4 Reasons Why Organizations Become Stagnant and How To Avoid Them


Usually, when a company is started, it’s founded based on some sense of purpose that the founder or founders were passionate about. For example, I worked for a company in St. Louis, Missouri called Life Skills. Life Skills is a non-profit organization that helps mentally challenged people live an independent life. I’m sure the founders saw that there was a need for the service and was very passionate about starting this company.

During the founding years of most companies, organizations tend to be the most aggressive. The founder(s) think outside the box and are very creative when they’re trying to get the company off the ground. They also tend to think of creative ways to finance the company, are more willing to take risks and don’t concern themselves too much about losing what they have.

But as companies and organizations become more successful, things change. The same company that thought outside of the box, took risks and operated on the principles of being become stagnant. They become a “me too” organization. It’s understandable because it takes so much hard work to become successful. No organization wants to risk losing what took so long and hard to achieve.

But playing it safe or playing not to lose will ultimately cause your company to become stagnant and eventually your company will decline. Playing it safe is just one of the reasons that a company become stagnant, here are several others:

1. They don’t adapt to change or unwilling to change. I bet you can think of several companies that didn’t adapt to changing consumer trends and they’re not either about to go out business or defunct. Change is constant in the business world. And with technology having such a huge impact in today’s economy, change is more frequent and more radical than in the past.

2. Leaders of organizations don’t grow. Leadership isn’t a constant thing. Leadership is an evolving thing. As a leader, if you don’t invest in your growth by reading, attending conferences or networking, your followers and your company won’t grow. Leaders must constant educate themselves on leadership and their perspective industry.

3. The followers in the organization don’t grow. Many leaders in companies don’t see the benefits of further educating and training their employees. As the economy and technology change, employees have to be able to keep up with the new technology and new ways of doing business. Also, it’s important for your employees to grow as leaders. Although not all employees are in charge, all employees are leaders. It’s important for leaders not only grow in their perspective fields but as people.

4. Companies are afraid to take risks. While no one suggests running a business by the seat of their pants, a company has to take risks to remain in business and to grow. What I’m suggesting is calculated risk. While there still aren’t any guarantees, not taking any business or trying different ideas certainly contributes to companies doing things the ways they’ve always been done. When that happens, decline is certain. Companies should always seek fresh, new and better ways of doing business, providing a service or developing new products. This is what separates your business from the rest.

Business and the economy is constantly changing and evolving. And make no mistake about it, being is business is tough. Especially in today’s economy. It’s hard to keep up with the new technology, new ways of doing business, new products and constantly changing consumer demands. And to top it off, profits in many industries are either tailing off or declining. To make things worse, many services are becoming obsolete.

However, you cannot stay the same and compete in today’s business field. You have to find a way to stand out. That means taking risks, constantly learning and improving. But it’s worth it. If you are willing to do what it takes to stay in business, you can succeed and do well.

I hope this article was helpful. And as always, I would like your input. Submit your comments and replies in the comment section. Look forward to hearing from you.


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