Organisational incompetence was defined in the 1990:s by J. Steven Ott and Jay M. Shafritz an inability of an organisation to learn from its success, failures, or its environment (see https://www.jstor.org/stable/977385). Predating that in the 1980:s Chris Argyris used the term skilled incompetence to describe something related, where the repeated use of a behaviour results in unintended consequences as described in an HBR article (https://hbr.org/1986/09/skilled-incompetence).
Today we still see a lack of critical thinking when applying best practices, rules and procedures. Although best practices has a valid application when dealing with clear or obvious problems there is an inability of organisation to limit the applicability of the practice. In dealing with complicated problems the use of a best practice can be questionable. With what certainty can anybody say that the practice is the best possible? In the complex domain, where the cause and effect can only be seen in retrospect, the use of anything like a best practice is going to produce a suboptimal result. The same goes for problems in the complex and disordered domain as the result of an intervention may be all over the place.
Most organisations fail to recognize this limitation to best practises. In stead organisations reward and promote individuals following the rules, applying the best practices and who does not criticise the entrenched behaviour. Individuals also them self opt for this behaviour, as it is risk free, comfortable and does not need any extra effort. As a result organisations are likely to end up with managers having limited skills in critical thinking. What is worse is that this can be a negative spiral and the situation become worse over time.
Mostly the result of any organisational incompetence is just waste of time, money and effort that can be considered as normal. On a society level this waste amounts to astronomical amounts, but to the individual organisations it is just the cost of doing business. Some times things do blow up, as exemplified by huge overruns in terms of cost or schedule. The outcome may also be dysfunction in what the organisation produce. There is also risk for organisations being affected by organisational incompetence that is worth noting. Organisations may end up living in a dream world where all is well according to the norms, but in reality they are headed for disaster that they fail to see. Required business transformation may also fail as a result of the inertia existing norms.
To solve the problem a first step should be to recognize there is a problem. Many people are highlighting that there is new thinking required but few listen. Organisations also must ensure that any issues can be brought forward without risk of repercussion. Psychological safety is a crucial a precondition. Once the problem is recognised and safety is ensured, a sense of curiosity towards all existing practises should be encouraged. According to my understanding this is what Toyota does with its philosophy around the use of the andon cord. The leadership of an organisation finally need to make sure to enable change. More diversity in leadership is one thing that may help. The diversity should also include diversity of thought in addition to what is traditionally considered in diversity. Traditional MBA and other management training does not seem to produce any favourable outcome in this respect.
As people slowly are starting to recognize the problem also the media is starting to apply pressure towards organisations affected by organisational incompetence. The recent episode of Dystopia from Swedish Radio (https://sr.se/avsnitt/1742863 in Swedish) highlights this in an excellent way that i would recommend anyone with a basic understanding of Swedish to listen to...
