A “zombie” company is one that ignores negative trends and focuses only on positive elements, leading to financial instability and potential bankruptcy. To reverse this trend, companies should assess their organizational structure and culture and make necessary changes. A balanced approach is key to bringing the company back to healthy functionality.
When used in the business world, zombie is a designation for a company that refuses to be honest about the current status of the corporation. Instead, all attention is focused on any positive elements within the company, while the liabilities receive little or no attention. When this kind of mindset persists, it is not uncommon for the company to become financially unstable, become an unwilling participant in an attempted takeover or merger, or even go bankrupt.
Some companies earn the designation of being a zombie business simply by choosing to ignore any type of negative trend or practice that has developed within the corporate culture or the general public’s perception of the corporation. Often the idea is that if the positive is accentuated, the negative aspects will begin to correct themselves, of course. Unfortunately, zombies don’t heal. Instead, a company operating with this level of self-deception is likely to become an insolvent company with a high risk of closure. If steps are not taken to reverse the trend, there will also be a strong shift from becoming a bankrupt company or being absorbed into another entity.
Failing companies can take steps to move away from a zombie mentality and get back on track. The first step is to carry out a comprehensive assessment of the company. This is basically a three step process. First, company employees should be given a chance to voice their opinions on what is holding the company back. Next, an outside firm should be hired to assess the company’s organizational structure and corporate culture. Ultimately, the conclusions of these two surveys must be taken seriously and changes developed and implemented while there is still time.
Zombie businesses don’t have to end up as bankrupt companies or get lost in a buyout or merger. The key to success is creating a more balanced approach that respects all of the company’s positive attributes while dealing with the negatives in a timely manner. When the company stops avoiding difficult problems and decides to face them head on, it is possible to bring the zombie back to a full level of healthy functionality.
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