The Broken Window in Your Organisation

The Broken Window Theory is often used as a business metaphor, but its consequences are very real.

The theory says that when small signs of neglect go unaddressed, they signal that bigger problems are acceptable too. I've watched this happen inside finance teams more than once. A reconciliation left "pending" for one more month. A control override that was meant to be a one-time exception, three quarters ago. Nobody decided to lower the standard — it just quietly stopped being enforced, and everyone adjusted to the new normal without saying so out loud.

Individually, these look like nothing. Collectively, they define what a team actually believes is acceptable — regardless of what the policy document says. People read what leaders tolerate far faster than they read what leaders write.

When small issues become normal, standards erode, accountability weakens, and the bigger failure — the one that ends up in a board meeting — was usually visible months earlier, in a much smaller form.

If you think leadership is only about solving the big problems, think again! Leadership is also about noticing the small ones before they become, over time,  "how we do things here."

If you're unsure, ask: "What's the broken window in our organisation that everyone sees, but no one owns?"