The Living Company

 

WHY COMPANIES FAIL

 As a process consultant, fixing internal operational problems in every kind of corporate settings, getting competing interests to learn how to work together rather than against each other, I have learned that most organizational dysfunction is caused by:

  •  The lack of trust among managers who do not take the time to know and understand each other,
  • Ignorance of the facts: assumptions and beliefs unsupported by reality, and
  • Habit energies, behavioral patterns and instincts taken for granted, without reflection or illumination

Innovative thinking, a rich flow of ideas, team pride and cohesion; accountability are destroyed if teams are burdened with these dysfunctions.

Consider the lack of trust. We must discover who our partners are in the project at hand. We need to know who we are in order to trust each other. This is difficult to do if we have prejudged each other negatively, based on fear, brief encounters, faulty perceptions, assumptions, gossip and beliefs.

Every member of the team has a story to tell about his life that can broaden our understanding of ourselves as well as “the other.” We need to hear these stories. More specifically, we need to know how to tell these stories and how to create a safe space for the telling. We need to know how to listen or we risk remaining strangers with fragile easily-broken bonds of trust. Most of us do not know how to listen.

According to Arie de Geus, in his well documented The Living Company, Harvard Business School Press, 1997, “The average life expectancy of a multinational corporation – Fortune 500 or its equivalent is between 40 and 50 years” or about one-half the life span of anyone reading this. Smaller companies rarely make it beyond 10 to 20 years. The last ten years have probably seen a material decrease in average corporate life expectancy. Yet our economic and civic well-being depend on the health of companies large and small. The benefits would be substantial if we could learn how to turn these catastrophic entities into healthy ones.

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