Two Reasons Why Your Organization’s Culture (and Profits) Will Be Shredded in 2010

Nov 4, 2009

Next year will see an uptick in the business environment for most organizations and a full-blown recovery for some. And yet many of those self-same organizations will lose their culture, lose their way (and lose a lot of money) next year.Why? Because of two highly disruptive, though avoidable, events:

1: Top performers will leave.

For reasons we’ll explore in the next post, 2010 will see an exodus of top performers (including long-term veterans) from many organizations.

Obviously, losing top performers just at the point when they’re needed to convert the fruits of an economic recovery is highly disruptive. Potential revenue will be left on the table, market share will go to competitors, operations will be error-prone and expensive, and efficiencies will go to pot.

But equally important – more so, in the long run – the departing veterans will take with them a big chunk of the ‘institutional memory’ of the organization’s culture, and the departure of top performers will lower the performance bar across the organization as a whole.

2: The hiring function will implode.

In many of those organizations that lose their veterans and top performers in 2010, the hiring function will collapse, crushing out of existence the last remnants of the organization’s current culture.

Already tasked with ‘staffing up’ to replace the not-so-natural attrition of the last two years, and additionally having to scramble to replace departing veterans and big dogs, many organizations will make expensive mistakes by hiring the wrong people – people who (for reasons we’ll explore in a future post) won’t stay with the organization for more than a few months.

The resultant ‘double- or triple-dipping’ – hiring (and losing) two or more people for the same position in a short time – will prove the last straw for the organization’s culture: the revolving door will strip away the remaining vestiges of institutional memory. Who we are, what is important to us, and how we operate will be lost in the scramble to simply ‘do’.

None of this has to happen to your organization, but failing to act now significantly raises the probability that it will.

In the next post we’ll look at how you can minimize the likelihood of the first disruption (loss of veterans and top performers) from happening to your organization, but for today, here’s the question:

Who are the keepers of your culture? Who, if they left, would by their very absence change how your organization operates?