Organizational trauma is an event experienced as traumatic by members of an organization. An event that is etched in the employees conscious and unconscious memory and affects their feelings, relationships and organizational conduct, culminating in loss of profitability. The impact of organizational trauma continues to affect future generations of employees consciously or unconsciously.
Examples of situations where an event can be experienced as organizational trauma: mergers & acquisitions, a failed flagship project, layoffs of significant figures or a significant number of employees and more.
These events produce pathological symptoms such as recurrence of the traumatic dynamics that create more crises and hidden identification or loyalty with those who suffered, for example:
– A CEO who has replaced a difficult CEO. The new CEO, despite all his efforts, fails to generate loyalty amongst his employees and appreciation among his customers. They continue to respond to him as if he is his predecessor.
– Employees were fired, their friends who remained in the organization stay loyal to them, feeling angry and confused. The organization will find it difficult to motivate them into moving forward.
– Sometimes the reason for starting a business is born out of trauma, like an organization founded after a loss: a startup looking for a solution to lung cancer after the entrepreneur’s mother died of it, an association that handles road accidents because the founder’s son was killed and such.
Therefore, when we come to look at an organizational issue, we often look at the past as well, to identify the events and people that are still influencing the organization today.
We will look for events in the past that have not been processed appropriately, that have not been communicated in the right way or that may have an aroma of an untold secret. It could be something that happened quickly and surprisingly, it could be external factors like a war, an epidemic or an economic crisis, and it could be a relationships issue for example : Traumatic relationships between the CEO and the founder, in senior management or between the organization’s veterans and its leaders.
When we find the source of the organizational trauma we can work with it and find the right way to resolve the current challenges that now we know that were affected by this historical trauma.