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5 Signs of a Declining Organization

5 Signs of a Declining Organization

The constant change mode of organizations such as growing, transitioning, restructuring, acquiring or organization declinemerging, make it a very dynamic entity. But in the “busyness” of activity it can be very easy to overlook signs of decline.

If it’s true that leadership is the key to organizational success, then so it may be true that leadership can contribute to decline. Leadership alone is a complex topic. There are many books and resources on leadership. Despite all the leadership theory and conjecture it really boils down to whether or not leaders can identify specific signs of derailment and choose to turn from it.

Signs of Declining Organization

  1. Autocratic leadership: One or two people who have absolute power and do not choose to share authority. They dismiss new thoughts or ideas. They shut down opposing opinions and “shooting the messenger” becomes a norm. The micromanager will provide plenty of excuses as to why they must be this way “I don’t trust so and so” or “its better if I do it myself.”
  2. Ego: Ego replaces doing what’s right for the organization – When most every sentence contains “I”, “me” and there little to no mention of team involvement. Even if a team member strikes gold and accomplishes something great, an ego-driven manager is pained to give any credit or acknowledgment.
  3. Hiring and promotion neglect: Hiring and promotions become more about personality and whom they know and less about qualifications and demonstrated results. All things good or bad come into the organization through the front door of recruitment. If “right people in right jobs” leads to success, then the opposite is true too. Neglect in hiring decisions can contribute to organizational derailment.
  4. Interference: Those who try to accomplish good things get stopped or slowed down by those driven in #1 or #2 above. As a result any organizational progress is stunted. Employees will get frustrated and give up trying to make things better. Especially in an autocratic led environment they will also stop bringing forward issues. Everything eventually becomes a crisis.
  5. Lack of accountability or responsibility: The environment becomes fraught with finger pointing, silos, territorialism, and fiefdom building.

The worse part of this scenario is that top talent can see the train wreck happening and will move to other opportunities outside of the organization. This continues the downward spiral of the declining organization.

How to stop the derailment?

If you are a leader and recognize these signs: get real good at looking in the mirror. It’s painful at first, but resist the defensiveness and rationalization. See your part in the decline. Make swift decisions to change the culture you created or perpetuated.

Change the culture to one of inclusive leadership. Make it safe to speak up and tell the truth. Ensure hiring and promotion decisions are made based on merit. Identify what is going good for the organization and stop interference. Make structure decisions based on objective processes and less about personalities or favorites.

It is possible to stop derailment. It depends on how committed leadership will be. Time will tell.

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Lisa Mull

Latest posts by Lisa Mull (see all)

One Comment


  1. Leadership mentality and culture often set the agenda for an organizartion. Many issues thoughout an organization stem from inadequate leadership, personalities (egos) and a general lack of accountability. It takes s brave leader to tackle these issues head-on. Lisa, I think you have captured things very well. Regards, Nick

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