(This is the third in a five-part series and a break from my normal format. During times of economic crisis many questions haunt executives, boards, staff members and volunteers alike. How will we weather this storm? How long will it last? How are our members being affected? Will this signal a decline for our organization? How will we know for sure and what can we do about it? In his most recent work, How The Mighty Fall: And Why Some Companies Never Give In, Jim Collins posits five signs of an organization at risk of or beginning the descent into chaos, decline and - at the very worst - destruction. This five-part series will take a look at each of the main stages identified by Jim Collins and relate them to issues you may be facing as association professionals.)
The Third Stage of Decline – Denial of Risk and Peril
According to Jim Collins, the third stage for an organization on the brink is the denial of risk and peril. Stage 1 – hubris born of success and Stage 2 – the undisciplined pursuit of more set the conditions for Stage 3. Large successes are the backdrop against which danger and potential failure unfold which is why corporate boards are so reluctant, even when faced with evidence to the contrary, to admit their plans have gone awry. Although Stage 1 and 2 behaviors can build over time, Stage 3 has a limited shelf-life and if not dealt with the chaos and collapse of Stages 4 and 5 can move with frightening speed. It’s almost as if Stage 1 and 2 might have labored to get your roller coaster car up to the top of the Stage 3 mountain but once the car stops teetering back and forth the slide to come can be terrifyingly fast.
Even if your organizational leadership drank the Kool-aid and invested a tremendous amount of time and money into ventures that appear to be going wrong, there may still be time to fix the situation if they can confront the facts and be honest about the situation. More often than not, association leadership will engage in Stage 3 behavior and spend most of their time justifying their first direction instead of taking the time to examine the underlying causes of the changing situation. Worse yet, is association leadership going into the bunker and continuing to insist they know better in spite of it all or volunteers who begin to set their executive up to take the fall instead.
Framing the Wrong Issues – In his book, Jim Collins talks about the lead-up to the space shuttle Challenger disaster. At the time, it was rumored NASA personnel had launched the Challenger in the face of unassailable data that said the shuttle should not have been launched. In fact, the lead-up was highly contentious with a deluge of conflicting data and opinion regarding the performance of some of the engine components. (Get the book to read the entire story, it’s fascinating.) My point here is this - in the end, during all the arguments somehow the question changed from “Can you prove it’s SAFE to launch?” to “Can you prove it’s UNSAFE to launch?” Those are two very different questions and come from divergent risk management points of view. When discussing the future of your association, it is wise to make sure issues are framed correctly and all parties are conducting honest assessments of the potential risks involved.
Selective Gathering and Interpretation of Data – A corollary to framing the wrong issues is the tendency for association leaders in crisis to be selective about the data they gather and how they interpret, accept or dismiss the conclusions therein. Skilled pollsters know the difference between getting actual numbers and getting numbers that support a particular position - it all depends on which question you ask which population. Associations conducting research are subject to the same perils. Leaders can invest a significant amount of energy in finding data to support their own conclusions. Association leadership in crisis and already suffering from hubris and expansion hangovers may spend their time looking for data to support what they already think they know – not data that will effectively knock them upside the head.
Thinking Positively – Some would argue our culture has become obsessed with thinking positively to our detriment. At times this “believe in your dreams and you can be anything,” cultural narrative infects our business environment to the point where we believe our programs will work, in the face of evidence to the contrary, if we just have enough faith. Should we always focus on the negative? Well, no. A person has to have some belief they are making a positive difference in order to get out of bed in the morning. However, positive cultures that have gone over the edge are the ones who chide, ostracize or actively punish those who bring a negative perspective to the table.
Intellectually Dishonest Debate – It is one thing to have an active debate and a vote where one side wins and the other loses. Legitimate debates have evidence, analysis and a cogent case to be made for or against a position. An intellectually rigorous debate produces clear choices that can be voted upon in democratic fashion and supported by both winners and losers alike. In fact, boards have a fiduciary duty to run that way. All board members and staff should support the actions of the board – even those they disagree with. However, it’s quite another thing to have one side win the debate by yelling the loudest, ignoring evidence, pushing their fingers in their ears, singing, “La la la la la la,” outvoting the other group and then claiming everyone should just fall in line. In that case, the winners didn’t legitimately win and there is little to no reason to hope the opposition can move forward in support of actions they have no confidence in.
Playing the Blame Game – Associations in Stage 3 spend much of their time seeking scapegoats and playing the blame game. One way to deny risk and peril, while still appearing to be responsible actors, is to refuse to admit having played any part in it. Stern talk about “investigations” and “fact finding commissions” boils down to – "We blew it, we just don’t want to admit it." An association board is ultimately responsible for everything that happens in the organization. Even if a board had an executive, staff, committee or other body run roughshod over them that board remains ultimately responsible for flying into the side of the mountain because they weren’t paying attention. The only hope any association has is for leaders to quit playing the blame game and start fixing the problem.
Stage 3 is not the most contentious stage, but it is the most critical. At this point, there is still time to back away from the ledge, but not without competent leadership and a committed volunteer and staff base to work with. Your job as an association volunteer leader or staff leaders is to face the brutal facts. Teetering on the edge is not the place to engage in posturing, ostrich-like behavior and simply relying on the power of positive thinking.
Denying risk and peril is the fastest way to experience both. Confronting risk and peril, staying clear about your mission and vision and having the strength to make necessary adjustments before it is too late can often bring an association back from the edge. It takes courage and an unwavering sense of discipline to keep moving the pieces on the chess board. The game is not lost in Stage 3 but the stakes are high. You still have the opportunity, although it is fading fast, to set the stage for recovery or further decline.
Join us next time as we evaluate the fourth stage in decline – grasping for salvation.