The High Cost of Office Politics

Politics is expensive. Just through late October, the top two candidates spent close to $2 billion vying for that fancy oval office and comfy bed on Air Force One. A report Wednesday stated that between the two candidates, they spent $1 billion on TV ads alone.

But let’s talk about the cost of another type of politics. If you’re like me, you’re probably campaign-weary too. My favorite Tweet from Election Day was by Larry Sabato, the Director of the University of Virginia Center for Politics. “Some call it Election Day. I call it Negative Ad Liberation Day.”

NASA managers knew there were issues with the O-rings on the Challenger and had been warned by engineers that it was too cold for the launch. But the organizational culture was such that people were scared to report the problems. It was launched on January 28, 1986 and broke apart 73 seconds later with six astronauts and a school teacher on board.

I want to talk about office politics. I don’t care whether you’re involved in your church’s flower guild, your condo association or a multi-million dollar company — every organization has politics. You’ve heard the definition of a dysfunctional family, right? One that has more than one member. Pretty much can be said of a group that has to deal with politics.

Everyone has an agenda. Fred in accounting may be sucking up to the boss, hoping for a promotion while Sue tries to avoid any type of controversy and sticks to her cubicle. I’m not concerned here with these type behaviors.

I’m talking about what takes place at the senior level, where playing politics can have the most devastating and costly consequences, even to the point that senior level managers can paralyze the operations of a company. Or worse.

I once worked with a large company where the directors were in a dispute over the direction of the company. Some old directors wanted to continue in the manufacturing business, believing they could salvage some of the company’s remaining resources, while others wanted to morph into a licensing company and focus resources on what they saw as a more promising path.

The problem was that the transition to a licensing company had already begun and the politics among these officers resulted in a six-month loss of time — not to mention millions of dollars — before the company pulled together on the project that would save them.

I’m not saying disagreement among managers is a bad thing. It can be a healthy way to flesh out the best ideas. Problems arise when one person or a group of people tries to undermine the process of normal negotiations and discussions by currying the favor of senior management or board members, and skew assumptions and strategies towards their desired outcomes. I’ve seen numerous companies disintegrate for these reasons.

The problem with politics is that not everyone has the best interests of the company in mind.

Let me give you a more deadly example. After the space shuttle Challenger explosion in 1986, Ronald Reagan formed the Rogers Commission to investigate what happened. Their findings were chilling.

NASA managers knew that there was a potentially catastrophic flaw in the O-rings and had known it for years, but NASA’s organizational culture was such that the people working closely on the project were too scared to bring it up.

Managers also disregarded warnings from engineers about launching in the low temperatures that morning, fearful that a delay might hurt the image of the space program. Seven people died as a result.

One of the largest barriers created by politics is that the CEO is unable to get the right answers and information he needs quickly enough to act, particularly during a crisis.

Another problem with an overly politicized office is that morale among employees is generally low and productivity is lowered. And unhappy employees have a harder time doing their jobs. Gallup reported that lost productivity due to employee disengagement costs more than $300 billion in the U.S. annually.

What is office politics costing your company?

Tune in for the next post when I address what you can do about office politics.