How Organizations Collapse

The Modern Survival Guide #111

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  1. Internal malaise
  2. Deliberate attack

External Shock

An external shock is anything that hits an organization from an outside source with a major detrimental effect. External shocks can be all kinds of things, but they all have three key features for this discussion: they are intensely disruptive to the ability of the organization to operate normally, they are unexpected, and they usually cannot be attributed to any one party.

Internal Malaise

Lots of organizations fail because of internal rot of one form or another. You’ve probably worked for an organization that had this problem. I know I have. There are many potential causes of collapse from the inside out, and here are some common ones:

  • Laziness or indifference in line workers
  • Laziness or indifference in management
  • Poor decision-making
  • The Iron Law paradox

Deliberate Attack

It’s worth remembering that most major organizations come under deliberate attack on a frequent basis. It’s often overlooked that just about every organization has to deal with politics. Remember that politics is primarily concerned with resource ownership and distribution. Every organization requires resources, and there’s always someone who thinks those resources should go elsewhere.

It All Falls Down in the End

There is an important lesson to take away from all of this, and it is: all organizations collapse. All businesses eventually shutter their doors. All institutions suffer cycles of failure and renewal. All nations fall in the end. There is no such things as an immortal organization; over a long enough timeline at least one of the things on this list will make an appearance in sufficiently devastating fashion that the organization collapses.

Searching for truth in a world focused on belief.