Measuring Zombie Organizations: From Strategic Inflection Points to Yellow Cards

A key part of understanding Zombie Organizations is to build a limited but powerful collection of tools for measuring ZO behaviours, initially to understand, but ultimately to develop the ability to restrict and limit the power of Zombie attitudes.

The first, classic signal of an organization where ZO behaviours are dominant, is what Andy Grove (Intel co-founder and CEO 1987-1998) calls the arrival of a “Strategic Inflection Point” in the life of an organization. A Strategic Inflection Point is point of no return, when the balance of forces maintaining the current structure of doing business shift, to something new and never change back.  

Here are a few examples. In the military, we see the rise of asymmetric warfare with its use of improvised explosive devices to reduce the mobility of conventional enemies and the response of Unmanned Aerial Vehicles (UAVs) to restrict the mobility of terrorist leaders and raise the risks of concentration. In the pharmaceutical world, we see the end of traditional high-attrition rationales for generating high-earning “blockbuster” drugs, as the low-hanging fruit have all been harvested within the current scientific paradigm and the move towards networked pharma relationships that only risk invest in prototypes developed by others with higher levels of confidence in mechanism and safety. In the NHS, we will see the end of the cult of investing in modernity and the return of nursing apprenticeships to raise patient care to acceptable levels. In the Metropolitan Police we see an organization where the means of policing have become the end in themselves, where political models are more important than policing models. In higher education, we see the increasing questioning of the utility of traditional academic education designed for a world that no longer exists and lack of evidence that it encourages the ability to think objectively as well as creatively and to participate in the workplace. It could be argued that our education systems have become an end in themselves, as a means of ensuring a dangerous conformity of thought that we (and students) can no longer afford to invest in.
This kind of shift is often gradual and unrecognizable to leaders in ZOs, who are confused by the familiar elements of the past, who rationalize the emerging shift by suggesting that it’s merely a temporary blip in the economy, it’s seasonal or that customer demand will shortly return to the norm. Instead of trying to understand the emerging nature of change, classic knee-jerk ZO responses include cutting people in support functions, reducing product costs, and refocusing on the traditional core business (that is itself in decline).

Recognition of the emerging reality within ZOs takes place in stages:

·         Stuff that used to work becomes ineffective, previously effective teams, methods, processes and techniques fail to deliver.

·         In public services, the ZO becomes part of the problem: they institutionalize the problem that forced their creation instead of solving it and require even more resources to manage new problems (as well as the old ones) instead of re-thinking their purpose and refocusing on the old and new customer.

·         Customer attitudes shift, new customers emerge that you don’t understand and competitors you have never taken seriously before take chunks of your business.

·         A contradictory world grows in your businesses between what is supposed to be happening officially and what is actually happening (some front-line try workers adapt to reality, others start going through the motions, passively ticking boxes, people start going sick).

·         Ideological wars erupt between those who want to continue investing in the past (because they believe the change is temporary) and those who want to invest in the future (because the past is over).

·         Smart people start leaving because Zombie leaders are in denial about the death of the old strategy. The cycle of staff cuts begin. Zombie leaders gold-plate their pensions and their share options. HR announce Talent Management strategy to attempt to retain smart people (though they never define what they mean by talented). This reinforces the political strength of the Zombie Leaders who can use the manpower cuts to eliminate the advocates of innovation, recruit officially smart people to their structures and reinforce their power.

How to Begin Dealing with ZOs Encountering a Strategic Inflection Point

1.       Ask yourself whether you would risk investing your pension in the current business. Consider what would make you nervous about the future of the organization, what specifically is missing from the strategy portfolio, and what is being done about it? Knowing what you know, do you want to bet your future or your pension on a ZO? Get others to consider this question.

2.       Introduce the idea of Strategy Lifecycles. In other words that all strategies go through an S-Cash Curve of investment, realization and decline. That the key is not to be wedded to a particular strategy but to measure and pay attention to the location of each strategy designed to deliver innovation and value in terms of its lifecycle. This means that the only issues are around replacement (let’s sell it and invest in something else that’s more profitable and effective) and extension (let’s invest a little bit more or combine the strategy with another to grow or introduce new value).

3.       Build a strategic portfolio of experiments with new ways of doing business with new and old customers whilst you are still have assets and strength to invest.

4.       Create a new yellow-card rule. Issue colleagues with yellow-cards that signify that it’s OK to say when things are no longer working, that it’s not a betrayal of fellow-workers and colleagues. It’s not saying that you won’t pull your weight and commit to the current approach. But it is about making it OK to have a rational conversation about the way we work, our purpose, our strategy and our tactics: and do they still make sense?