, but they may give grounds for serious thought about where the organisation or organisations working together stand.

And what about people outside? They are often concerned that they won’t be able to see what’s really going on – the smokescreen will be much too thick for them. Actually, there usually isn’t a cover up. It’s a fog in which everyone is lost. Even where there is a smokescreen, it will be incomplete, so the signs will be visible. This will trigger an alarm and the alarm will keep ringing.

So if you are there on the ground or looking in from the outside, how will you see what is going on, and what should you look out for to indicate that things are not OK? Look for six (often overlapping) signs. If you act on what they tell you about the culture of the organisation and the behaviours of its staff, you may be able to help head off impending trouble and move on.

I have divided the six signs into two sets of three. This is a pragmatic, approximate, overlapping division to help provide a framework for identification. But such a classification is always somewhat arbitrary and some of the examples could have been moved elsewhere.

The first three are signals that the business and the people in it are lost, misguided or paralysed. Bad things will happen or are happening to them. I call them passive warning signs. Chapter 4 describes and analyses them. The second three are active signs: signals that the business, the people in it, and their behaviours, are misleading or doing the wrong things. They are making things happen, albeit the wrong things. I call these active signals ‘alarm bells’. Chapter 5 describes and analyses them.

The six signs of failure are:

• ignorance
• certainty
• complacency
• obsession
• manipulation
• evasion

Finally, in Chapter 6, I look at prevailing, dangerous cultures which may prompt, encourage or allow an organisation to slide into the alarming behaviours I describe in Chapters 4 and 5. Understanding and seeking to alter these cultures, my aim in Chapter 6, is another big part of avoiding failure.