Why companies choose to ignore the problems that (eventually) kill them.
Originally published in “The Startup”
If you want to be an effective consultant or freelancer, you have to help your client deal with the big problems. You have to hunt these problems down, even as your client or employer actively tries to hide them from you. Weird, right?
I’m talking about those big, ugly problems that have become intractable, the ones that make everyone feel miserable. Those are the ones that people avoid talking about. Instinctively. The organization has learned to avoid mentioning them. These problems become “the thing that shall not be named”.
How an “Invisible Problem” Develops
I’ve seen this pattern develop in start-ups and in big, multinational companies. It usually goes in steps:
- An issue arises that is serious enough to cause damage to the business (or at least slow growth, which is the same thing) but it’s not lethal — the business will survive for a while without addressing it.
- In the meantime, this issue is also big enough, difficult enough to solve where fixing it is just too costly. It’s an important issue, but it’s too expensive to fix it immediately. So, the organization leaves it alone for now, just for a few days.
- Days turn into weeks. A network of scaffolding and workarounds starts growing around the problem.
- The big problem becomes a rite of passage, it gets ingrained in the identity of the workers. Every new employee that comes in sees a big, gaping hole, and a couple of orange cones around it, maybe with some crime-scene tape strung up between them. “Don’t step” a little hand-made sign says, gingerly scotch-taped to the crime-scene tape. Maybe. Or maybe the new hire gets closely acquainted with the hole by falling in. There, at the bottom, looking up, you see the rest of the organization just go about their business. Maybe someone gives you a hand up. “Oh yeah, that thing, it’s broken, it’s a big hole”.
- The network of workarounds and hacks and fixes is an expression of coping. The organization is learning to live with a big problem. Weeks turn into years. What started out as something that’s “Important enough to take our time fixing it properly” has become an everyday problem everyone just kind-of ignores. Institutional memory piles up, and with every new hire, with every new generation, the big hole in the ground looks less like a problem, and more like a feature — it’s always been there, “it’s just how we work”.
Hell’s Kitchen — A real-world example of an “invisible” problem
My friend “Bob” used to work in a start-up in China that had a very obvious, papered-over “invisible problem”. The company was a grocery delivery company for Shanghai and the surrounding area. It was growing rapidly, for many Chinese and foreign families they became the go-to grocery service. They were expanding into new cities. On the outside, the future looked bright.
The invisible problem was the founder and CEO. Or rather, the problem was that he was a huge dick. He berated the staff, cursing, and yelling daily. He tended to be rougher with the delivery workers, but no one was really safe from the occasional dressing-down that reverberated through the halls. He was an “entrepreneur oriented at scale” so he pressured the company to “ignore” food safety and labeling regulations.
The enforcement of regulations in China is also “flexible”, correlated closely to the strength of the relationship your company has with the local and national government. The better the relationship, the fewer laws apply. But, in order to enjoy this favor, you must maintain relationships. The CEO was not much for relationship-building.
He did manage to build a company over the course of about 3 years, with a staff of around 300 and continuously rising sales. The company was expanding, and to the investors, things looked good. The investors also did not get the brusque treatment from the CEO.
As usual, the downfall came slowly, and then all at once. His toxic behavior alienated employees, leading to high turnover. The high turnover ensured that several employees that were key to maintaining a close relationship with the Party and government left. After a particularly nasty shouting match with a sourcing manager (who both promptly resigned, and happened to be closely connected with the local party officials), the Shanghai government became acutely interested in the food handling violations of the firm.
The CEO took a confrontational approach. After several ordered shutdowns of on-site kitchens, the CEO complied, only to reopen them a week later. After repeated violations, government agents came and physically locked the doors for a mandatory suspension.
This back-and-forth continued for a few months. The government would order the company to stop doing something, like preparing food on-premises or repackaging frozen meat (cutting meat while it’s frozen is a travesty and an affront to civilization). The company complied, only to resume their offending behavior within a week. A surprise inspection (undoubtedly tipped off by alienated and bitter staff members) would bring the law down again.
The Fugitive Grocer
After several months of this, the police came to arrest the CEO outright. He fled through the back door of the building, frantically buying a ticket to New Zealand on his phone while scrambling down small, garbage-filled alleyways to avoid the police.
With 3 months he was removed as CEO and kept on only as an advisor on the board of directors. Within a year and a half, the company was bankrupt. Buried under the burden of spoiled relationships and years of resentment by the staff.
The “big problem” was so obvious that it became invisible. The temper tantrums and hostility became normal, a part of life, and the employees either left or kept their heads down to avoid the wrath of the CEO. By the time anyone with real power to change the situation actually faced the problem, it was too late. The big hole in the ground expanded under the makeshift scaffolding of coping and swallowed the company whole. For years the big problem wasn’t fatal, and yet, one day, it killed the company.
The more people experience a broken process, the more “normal” it becomes. The more “normal” that process is, the less impetus there is to change it. As the original broken process persists, ways to work around the issue develop with increasing complexity. Like a piece of detritus that jammed itself into an oyster’s shell, hacks and “temporary fixes” create a pearl of misery around the underlying problem.
One day, finally, someone with real power and authority tries to fix the big underlying problem. It’s been years now, and as the organization has grown and adapted, covering that problem with structurally unsound and highly complex bureaucracy. Unless the person moving to fix the problem knows the history, understand the workings of the firm, and has the power and resources to fix the big problem, it won’t get solved. Any attempt to solve it that is not backed by overwhelming power and resources will fail. The organization will actively protect that thing that has been wasting resources and stealing sanity from it for years.
A new hire or a consultant without a huge amount of organizational buy-in is no match for this kind of festering, hidden wound. As Harvard Business Review puts it “managers build concentric circles of excuses that absolve them of accountability for change or improvement”. The problem that has gone unsolved for too long is now your modus operandi. The fact that it has existed for a long time becomes the excuse not to do anything about it. This “tradition” also justifies a weird sense of protectiveness — with the staff trying to warn off anyone trying to solve it.
Solving it would endanger peace and comfort. By tearing at the protective layers of hacks, bureaucracy, and coping, you are tearing up years of work and upsetting the status quo. Entire jobs may have grown around dealing with this problem. You might be putting someone’s livelihood, or even worse, pride at risk. Humans often dislike change, even if that change means the rectifying of a dysfunctional system. Those who have found their place in the system will defend it vigorously.
Culture Problems, Culture Solutions
Not being clairvoyant, you can’t tell your boss or client that the big, invisible problem will bring the company down within 5 years. There are many employees that are, in this very moment, dutifully papering over the invisible problem that will one day swallow their livelihoods. By the time that happens, it will be too late to face it.
Companies who have strong, attentive, visionary leaders may be able to avoid these problems because the hard-nosed visionary leader faces them. The story of Steve Jobs ordering a replacement of the iPhone screen after seeing that it was easily scratched comes to mind. Once the visionary leader departs the company culture may change drastically, and precipitate in the decline of quality, just like Apple. While individual leaders can and do make a significant difference, a culture of transparency can help protect businesses from dying from a hidden disease.
In an organization that actually fosters the communication of “the whole truth”, good things happen. Employees are more engaged and enjoy a more resilient organizational culture. Transparency builds trust between the team and the leadership and between the company and the consumer.
Of course, transparency is not trivial to build. It comes at a cost. As Glassdoor puts it:
“The knowledge that the truth isn’t always pleasant means that even as adults, many of us hold back when transparency might make us vulnerable.”
Don’t Fight the Mob
As a consultant, freelancer, or even just a new hire, you likely do not have the buy-in to push for a radical culture change. Even though your fresh perspective could help solve long-standing issues, you are not in a position to do so. Even if you’re hired as a change management consultant, you may run into endless roadblocks and resistance. Tackling the “invisible problem” head-on is more likely to leave you alienated and vulnerable than achieve real change.
Instead, learn to navigate the organization and understand the extent, not only of the problem itself but of the coping mechanisms developed around it. In order to get buy-in from others, you have to earn their trust. By seeking first to understand, you create the groundwork to be understood. In order to create change, you must allow yourself to be changed.
“Change before you have to.” — Jack Welch
Taking on the “invisible problem” will be difficult, painful for individuals and the organization as a whole. By creating the opportunity to be transparent, leading by example, and coming at the problems and fears of change with empathy, you can make change less painful.