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Embrace one problem after another.

Article Excerpt
EXECUTIVE SUMMARY

Problems stem from change, and that's healthy. Abnormal problems, however, can creep up as an organization makes transitions throughout its corporate life cycle. Keep your company strong by taking charge of its destiny and embracing the necessity of change.

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Companies, like people, go through life cycles. They are born and grow, and unless management knows what to do and how to lead, companies age, disintegrate, and eventually die. As an organization makes the transition from one life cycle stage to the next, change causes disintegration.

Every problem stems from something that is falling apart. Organizational problems are the result of a system that is falling apart. There's a popular notion that the way to prevent systems from failing apart is to prevent change, but that's the equivalent of committing organizational suicide. Leadership's role is to guide the necessary change that creates new problems, integrate the organization so it can solve those problems, and prepare it to be changed again in the face of new problems.

It's vital to distinguish normal problems--transitions organizations should experience in order to move to the next stage of the life cycle--from abnormal problems that need not be experienced. The treatment at any stage of the life cycle is to remove abnormal problems so the organization can progress to the next stage of the life cycle and experience a new set of normal problems.

If leadership does not assume responsibility for breaking the system the way it wants it broken and then integrating it at a higher level, the system will break by itself and recede to a lower level. Inaction surrenders an organization's demise to outside forces. An organization remains healthy by taking charge of its destiny, changing what needs to be changed. So the role of leadership is not to prevent the system from failing apart but to lead change that causes the system to fall apart and then to reintegrate it into a new, better whole.

To do this, management must know what lies ahead so it can be more agile and act proactively. If an organization's leadership can predict changes in business, it will know what is ahead and problems won't be surprises or, worse, crises: They will be events for which the organization has planned and prepared for. Change can be predicted. Future problems can be anticipated because they appear in recognizable patterns and have common causes.

As organizations make the transition from one life cycle stage to the next, they must abandon old patterns of behavior to embrace new ones. When energy is expended to make effective transitions from old to new behaviors, the organization's problems are normal. If the energy is expended inward in futile attempts to remove blockages to change, the organization is experiencing abnormal problems, spending energy but nevertheless stymied. If the abnormality is prolonged and threatens the organization's existence, its problems become pathological.

Normal problems are transitional in nature (what psychologists call age-appropriate problems). Managers encounter them, solve them, learn from them, and move on. Abnormal problems are cul de sacs: One drives t around in circles, seeing problems repeat over and over again. Abnormal problems retard an organization's ability to develop, entrapping it in a given stage of the life cycle. Pathological problems are distinguished from abnormal problems by their gravity and chronic nature: Obvious examples are uncontrollable negative cash flow, continuous defection of key employees, unresolved quality problems, rapidly declining market share, and inability to raise financial resources.

An organization can't avoid normal...

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