How some reliable organizations turn mediocre

Reliability is a virtue. Being predictable makes it easier to manage and plan. This is especially true for machines. Human beings on the other hand are expected to improve and get better with time. Unless we get faster and/or better with time, we are not doing justice to millions of years of evolution. Making fewer mistakes is awesome when we are doing something new but after a while it loses its shine. It is expected that human beings will have more to show than just being reliable (unless of course if we are talking about some state machinery like a government bank or something).

Organizations often feel obligated to promote people if they have spent 'enough years' in the company. It is a reward for their loyalty more than anything else. While it may seem fair in most cases, a lot of these people don't have the spark to move beyond middle management. The bright ones either move up the value chain or move out of the company. The not so ambitious ones keep collecting in the middle. They adopt a reliable 'low risk, low reward'  strategy and are satisfied in slowly paying off their home loan instead of seeking a remarkable career.

Let's profile them a little more. These leaders perform in a predictable fashion and are loyal to the organization to the extent of following the letter of the law. While they may not be calling the shots at a strategic level for the company, they are responsible for leading groups of people. Their inner instincts force them to set fairly reasonable standards for the teams they lead. They offer little incentive for outperforming expectations or worse even - they praise mediocre work.  As expected, innovation tends to die in such places. In today's competitive world, no company can afford to have a too many 'just adequate' leaders. While their durable and safe demeanor is charming and at times addictive, they can easily turn an organization complacent from the inside.

First the company misses the bus in reading the future and then they start sending average or unfinished products to the market (to compensate). It only takes a few quarters for shareholders to lose faith after the customers start to move on. Big companies, protected by their strong distribution channels, can afford to be mediocre once in a while and for short periods of time. But once the tipping point is reached - the game changes pretty quickly. Nokia and RIM are recent examples.