Traps in diagnosing organization failure

摘要

When your company is in trouble, finding and understanding the sources of problems is not as simple as looking in the mirror. If diagnosing decline were easy, we never would have seen corporate icons staffed by very smart managers like GM, Sears, K-Mart, Montgomery-Ward or IBM go through long periods of poor performance in recent decades. In reality, however, understanding the causes of corporate failure can elude even the smartest managers. In this article, I describe why finding the sources of decline in an organization can be so elusive and I outline some actions that managers can take to help themselves in troubled times. What makes diagnosing decline so difficult is that it is a complex human information-processing task. For the sources of decline to be discovered, an organization's top managers must both perceive the sources of decline and develop an understanding of how these sources negatively affect the achievement of the organization's goals. While this process seems simple enough, the nature of how people (i.e. top managers) make sense of complex information in organizations is riddled with pitfalls that throw the process, awry. These pitfalls happen in both the perception and understanding of the sources of decline. I focus most on the pitfalls that I have discovered most frequently in my interviews, surveys and studies of top executives at firms trying to turn around that have been the basis of a number of academic studies of turnarounds that I have published in the last decade.