Complacency, not competition is the greatest threat to organisations. Andy Grove, the founder of Intel once said, “Only the paranoid will survive”. And many leaders share his view, President Xi Jinping, after assuming the position as President of China have even asked the communist party to conduct self-reflection exercises to remain relevant or risk losing legitimacy. In a sense, all organisations have some degree of complacency, but it only becomes a problem when it rises to unhealthy levels, to the point when a competitor comes along and manages to exploit it and render the incumbent irrelevant. But you cannot maintain a constant state of paranoia, it will wear people out and you may make even more mistakes. Microsoft – for a long time – was paranoid about how best to protect its Windows franchise, so much so that it took its eyes off other possibilities. That was how companies like Google and Apple had the opportunity to rise up and challenge the software giant. The answer lies in building cultures that are continually humbled by the opportunities and threats that it perceives. This will then ensure that complacency never rise to unhealthy levels.
Complacency is a formidable enemy
Most organisations, when they start up, had the fighting spirit, because they were the underdogs. It was always easier to rally internal members on the need to be stronger and tougher because after all, there really is someone out there who is better plus you need to survive. But after a while, when you start to win successively, start attracting media attention, this is when complacency begins its long march to creep up and take hold of your organization. Most organisations are designed to compete but not to deal with success. This is why complacency finds it so easy to take root once success gets to the head of rank and file. The more obvious signs of complacency taking root are:
First Sign: We are the leader in this or that
When the public relation statements focus more on market share leadership and not on the meaning and relationship with customers then it really has no room to accept the possibility that it can fail. This is when it gets dangerous because the company becomes fixated in getting everyone to recognise its status and power. This creates an unhealthy level of arrogance and makes it hard to have a culture of constant learning since you are already at the peak.
Second Sign: With more money, time to attract ‘brand-name’ talents
When some businesses become successful and are flushed with cash, they tend to believe that it is time to hire talents from brand-name companies bypassing the usual rigor for talent assessment. This becomes a problem because if you suddenly introduce a huge pool of talent who are familiar with another culture – some might have come from a more combative culture – it can severely affect the balance in your current environment, alienating rank and file.
Third Sign: Spend your way to sustain success
Buying companies is definitely a great way to boost the ego of an organisation and reinforces the sense that the business will never fail. Unfortunately, acquisitions take time to come online to make a real difference to a company’s performance especially if the acquired company is big and complicated.
These are just some of the more obvious signs but very often, complacency creeps up in unexpected ways because it is persistent. And it can happen daily, when people within an organisation resists learning and shows impatience with emerging ideas. When leaders cannot imagine the mighty fortress that they have built can ever be breached then they develop this mindset of superiority and ignores the environment around them. This is the stage when complacency finally takes hold and begins to choke off innovation. Cardinal Jorge Bergoglio, in criticizing his Church – the largest organised religion in the world – noted that when an organisation “becomes self-referential, it gets sick”.
Confronting the Cancer of Complacency
Organisations need to openly confront the effects of complacency and how it threatens sustainable growth. In Asia, many leaders do talk about it during employee meetings, hoping to jolt them to fight this symptom. But talking about it is one thing but redesigning the organisation to deal with it will be more critical. In our work with Asian organisations, here are three useful approaches to combat the cancer of complacency:
1) Focus on the least within and outside of the organization
If you want to know how badly your organisation is doing in terms of complacency, start with the youngest staff or the ones in the lowest rank. See if they identify with the purpose and vision of the company. If a majority of them don’t express a sense of purpose and understand the reasons to fight for, then it is a fairly good indication that you have a problem on your hands. In a similar way, find out how your smallest customers perceive your organisation. If the feedback is persistent that they have been neglected, then it means that complacency has taken hold.
This is when it is necessary to get leaders to schedule regular time during the year to interact with people on the ground. Ensure that leaders plan time to pro-actively go out to the front lines and understand issues at hand through observation and conversations. Constantly ask leaders to find new ways to be interact with others and ask them to get out of their comfort zones. We found that when organisations encourage close contact with the staff and customers at the lower end, they tend to pick up signals of change faster and are more prepared for the future.
2) Challenge your leaders, shake their perceptions of opportunities and threats
The nature of competition is constantly changing and it is important to get your leaders to be humbled by the scale of opportunities and to be sensitive to threats. Many organisations, especially the larger ones tend to be blindsided by threats because they tend to ignore one-off events without connecting the dots. It is important to develop leaders who are able to take a whole set of readings from different parts of the company and the competitive environment and then develop a sense of direction. Many leaders get caught up by what they need to achieve in their department but fail to see the connectedness of their problems.
Therefore it is necessary to establish a programme of “co-interests” by getting leaders to recognise opportunities and challenges, to see from each other’s eyes. This can take place during annual meetings where instead of only presentations, leaders can ask questions on the challenges faced and even consider ways to collaborate if needed. This can get difficult for organisations who are market leaders without an obvious threat. In those situations, the CEO has to help the organisation see the evolution of the market and how unlikely threats can emerge. In other words, the CEO has to create invisible ‘predators’ in order to keep the company on its toes and ensure collaboration.
3) Build a listening culture instead of one that only knows how to react
At the end of the day, it is impossible to root out complacency completely. Similar to cancer, every organisation is complacent to a certain extent. So the wiser thing to do is: how can you create a culture that knows how to keep complacency in check. We have found that when leaders in the companies have a culture of listening before jumping to conclusions or dismiss them tend to be the best at keeping complacency at bay. These companies are extremely competitive as they are hungry about new insights that can help them advance faster. So they take an objective view when it comes to receiving feedback. This is not easy to cultivate and the organizations who possess this attribute have the following traits:
a) If someone bothers to say something, that means they care
These organisations understand that a criticism and a comment usually comes from people who care and it is worth a listen. And the more they create this environment of openness then people will share more in-depth and valuable feedback. So whenever someone wants them to stop to pay attention, the leaders invest in taking time to listen and listen well.
b) Whatever you say matters and something will get done
These listening types of organisations make it a point to respond. It does not matter if the leaders do not agree but they bother to provide a response. This helps to encourage a culture of useful feedback. When an elderly woman commented about how hard it was to open a delivery package from Amazon, the company took notice and let her know that they valued her feedback. This sense of seriousness and dedication is priceless and is one of the reasons why Amazon is so competitive as a business.
c) Great ideas can come from anywhere
In a rapidly changing world, the leaders of the organisation do not have the monopoly of good ideas. To stay ahead, the first thing to do, is to have the ability to try and listen well from different stakeholders. Every leader should be assessed to see if they possess this ability to listen with intent. And having systems that allow leaders to gain access to ideas fast is critical. Because at the end of the day, ideas are cheap, it is only when they are implemented then the value is realised. So leaders must have this great ability to listen and to put the ideas to work.
Living in fear and in paranoia is not the solution, a more sustainable way is to build a culture that knows how to keep complacency at bay and replace it with a healthy dose of collaboration through pro-active listening and response. There will always be a better competitor out there but once you have a healthier culture in place, you will find that people know what to do because it is business as usual since they have never taken anything for granted.
This article is part of a weekly column called Shaping the World where Lawrence and Shiraz share insights and ideas about building innovative Asian Brands. It is published by one of the leading dailies in Sri Lanka, Ceylon Today.
Lawrence Chong is the CEO of Consulus, an innovation consultancy specializing in helping Asian companies transform their business models to rise up the value chain through business design, organisational development and designing new brand experiences. Consulus’ country representative in Sri Lanka is Shiraz Latiff who is also the CEO/Lead Consultant of Hummingbird International, a regional knowledge house specializing in coaching, consulting & outsourcing through global partnerships & collaborations.