Here is an excerpt from an article co-authored by Heike Bruch and Jochen I. Menges for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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Faced with intense market pressures, corporations often take on more than they can handle: They increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems. For a while, they succeed brilliantly, but too often the CEO tries to make this furious pace the new normal. What began as an exceptional burst of achievement becomes chronic overloading, with dire consequences. Not only does the frenetic pace sap employee motivation, but the company’s focus is scattered in various directions, which can confuse customers and threaten the brand.
Realizing something is amiss, leaders frequently try to fight the symptoms instead of the cause. Interpreting employees’ lack of motivation as laziness or unjustified protest, for example, they increase the pressure, only making matters worse. Exhaustion and resignation begin to blanket the company, and the best employees defect.
We call this phenomenon the acceleration trap. It harms the company on many levels—over-accelerated firms fare worse than their peers on performance, efficiency, employee productivity, and retention, among other measures, our research shows. The problem is pervasive, especially in the current environment of 24/7 accessibility and cost cutting. Half of 92 companies we investigated in 2009 were affected by the trap in one way or another—and most were unaware of the fact.
That’s the bad news. The good news is, it’s possible to escape the acceleration trap. Companies can sustain high performance over the long term without overtaxing their employees or confusing their customers. In this article, we’ll show leaders how to recognize the acceleration problem, start to move their companies in a different direction, and make cultural changes that will prevent future entrapment.
Being Trapped
We have studied more than 600 companies over the past nine years as we tried to understand acceleration. Our data provide a sobering look at conditions inside a company that is accelerating too much. At companies we define as fully trapped, 60% of surveyed employees agreed or strongly agreed that they lacked sufficient resources to get their work done; compare that with 2% at companies that weren’t trapped. The findings were similar for the statements “I work under constantly elevated time pressure” (80% versus 4%) and “My company’s priorities frequently change” (75% versus 1%). Most respondents at fully trapped companies disagreed or strongly disagreed that they saw a light at the end of the tunnel of intense working periods (83% versus 3% in nontrapped companies) and that they regularly got a chance to regenerate (86% versus 6%).
Most of the companies in our study landed in the trap after an exhilarating ride. A good example is the European conglomerate ABB. Founded in 1987 in a merger between the Swedish Asea Group and the Swiss Brown Boveri Group, ABB grew rapidly, buying 55 companies in its first two years. After eight years of strong growth, the company began to show signs of excessive acceleration. Acquisitions were no longer well integrated; different parts of the company were competing for the same customers. One annoyed customer, with seven business cards already on his desk from ABB salespeople, suggested sarcastically to the eighth rep that next time, they all get on a bus and visit him together. As we’ll describe later, ABB’s situation didn’t improve until a new CEO, Jürgen Dormann, extricated the company from the acceleration trap.
The Habit of Constant Change
Over-accelerated companies exhibit at least one of three patterns of destructive activity. The first is, simply, that employees are overloaded with too many activities. They don’t have the time or the resources required to do their jobs. Some 35% of firms in our sample overloaded their employees. Bombardier Transportation, the Berlin-based global market leader for rail transportation technology, is one example. It had experienced success and enormous growth, but in the past few years, it was operating in a continual state of overload. To keep up with competitive pressures, it took measures to optimize efficiency and enlarge capacity. But as the value of its contracts more than doubled, its number of engineers grew only slightly. The company has since addressed the overload problem, but at the time, employee burnout was a serious threat.
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Heike Bruch (heike.bruch@unisg.ch) is a professor of leadership at the University of St. Gallen in Switzerland. She is a co-author of with Bernd Vogel of Fully Charged, published by Harvard Business Review Press (2011)
Jochen I. Menges (j.menges@jbs.cam.ac.uk) is a lecturer in human resources and organizations at the University of Cambridge’s Judge Business School.