Have you heard of the Corporate Immune System? Its heavily related to “Culture: The iceberg that sinks organizational change“. It’s when an organisation pushes back against a change, often to the extent that causes major upheaval and rebellion in a company. A bit like the body’s immune system fighting back against a disease.
It happens when a senior leader fails to take the people with them when making changes or introducing new approaches.
A couple of big corporate examples to illustrate the point.
In 2005 the then Blockbuster CEO was truly visionary and could see where the industry was going.
He initiated the aggressive change they needed to move to an on-line platform. But the CEO did not do enough to convince the people of the company and the board, or take them along with him on this journey. He may have been brilliant, but insufficient change management led to his downfall.
He was fired and his successor reversed all of these actions. As we know they went bankrupt in 2010.
By the way, in about 2007 Netflix was offered to Blockbuster for only $50m, they turned it down!!
Ford Motor Company
Jacques Nasser took over as CEO of Ford in 1998 and instituted wide scale reforms, including many learnings from the .com companies. He diversified, investing in other brands and in other industries.
He also implemented many of the .com type policies, one example – the bottom 10% of low performers are let go each year. Despite its size Ford is still a very much a family firm and embraced many of those family values. So Nasser’s policies were very alien to the Ford culture, the “corporate immune system” started pushing back.
Again he did not take the people and the company with him, he got fired in 2001 – all of these moves were reversed.
How do you embrace the Corporate Immune System?
In order to avoid problems like this a leader must embrace the organisational culture and its many unwritten rules, must involve the people as much as possible and help them to understand and embrace the change (see “Culture: The iceberg that sinks organizational change” for more ideas and suggestions).