The Niagara Syndrome
The Causal Loop Diagram of Fig. 1 describes a business environment in which the management of the organization is substantially less capable than it could or should be and the employees are a very astute.
Inept management action over time subtracts from the health of the business. The health of the business then subtracts from employee compensating action to maintain the health of the business. If the health of the business is good then there is little need for employee compensating action. You might say it's business as usual. Yet as the health of the business declines, which is most likely in this case, it subtracts less from the employee compensating action. Employee compensating action increases.
Employee compensating action adds to the health of the business essentially compensating for management ineptness. The health of the business then adds to inept management action. That is, since the business is healthy, the ineptness of management is compensated for by employee compensating action and management is deceived into thinking things are fine. This situation simply promotes management's continued ineptness.
If something within the system is not changed sooner or later inept management action will subtract from the health of the business to a point where employee compensating action will no longer be able to compensate for it. When this happens employees essentially reach their limit and give up and the system crashes, meaning the health of the business will decline very rapidly. When this happens management is most apt to be quite puzzled as to how things got to be so bad so quickly. This is often referred to as the Niagara Syndrome where everything seems relatively calm, and when the falls are finally perceived it's already too late to recover. If you have stock in one of these companies getting rid of it is probably a good idea.
- If you think everything is going fine, maybe it's time to get another perspective. Things are seldom as they seem. In this example the employees of the organization could probably quite aptly provide lots of insights regarding what isn't quite what it should be. Though with the existing state of management who's likely to listen? Escape might be a great strategy for the enlightened.
- For additional insights into this structure please refer to the Escalation Systems Archetype.
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