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Home » Useful White Papers » Getting from A to B: Strategies for Transforming the Dysfunctional Organization

  Getting from A to B: Strategies for Transforming the Dysfunctional Organization

by Cliff Kurtzman
Chief Executive Officer, ADASTRO Incorporated.

February 28, 2005

"The man on top walks a lonely street; the 'chain' of command is often a noose."

-- Dr. Leonard McCoy in Star Trek: The Conscience of the King, stardate 2818.9.

Last summer while attending a conference out in California, I had a conversation with two senior managers from an organization that was going through hard times. Both managers were considerably frustrated. They clearly felt that their company had the essence of a good business model and that their staff was a talented group of individuals who wanted to succeed. Yet the business was barely treading water and morale was very low. The workplace environment had lost much of its vitality. Instead of focusing on productive activities, staff members spent their time and energy dealing with issues that were mundane, trivial, or mostly personal.

In thinking about that situation and other similar situations I have faced in various businesses over the past twenty-five years, I wrote an article for the August 2004 issue of the Apogee (See: Is It Okay To Be Paranoid If They Really Are Out To Get You?). In that issue, I talked about cognitive distortions that can enter the workplace, and I also laid out two types of organizational cultures, which I labelled "Type A" and "Type B." I wrote:

The Type A corporate culture is one in which people operate on the basis of rumor and hearsay. The workplace becomes histrionic, drama queens and kings are ever present, and employees engage in frequent "scandalmongering." Staff members speculate on the future of their business, their competitors, as well as their co-workers based on loose conjecture and wild extrapolation of facts. Employees in this type of culture tend to be quick to assign blame, share disruptive information with those who have no business need for that information, and magnify the repercussions of negative events.

The Type B corporate culture is one in which the spreading of rumor and hearsay is replaced by fact finding, analysis and investigation. Employees stay focused on their part of making the organization successful, and when information of a speculative nature is acquired, it is understood to be speculative and passed on for further investigation only to those that have a need to know. Employees in this type of environment typically shun jumping to conclusions until all the facts have been acquired, and work to minimize and contain the repercussion of negative events. Responsibility and authority tend to be very well aligned in this type of an organization.

Organizations with Type B cultures tend to be successful far more frequently than those with Type A cultures. While it is unfortunately easy to go from having a Type B culture to a Type A culture, it is far more difficult to shift an organization with a Type A culture towards Type B.

In response to that article, Apogee reader Andrea Baker noted:

"Now the question is, how can a manager shift the culture from Type A to Type B? Is it simply a question of the types of individuals you hire in the first place? Or is there a special alchemy that turns pessimists and nay-sayers into optimists and producers? From what I've observed, bringing about such a sea change is nearly impossible."

When I received Andrea's e-mail, I knew I would have to do at least one more Apogee issue on just that very subject. It is possible to turn a Type A culture around, but it certainly isn't easy. Of all the types of projects that ADASTRO addresses, helping businesses deal with this kind of organizational dysfunction (sometimes called "derailment") is probably one of the most difficult.

Why is it so hard? Not because it takes technical expertise and know-how. Compare dealing with this kind of a problem to a more strategic project such as defining a branding strategy, mapping out an e-business approach, developing a corporate mission statement, designing a new venture, or determining what a company should do now to maximize its value five or ten years into the future. Between me and the other folks who support me at ADASTRO, I have one heck of a brilliant brain trust at my command. Give us a business strategy problem to solve, an understanding of the initial conditions, and the resources we need to solve it, and I know with absolute confidence that our "rocket scientist" process is going to come up with a creative and innovative strategy for shaping the future of our client's business that will maximize long-term value.

A derailment problem is so much harder to address because, at its core, it is a people problem, not a strategy problem. And fixing a dysfunctional organization or division requires changing people's negative behaviors, which may be deeply rooted.

In order to solve this type of problem, I find it extremely helpful to divide the workforce into two segments and address them each in a separate, yet related, manner. The first segment consists of just one person... the boss, the CEO, the division director, the department head... whoever the heck is the leader with command of the ship. The second segment is everyone else.


You would think that it would be simple to identify the leader, yet sometimes one finds a situation where they can't even figure out who is in charge... no one will admit to it. In such a case, the consultant's role is to put on their wizard hat, take out their wand, and anoint a captain to the ship before it sinks completely.

There is no getting around the fact that the captain is responsible for the ship and must take ownership of its problems. Sometimes an organization can get into trouble due to circumstances entirely outside of its control. But when the nature of the trouble is this type of organizational dysfunction, it is - always - at some level the fault of the captain, and - always - the captain's responsibility to fix it. If whoever is in charge won't accept that reality, then there is no chance of helping the organization.

In looking at the organization's problems, I find that the nature of the leader's failure generally fits into (at least) one of three categories. Identifying the category that the leader fits into helps craft an appropriate remediation strategy:

Category 1: The leader initiates and engages in behaviors that are the direct cause of the dysfunction. These behaviors may include:

  • Micro-managing;
  • Playing politics and showing favoritism with the staff;
  • Being cold, aloof, arrogant, intimidating or insensitive;
  • Lacking subject-matter competence;
  • Engaging in unethical conduct;
  • Having a poor or arbitrary decision-making process; or
  • Failing to communicate well.

Many of these behaviors are difficult to deal with, because changing them usually requires getting the leader to modify core personality characteristics, and solutions need to be tailored to the specific individual. Using specific examples and case studies, and then showing the leader how acting differently in those situations could yield different results, is sometimes an effective strategy. When dealing with a function that is outside of the leader's strengths, it is sometimes possible to get the leader to recognize those situations and realize that they need to either bring in advisors or delegate authority to others with stronger skills.

Category 2: The leader didn't create the problem environment that exists within the organization, but he or she may have nonetheless participated in that environment and at times even encouraged it. Often this situation will occur simply due to a lack of experience. The leader won't realize that practices going on in the workplace will be harmful until they lead to a crisis that requires serious correction. Continued experience, a willingness to learn from one's mistakes, and coaching from trusted mentors can often help correct the situation.

Category 3: The leader neither created nor participates in the problem behaviors - however, once made aware of them, allows them to continue. Or the leader is so detached from the organization that he or she remains completely ignorant of the behaviors. Such a situation is best dealt with by getting the leader's head out of the sand and helping him or her see that avoidance will lead only to more problems. The leader needs to be shown how to take a more active role in understanding what is happening within the company and how to manage the resources at hand to prevent problems from occurring in the first place and to correct the ones that do occur.

Many people think that charisma is a very important leadership skill, but in fact studies have shown that having what most people would call a "charismatic personality" is not a strong prerequisite for being an effective leader of a business organization. A lack of ethics, or a lack of subject matter competence, usually isn't the root problem either.

A few weeks ago, I had a chance to hear Dr. Brent Smith speak at a Leadership Houston seminar. Dr. Smith is an Associate Professor of Management and Psychology at Rice University's Jesse H. Jones Graduate School of Management. In talking about leadership derailment, Dr. Smith referenced studies that had been done looking at individuals who had seemed to be promising leaders but who had failed to meet expectations. These studies found that a lack of adaptability is the most common and most significant problem that holds a leader back from fulfilling their potential. Effective leadership requires that the leader have a good understanding of their strengths and weaknesses, that they be able to seek help in areas in which they are weak, and that they are able to turn their mistakes into learning experiences that help them become better leaders in the future.

Experience is critically important, but it needs to occur in a context in which others are there in a coaching capacity to help manage the process and ensure that proper lessons are learned. And it is not suitable or even possible for a leader to turn to one of his or her employees to provide such a mentoring role without conflict of interest - it needs to come from someone independent and outside the organization, and who is able and willing to loyally provide the leader frank advice even at times at which they don't particularly want to hear it. Over the years I have found, and continue to find, that getting this kind of external coaching support from others has been critical for my personal growth as a leader, and I also find again and again that my serving as a coach to others helps me see my own strengths, weaknesses, and actions in a vastly clearer perspective.


I also find that it is usually possible to classify the rest of the team members into one of three categories, and identifying the category that they each fit into again helps craft appropriate remediation strategies:

Category 1: There will likely be some small group of employees who come to work each day and do their job, and refuse to become involved in the politics and drama going on around them. If they find the craziness going on around them becomes more than they can stand, they will simply leave and go somewhere else, and do it without drama. These individuals are valuable employees, and to retain them they need to appreciate that the leader sees the problems within the organization, intends to fix them, and highly values their levelheadedness.

Category 2: There will be a large segment of the employees, one in which the majority of the staff fits into, who don't create the problems within the workplace, but get drawn into participating in pathological behaviors, while at the same time wondering why management is not doing anything to fix the situation. In their minds, they are just playing by whatever rules seem to be in effect at the time. Generally these employees will be overjoyed to see management come in and resolve to fix the problems that exist in the workplace, but they will be skeptical about changes. They will have to be strongly convinced through consistency of action by their managers that the changes being made are real and not just superficial lip service. These employees need to appreciate that they each need to set an example and are themselves a critical and valuable part of the solution. And they also need to see that employees who continue to engage in destructive behaviors are dealt with swiftly and appropriately.

Category 3: There will be some small segment of employees who thrive on having a dysfunctional organization. These individuals will be the gossipmongers, and the rumor spreaders. They will lie to play one employee against another. They will break confidences and betray trusts whenever they think it will benefit them. My experience is that these individuals are not salvageable as employees. One way or another, they need to leave and leave quickly. In most cases, when they see that the behaviors in which they have engaged will no longer be tolerated by their management and their peers, these individuals will either run away quickly to become another organization's problem (you can applaud when your competitor hires them!), or in frustration to the new order they will often commit some act of rebellion or retaliation so egregious that it will be obvious to all why the leader quickly terminated them for cause (if they have not yet had a chance to pink slip them).


In summary, if you can think like a rocket scientist and keep your head when all about you are losing theirs, then it is possible to transform a dysfunctional organization. The process is intimately tied to a process of change and learning that is usually painful, but the alternative (letting the dysfunctional status quo continue) is even more painful. It is critical that the leader changes his or her behavior and be willing to learn from advisors, mentors, and coaches. The leader then needs to act firmly and resolutely as well as advise, mentor and coach those within the organization. The chief problem makers within the organization will leave, and others will gladly adapt to a more rational new order. Respect that was lost can then be regained and earned over time, and the organization can again focus on rising to the stars and becoming a truly extraordinary business success.

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