How to stop the mediocrity pandemic

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(MoneyWatch) This week I visited a company that could become the next Zappos or DaVita: BNotions in Toronto. In a session with a few dozen of their leaders, my colleagues Carrie Kish and Jill Fagan and I explained that even great companies may have the seeds of future mediocrity. But the potential for this must be faced squarely and the seeds prevented from sprouting. We learned from our visit that BNotions' great fear was "becoming boring."

When Carrie, Jill and I left the company, it was like exiting a Disneyland ride and returning to normal life. And then it struck us that BNotions lives in fear of the global pandemic of business mediocrity, whose first symptom is extended periods of boredom at work.

In fact, the company is paranoid about it. And for good reason. The odds are high that there are symptoms of the illness are present in your company.

Many fictional pandemic stories start with a science experiment (like a new virus to cure cancer) gone wrong, a stray virus devastating the population. The mediocrity pandemic starts with an important goal: the desire to formalize things, establish common practices and make sure everything is orderly. People should be in the right jobs, paid fairly, and promotions should occur according to established procedures. I call this approach tightening up.

The problem is that this tightening-up initiative easily gets out of hand, driving away genius, creating a "my life sucks" culture, destroying innovation and ensuring the company will be very well managed as it disappears into irrelevancy. Stephen Covey has called this approach "straightening the deck chairs on the Titanic."

The CEO of a midsize company recently told me that he'd love to hire a person I had recommended, but couldn't persuade his human resources group to go along. The candidate is a true genius -- with an IQ several deviations above average. I warned the CEO that this individual wouldn't fit into any established job description. The CEO liked the person -- a lot -- and felt he would be uniquely valuable to the company. But the SVP of HR said the hire was risky, that it would send the wrong message to employees, and that the candidate would not make a good fit. "What can I do?" the CEO asked me. "I can't undercut my HR guy."

In the year since this exchange, the company's revenue and reputation are both in free fall. Last time I talked with the CEO (a few weeks ago), he said that everything at his company was "just great," that "we're finally getting things in shape." His biggest challenge? "To convince the employees that we're headed in the right direction." If this company were publicly traded, I'd short their stock. This is a pattern for poor management: Tightening up creates systems that executives are afraid to override. Work becomes orderly and boring. And there's no place for a genius whose capabilities will shake things up and reset a company's course.

There is a proven way to stop the mediocrity pandemic: Perform a quick diagnosis of the biggest problem in the company. If the problem is systems, tightening up is the right thing to do.

But if the problem is something else -- strategy, what the company offers to its customers or culture, "the way people talk about themselves, their work and each other" -- then tightening up creates an organizational death spiral.

Tightening up is to companies what antibiotics are to a human body. Given the right diagnosis, antibiotics can save a life. Given to a person who has a different problem, they can make a person sicker and vulnerable to superbugs that science can't stop. (I talked more about this approach to leadership in my "How to Fix Your Company" blog post in December.)

Here's what to do:

First, pick out five people whose opinions count, and ask them all to diagnose your company. This free tool will help, and it takes only a few minutes. Then meet them for 15 minutes to discuss the results. Tightening up is a great remedy to a specific problem: Systems are out of whack, and the rest of the company is doing fine.

If the problem is strategy and managers spend their time tightening up, they become more inward-looking, blind to competition and slow to react. If the problem lies in structure and leaders tighten up, the people in the key positions will be disempowered and unable to make the right kind of change. If the problem is culture, tightening up can be lethal. Cultures need excitement, and big problems that call for big ideas and radical solutions will provide it. Sadly, I would estimate that 90% of companies have weak cultures and focus on tightening up instead.

Second, inject some fun into the works and set on fire systems and processes that serve no purpose. Every company has systems -- 80% by some measures -- that add no value, are not required by law and frustrate employees. They strangle fun and perpetuate mediocrity. Arrange a meeting now whose purpose is to destroy at least three procedures or systems. You'll find that meetings are quite popular when the goal is to set fire to bureaucracy.

Third, identify at least two dumb things your company does and highlight them. Right after our visit to BNotions, we saw a flare up of the mediocre pandemic when I tried to check us into our American Airlines flight back to the United States, and learned that American had canceled the reservation without telling us. They wanted $3,000 or 50,000 miles to reinstate them. Wouldn't it be great if someone at American Airlines read this and decided that today would not be par for the course and drew internal attention to the company's mediocrity?

Here's the real call to action: Boycott the most mediocre companies until they decide to replace their mindless systems and upgrade their "my life sucks" cultures. My tribe is boycotting American Airlines. At the airport in Toronto, we persuaded several frequent fliers to join our protest.

Is your company tightening up when it should be doing something else? If so, I hope you'll say what effect this has on the employees and customers critical to your company.

  • Dave Logan On Twitter»

    View all articles by Dave Logan on CBS MoneyWatch »
    Dave Logan is a USC faculty member, management consultant, and the best-selling author of four books including Tribal Leadership and The Three Laws of Performance. He is also Senior Partner of CultureSync, a management consulting firm, which he co-founded in 1997.

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