Ghost Myopia

Do you believe in ghosts? ?I do, because I have found them lurking in many organizations. ?The ghosts I encounter are often unrecognized by most people in organizational leadership, which is a pity because these ghosts are moving the organization in unseen and unhealthy ways or blocking movement that would be beneficial.

A Troubling Case

Take the case of a non-profit group that had done much to assist service workers struggling to live in the organization's relatively affluent service area. Clerks, servers, administrative assistants, cooks, lawn workers, mechanics and more - all sorts of people and their families had been helped by this group.

The dynamic, highly respected founding executive director built a good board and staff, and nurtured the organization through the early years and into a position of financial stability and respect. ?But the executive director's entrepreneurial approach - which served the organization so well when it was just a seedling looking for ideas and initiative - began to run up against the administrative and governance necessities that come with handling a growing amount of private donor and government funds.

For a long while the Executive Director did his thing, few of his moves questioned by the Board or staff. Yet there was a growing unease in the organization, nothing that anyone voiced or put their finger on, but nevertheless present. ?The result was that processes and checks that needed to be in place for accountability and to be sure funds were used according to donor and government rules - rather than only to be governed by the mission of the organization as interpreted by the entrepreneurial Executive Director - were not in place or at best were poorly developed.

The Ghost

The ghost in this organization was named "we leave it to the founder/Executive Director who got us to this great place to know what is to be done and to tell us what we need to do." This ghost was blocking the Board and staff from recognizing the rising strategic risk to the organization, its finances and its reputation from the lax accountability for a enlarging domain of activities, projects, commitments and funding.

If only the Executive Director had asked about the ghosts that might have been lurking. If only the Board had asked about what was not being discussed or recognized and had "red-teamed" the risk possibilities. If only the responsible staff reporting to the Executive Director had had the wisdom and moxie to ask questions and follow basic business common practice and see the lack of controls. And what about the outside auditors? It's their role to track down ghosts, ask hard questions and not settle for non-answers or "not a problem."

This story could have ended in many bad ways, including fraud and misuse of funds, ruined reputations, law suits, and an abrupt loss of assistance for those very much in need.

It did end in a less dramatic and less damaging way, but still in a way that was not ideal: The highly respected, capable, creative and well-intentioned Executive Director left the organization he had expended so much blood, sweat and tears to build. A senior staff member, when asked by the Executive Director to issue large checks to kick off a new project, finally decided to question the Executive Director. ?She challenged the release of funds, seeing that the Executive Director had not fully vetted the project with the Board and did not have proper paperwork to proceed. The ghost others couldn't see or refused to acknowledge suddenly appeared to her in full view; she saw the organizational risk in issuing the checks without additional authorization. So she took a personal risk in confronting the Executive Director and she then refused to issue the checks.

The dispute and struggle between these two very well-intentioned staff leaders suddenly fell into the lap of a surprised Board Chair and Board of Directors. The Chair and Board faced the unenviable task of telling the Executive Director that the entrepreneurial approach he had taken to build the organization was no longer sufficient and that henceforth he would ?have to observe a necessary regime of policies and practices put in place to keep the organization out of trouble and in the future good graces of its?funders.

The Executive Director quit, hurt that his integrity and entrepreneurial mission-focus had been questioned.

The "Unspoken" Lurks

The "ghost of the unspoken," which is lurking, unseen and yet discoverable strategic risk, appears in organizations of all types and sizes. Think about so many people who were blinded to the evidence of the fraud perpetrated by Bernie Madoff, so many people who could have challenged the lack of action and direction that led to the slide of Chrysler and GM into bankruptcy, and so many people who could have seen the irresponsible decisions over many years that led Detroit over the financial brink.

What "ghosts of the unspoken" lurk in your company, unit of government, association or non-profit? Are they benign or are they harbingers of disaster and ruin. Look for them: Go on a ghost hunt. You may be surprised by what you find, and glad that you found the ghosts before they could create more problems for your organization.

Outsiders Are More Likely to See Ghosts

A helpful hint: Let's call the inability of organizational leaders to see ?lurking, unseen and yet discoverable strategic risk "ghost?myopia." The closer to and more involved one is with the organization and its culture, the harder it is to see the ghosts, the greater the "ghost myopia."

That's part of the value brought by outside?advisers?and?facilitators?- they are less myopic. They often find it easier than the organizational leaders to spot the ghosts, recognize their malevolence, and help others to recognize them and deal with them.