When organizations go bad, they usually succumb to one of six pathologies.
1. Myopic organizations: These are the kinds of places where the leadership is in the grip of a protective stupidity, where they can't see the bleeding obvious. Different parts of the organization stop talking to each other or garble each others' messages and people asking hard questions or pointing out the truth are swept aside, passed over or eliminated. The organization is caught up in group think. One of the best examples is Enron.
2. Bureaucratic organizations: Rigid and inflexible places. Not welcoming of ideas or creative people. Too heavy a focus on rules and process.
3.Passive aggressive organizations: Large and complex places. No decision is final, there is a lot of second-guessing, roles are vaguely defined to ensure plausible "deniability", quality information is hard to obtain, the quality of work is not accurately assessed, and beneath the apparent consensus and conflict-free veneer, plans and promising projects can't seem to get traction. There is little accountability. People have no idea what decisions they are responsible for and the organization itself teeters on a fulcrum of too much control and not enough. Those in positions of authority lack the information to make the right decision, and those with the incentives and information lack the authority to execute. The result: senior management thinks it controls stuff that it doesn't and the organization bristles with pockets of resistance.
4. Charismatic organizations: These are the places that move lock-step with a leader whose word is final and who is never questioned. Dissent is always crushed. Witness the many failed business leaders brought undone by the illusion of omnipotence and invincibility, blinded by a veil of fantasy and flaws in a seemingly brilliant vision with a powerful ego that could cast a shadow. And let's not forget that often behind charisma, there is illusion. The word "charisma" comes from theword "charis", a gift or reward. And in the classical Christian texts, a charism is a divine endowment from the Holy Spirit. In other words, charismatic leaders are almost seen as super-human and immortal. Nothing is further from the truth.
5. Paranoid organizationsThese are the sorts of places locked in a constant over-the-top battle with the forces of the outside world, including competitors, regulators and governments. These places can have a huge focus on internal rules, restraints and punishments, where employees suspected of disloyalty are either sacked or sidelined and where people who are not clones are ignored or refused promotion. Alternatively, these organizations can be locked in an over-the-top aggression and win-at-all-costs strategy. It undermines values.
6. Depressive organizations: These organizations are usually in mature, low-growth industries. They are usually very large. They know something is wrong, but can't get out of it, and instead just drift along aimlessly, often downstream. They are terrified of change, but when they decide to embrace it, they get it hopelessly wrong. Millions of dollars are poured into marketing campaigns and badly-conceived strategic initiatives that go nowhere and their managers can be apathetic, cynical and passive to the point where they are incapable of making decisions.