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Most companies are complacent and narcissistic

A senior manager recently asked me why organizations asked me for advice. It was a good question because it made me stop and think.

"Most organizations," I replied, "are complacent and narcissistic. They imagine they're better than they are. And they are more inward-looking than outward. On both points, they miss their opportunities to improve."

My questioner seemed somewhat shocked by my statement, but when we proceeded to look for examples in his own organization, it wasn't difficult at all -- and I think his company's great.

Corporate complacence

In this case, the senior manager's company has won multiple awards, withstood the recession well and has enjoyed a good reputation for many years. Those attributes look like advantages, but they can also be traps. The prizes have brought with them a certain degree of arrogance. Because they're best in the country at some things, the leadership team imagines it is fundamentally world class. But it isn't. There are many areas of the business which are merely adequate. Some are even inadequate. The fact that the company is regularly cited as excellent doesn't pertain to everything they do or everyone they hire. But it's human nature to dwell on the great news and discount the rest.

In this company's case, one department produces most of the prize-winning and market-busting products, while other divisions barely pass muster. Such a wide discrepancy suggests that one area is sucking a lot of time and attention while the rest is taken for granted. The organization, in my view, has two choices: Axe the other divisions or start pulling them up to a higher standard.

Corporate narcissism

When companies start, they are fueled by awareness of the market, usually because spotting a need is what led to the company's creation in the first place. Entrepreneurs start with great zeitgeist -- but as the business becomes bigger and more complex, it demands more attention. Focus shifts, slowly but surely, from the market to the organization itself. Process becomes important, even mission critical. Before you know it, the business of running the business becomes all leadership thinks about.

Shoshanna Zuboff charted the rise in managerial narcissism beautifully in her book "The Support Economy," in which she argued that companies failed when they lost sight of the fact that customers are the reason a business exists. Executives easily and quickly forget that those customers are highly market-aware and that they make comparisons all the time. If the leadership team isn't doing likewise, they're out of touch in a month.

In my case, I was dealing with a company that had no idea how other competitive business operated. They were startled when I told them how many organizations had thrown overboard the orthodoxies they held most dear. Their surprise revealed just how embroiled in their internal politics they had become.

It turned out that these two issues -- complacency and narcissism -- uncovered the key issues the management team needed to address. Identifying them took, at most, an hour. It didn't require huge amounts of time or towering intellect. All it took was a significant degree of courage and a smattering of honesty.

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