It is unusual for a company to fail due to a single bad decision. More often, they fail because small compromises become accepted practice. An unresolved client complaint becomes "an isolated incident”. A missed deadline becomes "understandable”. Individually, these moments seem insignificant. Together, they reshape how a company operates. Organisational drift begins in this way - by gradual normalisation of decisions that were once viewed as unacceptable versus dramatic failures.

This article examines how organisational drift develops through the gradual normalisation of small compromises, why strong performance often conceals weakening standards, and why leadership must continually challenge accepted behaviours to prevent gradual decline from becoming the institution's culture.

Drift begins quietly

The danger is that organisational drift is difficult to recognise from inside the company. When viewed separately, each compromise appears reasonable. Managing competing priorities, responding to commercial pressures and working with limited resources are all challenges faced by leaders. The immediate decision often makes sense. However, the cumulative effect may not.

Over time, standards shift without anyone consciously deciding they should. In her analysis of the Challenger space shuttle disaster, sociologist Diane Vaughan described this phenomenon as the "normalisation of deviance". Her research demonstrated how repeated acceptance of small departures from established standards gradually changed what decision-makers considered acceptable. What began as isolated exceptions eventually became routine. There are many applications of this principle beyond aerospace. Every company develops informal operating norms. The question is whether those norms strengthen performance or quietly weaken it.

Performance hides weakness

Financial results do not always reflect corporate drift. A client issue that should trigger immediate escalation is handled through e-mail because "that is faster”. A policy exception is approved because "we know the customer”. Performance concerns remain unaddressed because "the team is already under pressure”. None of these decisions appears significant on its own. Collectively, they redefine the company’s tolerance for risk, accountability and execution.

It can be even harder to detect this if you are successful. Revenue continues to grow. Clients remain loyal. Targets are achieved. By looking at those outcomes, it appears that existing practices are working. The reality is that strong performance can conceal a weakening of operational discipline.

McKinsey & Company's ‘State of Organisations 2023’ research found that companies sustaining long-term performance consistently challenge existing assumptions, review operating practices and address emerging weaknesses before they become structural problems. Sustainable success is rarely the result of maintaining the status quo. It comes from questioning it.

Leadership shapes the outcome

This places an important responsibility on leadership. Leaders often ask whether the company is performing well. A more revealing question is whether today's accepted behaviours would have been accepted two years ago. The answer often reveals far more than a dashboard ever could.

Governance, strategy and culture are frequently discussed as separate disciplines. In practice, they are connected by one common factor - the behaviours that leaders repeatedly accept. Every tolerated short-cut, every unresolved issue and every deferred conversation gradually shapes the company that follows.

In short, organisational drift is therefore not inevitable. It is the cumulative outcome of decisions leaders stop questioning. Strong companies recognise this. They understand that maintaining high standards requires more than monitoring results. It requires the discipline to challenge what is gradually becoming normal before "normal" becomes the company’s greatest risk.

• NB: About Derek Smith Jr

Derek Smith Jr has been a governance, risk and compliance professional for more than 20 years with a leadership, innovation and mentorship record. He is the author of ‘The Compliance Blueprint’. Mr Smith is a certified anti-money laundering specialist (CAMS) and holds multiple governance credentials. He can be contacted at hello@pineapplebusinessconsultancy.com