As we discussed in last week’s post, Organizational Agility is the convergence of two very different capacities – How responsive the organization is to trends, disruptions or opportunities in the operating environment, and the relative stability or lack thereof, for the stakeholders in the organization – employees, customers or investors/board members. Too slow to respond or too disruptive for stakeholders both undermine the viability and sap the vitality of the organization.
Over the next four weeks we will examine how this happens, what it looks like and what might be done about it. This week we begin with organizations that struggle with both capacities – we refer to them as “Endangered.”
Organizations in this quadrant find themselves assailed on all sides. A quick assessment reveals problems across the spectrum – morale, performance, stock price, infrastructure – you name it. Many retailers find themselves here.
Retail has never had a sparkling reputation for employee engagement. It is one of the sectors where people work hard to get off the frontline – long hours, repetitive tasks, and little decision-making authority all characterize the entry-level experience. Survivors get to move up the chain but tend to be inculcated with the philosophy that effective management is to inflict the same misery they experienced on others as a rite of passage – and so the cycle continues.
Looking at Sears reveals what this looks like at the enterprise level. Sales are down, growth is negative, and buildings themselves are in need of being “freshened up,” employees are overwhelmed and under-engaged. Many shopping malls are worried that these large “anchors” that were once cornerstones of their attraction now will become anchors of a different sort – actually dragging them down into obsolescence of malls altogether.
The current management apparently sees it as a math problem. Selling off some properties, closing others, reducing expenses have netted the following – iconic brands that once were the reason you went to Sears (e.g. Craftsman, Diehard) are potential sell-off targets to fund the ongoing ineptitude. Their value proposition – value and service – is being tomahawked by under-staffed, demoralized sales people waiting for the other shoe to drop. The experience of the long term employees must be excruciating. Sears is “endangered” – too slow to respond – way too disruptive for all in the value chain from employee to customer to investor. (Don’t tell me – they paid executive bonuses this year. OMG!)
Endangered organizations, if in fact it isn’t too late, require radical intervention. Someone has to step back and make some really hard calls on what is precious – the essential DNA that has some value and is worth fighting to protect. This is not a “back to basics” march. Rather it is a call to pare back to the heart of the value proposition. In Sears case – if it is a source of consumer goods value delivered with impeccable service – that should be the scalpel that attacks everything. It will be hard work and require an extraordinary partnership with creditors, investors and especially employees. Unfortunately current leadership’s obsession with the “math problem” frame of the problem makes such a move highly unlikely and Sears will go the way some other retailers: Woolworths, Ames, Montgomery Ward, JJ Newberry, Gimbel’s – need we continue?
Join us next week as we look at organizations we call “start-up-like.” These organizations may not be new but their commitment to speed, often at the expense of key stakeholders ought to be of concern.
Until then, continue to collect data about your organization. Make sure you get input all along the value chain.
Good luck.