When a system has measurements that quantifiable, applied and monitored, the participants in the system will behave exactly the way they are measured.
A friend of mine has a sister whose husband has a cousin which works for this company. And this cousin during regular Happy Hours in a pub near his office met this guy who came with his secretary. She then spends a lot of time with him after work (dont ask me how the time was spent), because her husband stays out late all the time, spending most of his evenings with his office mates and managers.
Apparently, when he started working in this company, he had to go drinking with his managers because all the managers go drinking regularly 3 to 4 times a week. And the unwritten guideline is that only drinkers will be considered for promotion.
Actually, it is not true.
The managers and their managers will promote anyone who does good work. And good work is when you do things they tell you to, the way they tell you, have initiative and drive, and bring good results. Not all of us are talented enough to know what initiatives are good, and what are a waste of time. Some efforts that bring results are seen to be unnecessary because the results are irrelevant, other efforts are seen to have failed, or have brought about bad side-effects. Besides, good results are results that the managers want, not necessarily good for the company.
So a good way to find out is to seek advice, or if you are lucky and well-liked, the managers will give unsolicited advice to you on how to (and they may even help you) get the results. And to be well-liked, you need to know them after-hours, and to be lucky, you have to spend more time with them. So you will get tips, and warnings, and advice and help, over a glass of beer, whisky, brandy, vodka, etc. Since the group deciding on promotions are drinkers, they will only know you well if you drink with them.
And then he got himself promoted. He thought that once he becomes a manager, he doesnt have to join the drinkers anymore, or at least, water it down to once a week. But it wasnt to be. The managers and their senior managers have an unwritten rule. Since the company allows entertainment claims, the managers passes on the drinking expenses to the company. (Initially, the owner was aware and allowed this minor "abuse" for his own reasons, which if you think carefully, you will also let it be as long as it remained reasonable.)
And the managers are not stupid. Knowing very well that if one submits entertainment claims 20 times a month for his 5 customers, questions will be raised. So they cooperate and coordinate. I claim Monday, you Tuesday, he Wednesday, so-and-so Thursday and someoneelse Friday. Switch places next week. Sometimes the client is even there.Now that he is a manager, he has to be part of the group. Else he is seen to be unreliable, untrustworthy, and there is constant fear that the group may be exposed by him.
When he reduced his drinking sessions, the other managers (who supported and promoted him previously) constantly complained about him, that he is difficult to work with, has altitude problems, etc. Bad enough that the senior managers had to have a chat with him about this. So he returned to the frequent drinking. And all these complaints vanished when he re-joined the group 4 times a week.
Because of his efficiency and effectiveness at work and reputation among his peers, the senior managers soon spotted the rising star and took him under their wings. Less bars and pubs with the managers, and more golf-courses and karaokes with the bosses. And the senior managers too, have a similar practice, including using each other as alibis, as well as approving each other's claims.
As the results of the company suffer (afterall, promotions were based on drinking time and not profitability), and grew fatter (while the revenues and profits drop, the managers demand more staff and more managers were needed in order to service the clients to maintain revenues and profits). Seeing that this continuous trend of small losses may be getting out of hand, the owner hired a CEO.
To gain acceptance to the existing management, the CEO, (well, what else could he do?) join the managers and senior managers in the drinks and karaokes. He soon found that his suggestions made in the pubs and karoakes worked better than those in the boardroom. Soon, the CEO became part of the gang.
The owner gave up and decided to sell off the company. And the new owner immediately replaced the CEO. This new CEO was very strict, and the claims were questioned, many were rejected, time spent was monitored carefully, but the business became terrible. Deliveries became very late, collections even later, loyal customers stopped buying, payments were overdue, suppliers raised prices and demanded cash on delivery. The owners sensed that the CEO messed up the company, fired him in anger, without a ready replacement.
Surprisingly, while the owner search for a new CEO, the company started improving and things were getting back to normal (a small loss every month). So the owner decided not to have a CEO (and save some money), and hey, everything went back to normal. The previous CEO really did a bad job was his conclusion.
And so the company went on, losing a bit of money every month, and the owner had to put in some money every month to cover the deficit. Until one day, the owner just gave up and shut it down.
That's how organisations collapse, slowly, slowly, slowly, and then very fast. From our perspective, it takes almost 12 hours for the Sun to move from the east to the west. When the bottom part of the Sun touches the horizon, it will be a mere 2 minutes before it disappears. Slowly, slowly, slowly, then very fast.
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Does this apply to an organisation you know, be it a company, a club, a group of friends, a family or a country? Replace drinking to other vices such as sex, drugs, money or corruption, and you may see it around you. Are we part of a system perpetuating a practice in order to protect system?
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What about practices that are "acceptable"? Replace drinking with a particular management belief or culture. Some companies want control over everything, and only people who prove themselves as controllers will be promoted, some view increasing revenues as the priority, yet others value creativity, customer services, etc. Are these any better than the drinking gang?
How about personal practices such as "keeping up with the Joneses" on house, cars, parties, children's abilities, hobbies, sports, and so on?
Are there similar concepts applied to a country? If so, why are they good or bad?
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What if the owner can not shutdown the operation? You cant really shutdown a family, or a country. Can you replace everyone? with people who have no experience with your clients or products? with people who know little about running a company or country?
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What if the practice extends beyond the borders of a company or country? Friends from different companies can "work" together to get themselves entertained at the costs of their companies. How much can it go sideways along the supply chain?
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How high up can it go? What are the motivations to support such practices at the higher levels of CxOs and owners? Fear, greed, lust, ego, power?
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What do we change? What do we change it to?
