London Calling

Why do good companies go bad? According to Donald Sull, who joined the Business Shrink live from UK where he teaches at London Business School, the most common explanations-- incompetent or corrupt executive leadership -- don’t usually hold water. Sull blames something he calls “active inertia” - an organization's tendency to persist in established patterns of behavior.

“What really explains why many good companies go bad is they get trapped by the very commitments that allowed them to succeed in the first place,” Sull told Peter Morris. “Once you’re aware of this dynamic of active inertia, the possibility that you make strong commitments and they allow you to succeed but when the environment shifts those commitments, those frames and processes and resources and relationships and values, those very hardened commitments, can be the source of your inability to respond effectively.”

Peter Morris agreed. “One of the most important things is to be able to continually reinvent yourself,” he said.