Finding the Roots of Organizational Incompetence

First let me define my term “Organizational Incompetence”.  Sometimes in business you sit in a meeting and hear people grousing and struggling, and perhaps arguing and talking over each other in their frustration.  The problems they describe are almost always not of their own making, nor do they have the wherewithal to remedy them by themselves.  You begin to perceive that on some particular aspect of business the organization just doesn’t do well, and it keeps posing problems to groups and individuals and holding up productive work.  The appearance is that the organization is incompetent, at least in some particular way or area, and is suffering from needless cost, waste, and widespread frustration and stress.  In essence, the organization or a system within it is dysfunctional.  So how does this occur and what can you do about it?

Organizational incompetence leads back to the usual source: poor management.  By this I am referring to cultural and systemic defects, and shortfalls in the talents and skills of managers in the hierarchy of the organization.  Small failings in unrelated areas of the organizational management structure can even combine to create clumsy or otherwise dysfunctional operations, and dysfunctional operations tend to be the most easily observed manifestation of organizational incompetence.  Usually activities that are routine for most businesses are noticeably beset with stumbles and roadblocks, or political issues involving fear, or with authority that is only an appearance and not reality.  Following the trail of evidence suggests root causes and, as in any proper root cause investigation, each cause typically has another (or several) behind it.  Let’s look at a case study.

An old, large, and successful corporation provides a good example.  Once I was in a meeting that got me thinking about this topic.  A major company project kept hitting rough spots and the stress was noticeable in meetings.  The company seemed focused on budget control to the point that their people had to stop work on our project on more than one occasion because budget had not been authorized on time.  I asked an acquaintance who was at the meeting about this and we arrived at the conclusion that the company, more than a century old with many successes behind it, either did not have an established spending plan that would support the project (unlikely?) or had a very dysfunctional spending plan (more likely?).  One might expect that an experienced organization would have such a plan and administer it in a way that would never get in the way of the work, but this was apparently not the case.  But was this really the root cause of the work stoppages?

In root cause investigations it is often prudent to dig deeper.  We considered the apparent lack of good funding management, and I conjectured that somewhere above the project there was a manager who was very sensitive to budget control and who was approving funding in only small increments, and only at the last minute, possibly due to a requirement for difficult-to-produce justification.  I further theorized that that person was probably not incompetent, but was probably driven by higher management to make financial control such a high priority that they felt it required a miserly approach – granting funding in tiny increments and at the last minute (or late).  Some managers are just cheap, or have no sensitivity to the impact their decisions, and the timeliness of their decisions, have on the success of the organization beneath them.  Some managers think that if you keep funding marginally low, workers will be more creative and will find lower cost ways of getting the work done even though there is no coherent direction or approach for this change.  Some managers may receive bonuses tied to the amount of funds they save or don’t spend.  This rarely works out well, unfortunately.

I almost never say a person is incompetent, as this should usually be qualified with “in the position where they’ve been placed”.  It may be that the person is well suited to being a dog catcher or a CEO, but either one will probably perform poorly as an engineering supervisor, for example, unless they had prior training and experience.  It is simple management savvy that virtually everyone (who isn’t a sociopath), wants to do good work, feel like they’re contributing positively, and feel they are appreciated for it.  Unfortunately people often are promoted or hired into positions for which they are not adequately trained, or for which they are simply not well suited.  Thus, incompetence must almost always be viewed in the context of the position, the organizational structure and type of business involved, and the management above.  In many cases the way the organization is structured, or the way division managers are compensated, leads to internal conflict or competition that reduces productivity and creates needless stress.  In other cases there is a management style at higher levels that leads to dysfunction lower in the organization.  Sometimes it is the reasons managers are given bonuses that drive dysfunctional operations. It takes savvy about human nature and the nature of organizations to understand and avoid such problems, common sense you might call it, but common sense is anything but common.

The trail of causes usually leads higher.  Manager X is keeping too tight a fist on funding, and is causing problems for at least one project beneath them.  The funding plan most organizations would put in place before project inception is either absent, requires too many approvals or too rigorous justification, or otherwise drives the unplanned work stoppages.  It is possible that financial management is either disconnected from the needs of the project or doesn’t understand the scenario they are essentially creating.  Manager X and/or his or her superiors may lack needed training in finance.  Someone in management may completely misunderstand the cause and impact of the work stoppages, and may blame them on subordinates or other parts of the organization such as project management.   The financial system may be below industry standards or need a fundamental redesign to suit the nature of the business.

Sometimes no clear root cause can be identified, and intuition and a sense of relative probability are needed.  As one pursues the trail of causes less and less data may be available, and the pursuit may end up with a tree structure of possible chains of cause and effect that can only be reduced by gathering more information or, barring that, applying inductive reasoning.  Here is a fishbone diagram I constructed, not fully developed but indicating directions and possibilities, to address the issue described above.

Fishbone (Cause and Effect) Diagram of Work Stoppage Problem

Understanding is a key part of coping effectively with any situation.  When you are forced to work with an apparently dysfunctional organization an understanding of its problems and their causes can mitigate some of the negative impacts.  If you know that they typically approve funding at the last minute and/or in small, barely sufficient amounts, you can apply a little risk-mitigation strategy.  For instance, you can ask the highest management you have access to to see that sufficient funding is approved,  and approved early enough to avoid work stoppages.  You can also ask that the topic of funding and timing of approvals come up regularly on the agendas at management reviews of the project, specifically citing losses in time and increased cost due to the work stoppages.  You can lobby behind the scenes to identify and influence people within the organization who suffer from or can at least see the problem, and perhaps positively influence the group that appears to be at the root of the problem.  In most cases you will never get to the deepest and most fundamental root cause(s), but if your actions prevent an extra day of work stoppage you have served the company well and saved it significant though often difficult-to-measure funds. 

Don’t assume others are seeing or thinking about the problem.  Dysfunctional operations, by definition, involve waste and reduce the positive impact of projects on the firm, but they are part of the system, which may have evolved over a long time or been set up by someone still on the scene who has a vested interest in it.  While you might think managers would be sensitive to such things, their position in the system frequently blinds them to important aspects of the problem, and they may have no view or sensitivity to the root cause, or may feel powerless to address it.

Progress is typically incremental.  While you may not be able to create any big change for the better, you can still focus attention on the issue(s), suggest small changes that will add up to improvement, and eventually see the problem mitigated to some degree, which is still a win for you and the organization.  Just helping people to see that there is a system, planned or evolved, by which things get done can lead to lasting improvement as they come to understand the system itself is the best place to make positive change.

In the final analysis, no organization or person is perfect.  Perspective is always a factor.  To the person who lives on the Great Plains, a mole hill may loom as a significant feature, while to a person who lives in the mountains, that mole hill may be quite invisible.  Try to look at the issues you confront in the overall context of the company, the industry, and the country in which it operates.  Try to anticipate how top management sees your issue (or if they see it, or need to see it).  Use tact when approaching such problems – there are many reasons to do so – and always take a positive and constructive approach.  In all cases you should not focus on blame, or how the situation arose unless that would be key to solving it.  Instead focus on the value of correcting the system in a way that will last and prevent future occurrences of the problem.  Your proactive approach might be noticed, and it will reflect positively on you.  If, on the other hand, all you are left with is a better understanding of the organization and its systems and culture, you are still better off.  Best of luck to you.

As always, I welcome your comments. — Tim

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