In a recent Harvard Business Review (HBR) article the three authors (Neilson, Pasternack, and Van Nuys) described what they called the “Passive-Aggressive Organization.” While we are all familiar with the concept of the passive-aggressive individual, what the authors described in the article does not qualify as passive-aggressive.

Even though I disagree with their passive-aggressive designation, the three authors point out a very serious organizational problem. They describe an organization where conflict is rare, consensus is easy to reach, and problems are graciously overlooked (a “happy” place).

What the authors describe is what I call a “Passive, Inwardly Focused” organization. It’s a serious diagnosis because this type of organization does not have long to live. This organization will soon lose any hope of responding quickly to market changes. They typically remain passive and inwardly focused until they are near death. But as you can imagine, they don’t die happy.

Of course, it is important for organizational members to treat each other in a respectful way, but professionalism also requires the “backbone” to take a stand. In fact, I have been called into several organizations that claimed to have a conflict problem. After data gathering and diagnosis, I told the senior executives that their problem was that they did not have enough conflict. They needed to stir up some debate!

Living in a “happy world” is appropriate for children and smurfs. But, a highly effective organization requires healthy disagreement. Passively accepting the status quo leads to complacency. Questioning the status quo leads to innovation.

Of course, concern for the preferences and work habits of employees has its place, but it must be balanced with the demands of the marketplace. Ultimately, satisfied customers are more important than satisfied employees. If customers are not satisfied, eventually employees will be very unsatisfied. They will be out of work!

In passive, inwardly focused organizations several things can be done. First, match incentives to performance. Second, recognize doers, not “good ole boys (or girls).” Third, establish quantifiable goals. Fourth, bring in outsiders who can shake up the status quo. Fifth, invite (or demand) debate in meetings. Sixth, actively solicit customer complaints and concerns.

It is only a matter of time before passive, inwardly focused organizations experience financial distress. Don’t wait, act now!

Is your organizations “happy” but not productive?

Dr. Mike Beitler is the author of "Strategic Organizational Change." Read 2 free chapters of the book online at http://www.strategic-organizational-change.com.

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