Organizations are like sports teams – those that are successful cannot stay on top forever and some may never even get there once. Over the past 25 years of consulting and coaching, I have seen a variety of businesses, nonprofit organizations, and churches go from their peak to the pit. Sometimes, it happens fast, and other times, it takes a while.
One example of this is VeggieTales, an animated children’s series that was launched in 1993 and took off like a rocket. In an interview, Phil Vischer (one of the creators) talked about how the success led to more hiring, new studios, and a movie production. But then sales slowed dramatically, and the parent company lost a big lawsuit, ultimately leading to bankruptcy. All of this transpired within about 10 years. It went from vibrant, to plateaued, to… gone.
This can happen to ANY leader and organization, yet leaders are not helpless. Knowing why this happens and how to prevent it can serve as a good starting point. So, here are five reasons why organizations go from their peak to the pit and the remedies to prevent it.
1. Neglecting to find the right talent.
How often have you heard someone brag or post on social media about how average they are? Or about making the JV team instead of varsity (that was me – a very average soccer player in my junior year!)? Or getting a 2.8 GPA instead of a 4.0? Or working as a middle manager instead of a senior-level leader? Not too often. But when it comes to leadership performance, most people really are average. Average is not a problem unless you don’t have enough “rainmakers” on your team. Having too many rainmakers leads to flooding, but too few leads to an organizational drought. Finding the right talent is one critical factor that differentiates “great” organizations from “gone” organizations. Having exceptional talent does not mean they have the powers of a superhero. Rather, it means they have the right skills, passion, work energy, and team fit that is needed at a specific time in your organization’s lifecycle. And remember, talent attracts talent.
So, if you are having trouble finding and retaining talent, take a careful look at your culture and team.
2. Spending recklessly.
Several years ago, I toured the 21-story headquarters of what was once one of the largest companies in the world, employing 300,000 people at its peak. From the mahogany elevators to the marble floors, every part of the building exuded wealth. When the new headquarters was built in 1972, the company was still making extreme amounts of money. But only 15 years later, the company was in such decline that the building was almost empty of its one-time army of white-collar workers. This is not a unique story, and there is more than one reason for such declines. But you can be assured that reckless spending is almost always on the list when an organization goes from the peak to the pit. It is common for organizations to become over-confident because of their past or recent success which can result in overexpansion or grandiose spending.
So, do what your parents or grandparents told you years ago – spend less of the company’s money than is earned, ensure you have enough to get through a rough season, and take calculated risks on new initiatives.
3. Drifting from the mission.
Mission drift is easy to critique but hard to prevent. An appliance store buys an auto dealership. A college goes from being Christian to secular. Even The Center Consulting Group experienced this temptation in our early years. We quickly went from consulting and training to also hosting large event seminars, producing a music CD, and publishing a study guide. I could have justified each of these extras, but in reality, they were not our primary strength. So we snapped back to our primary expertise – consulting and coaching. Drifting from your mission can happen for several reasons including chasing after the “easy” money, allowing influential people to shape you and your products or services, and having an unhealthy desire to grow your visibility and reputation rather than your mission. While there are times when expanding your mission may be smart, it can also take you from the peak to the pit very quickly.
So, if you want to expand your mission, do so with discernment and a candid look at your motives.
4. Failing to see the future.
Blockbuster Video. Borders Bookstores. Teavana. Sears. Sports Authority. These are just a few of the organizations that failed to accurately see the future and pivot in a timely way. It is not always easy to see what is coming, and it is not uncommon to be very wrong when you think that you do. Even weather forecasters who have extensive experience and technology can miss what is coming. But there are always changing trends and technological disruptors. And your organization can quickly go from the peak to the pit when you are not aware of them or prepared for them.
So, if you want to avoid the pit, remain humble, listen to others, watch for trends, and avoid acting with invincibility.
5. Stumbling over sex (among other things).
I recently read about a church that was identified in 2015 as one of the fastest-growing churches in the United States. Yet, less than seven years later, that same church was watching its property be auctioned off due to defaulting on a $2 million loan. How did this happen? Pretty simple, actually. The leader of the church stumbled over sex – he was caught on camera with a woman who was not his spouse. And sadly, just like that, the church began to disintegrate. But it’s not only sex that can cause this. All leaders can stumble over a number of things including power, greed, money, and addiction.
So, know your vulnerabilities and avoid them as much as is possible. Or follow the advice found in the Bible and RUN before you stumble.
If you have already stumbled, seek help to get back up and start over. This happened to a good friend of mine many years ago. But he got help and hit the re-start button. Pits can be painful, but they do not have to be permanent.
Contact us to learn how our experienced consultants can help you avoid these pitfalls in your organization.
Jay Desko is the President & CEO of The Center Consulting Group and brings experience in the areas of organizational assessment, leadership coaching, decision-making, and strategic questioning. Jay’s degrees include an M.Ed. in Instructional Systems Design from Pennsylvania State University and a Ph.D. in Organizational Behavior and Leadership from The Union Institute.
