How do organizations fail? First gradually, then suddenly….

Gradual organizational decline is a strong indicator of approaching disaster.

This typically happens when organizations shift from falling in love with their customers, to falling in love with themselves, their products, or their processes.

I have compiled a list of ten red flags which mark an organization which is losing its ways:

  1. Ballooning number of Vice-Presidents and Senior Directors.
  2. Special perks for executives, unrelated to improving customer value.
  3. The quality of excuses for failure is more important than achieving the actual goals.
  4. Low internal rate of promotion to senior leadership.
  5. Celebrity executives, who spend more time on Twitter and Talkshows, than running the company.
  6. Moving Head Quarters to a new fashionable location to ‘attract talent.’
  7. Signing bonuses for new executives coming from outside.
  8. Strategic decision making is outsourced to external consultants.
  9. A Chief [insert the current organizational fad here] Officer.
  10. The lobbying effort for changing regulations is bigger than the investment in innovation.

Which red flags would you add to this list?

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