Warning Flags: Signals That Reveal the Health of Your Organization

My daughter and wife recently spent the day at a New Jersey beach, a common occurrence for those living in the Northeast. My daughter said the lifeguards were flying the red flags, meaning high hazard and rough conditions. This flag system is used by the United States Lifesaving Association (USLA) and is an important part of the effort to keep people safe while in the ocean.

That got me thinking – what if every organization was required to display a flag to notify employees, job candidates, and customers about the conditions of the business, nonprofit, or church? The flags used by the USLA are for our good and reveal what is not always seen by the less-trained eye, and an organization’s flags could do the same. Here are 5 flags, what each of them may mean for an organization’s health, and what should do about it. As you read, consider which flag your employees would assign to your organization.

Green 🟩

Some beaches use a green flag to describe mild conditions. While the USLA chose not to adopt the green flag because there are always potential risks and hazards, we will use the green flag to describe favorable conditions of an organization. Green flag conditions within an organization may include a number of these signs:

1. The organization attracts and retains exceptionally talented people.

2. Positive chatter and laughter are regularly heard.

3. The owners, supervisors, and managers are trusted and respected.

4. Growth opportunities for staff are both encouraged and provided.

5. There is ongoing and transparent communication between management and staff.

6. The organization is profitable and uses its money wisely.

Action Step: If your organization has a green flag, guard against the temptation to think that it will always be this way. Continually work to listen and grow the culture and strengths of your organization.

Yellow 🟨

The yellow flag signals medium hazard, meaning there are some risks present. While it is awesome to experience a green flag as an organization, it is highly uncommon for any organization to truthfully fly it at all times. Just like the ocean, conditions often change resulting in newly emerging challenges and risks. Yellow flag conditions within an organization may include:

1. There is a growing level of discouragement and dissatisfaction among employees.

2. There is declining trust and confidence in the leadership.

3. Employee engagement and morale are slowly declining.

4. The focus on positive customer experience is weakening.

5. Leadership’s tolerance of unhealthy behavior is demoralizing the higher performers.

6. The organization is beginning to lose a few highly talented and motivated team members.

 Action Step: If your organization has a yellow flag, it is time to pay attention and take action. This could include a culture assessment to discover what is contributing to the yellow flag warning as well as a team retreat to focus on team health, trust, and transparent communication.

Red 🟥

The red flag describes high-risk conditions. A beachgoer hates to see that flag but is wise to heed the serious nature of the threat. A red flag may not mean “closed,” but it is a serious warning that hazard conditions are present and extreme care must be taken. Red flag conditions within an organization may include:

1. Employee morale is so low that it can be felt even without words.

2. Financial health is declining, signaled by salary freezes and benefits cuts.

3. Toxic behaviors from leaders are rising including anger, deception, and manipulation.

4. There is a decreasing investment in the people, technology, and facilities.

5. Compelling communication of vision and creative innovation is declining.

6. Organizational rules and bureaucracy are quenching innovation and timely execution.

Action Step: A red flag is a serious warning that you are facing danger which could include losing top talent, lawsuits, and harm to your organization’s reputation. If you have a red flag flying, bring in expert guidance to help you diagnose and begin to make the appropriate corrections.

Red & White 🟥⬜

The red and white flag means emergency evacuation, the beach is closed, and you need to get to a safer place. When you see one of these, you know that the risks are about as high as they can get, and it’s definitely not the day to risk going in the water, let alone staying near the water. Red and white conditions within an organization may include:

1. Leadership is conducting business in illegal ways or tolerating it from others.

2. The emotional and/or physical health of employees is unacceptable.

3. The reputation of the business is damaged beyond what can likely be repaired.

4. The products and/or services are no longer in demand due to cultural changes.

5. The values of the organization are in serious conflict with your personal values.

6. The majority of employees have lost trust and confidence in the leadership.

Action Step: If you have a red and white flag at your organization, you may be facing serious risk of organizational damage, decline, and increased risks of lawsuits. Organizations with a red and white flag can seldom successfully address the dangers and reverse the crisis on their own. GET PROFESSIONAL HELP!

Purple 🟪

Ever wonder what critters might be swimming next to you in the ocean? Well, if you see a purple fag, you know that something you may not like is nearby. While it doesn’t include sharks (that would likely mean a red flag or the beach is closed), it does mean you may be in the company of things like jellyfish or stingrays. Purple conditions in an organization may include the presence of:

1. A leader or manager who regularly shows narcissistic self-serving behavior

2. A socially clueless leader or manager who is seriously tone deaf

3. A leader or manager who is a control freak, always hovering over your shoulder

4. A lazy, unmotivated leader or manager

5. A manager who is consistently abusing his or her power

6. A manager or coworker who is manifesting unhealthy behavior towards you or others

Action Step: If you have been hearing the warnings of a toxic leader who is pushing others down and driving talent away from your organization, you are facing a purple flag. Sharks may be fun to watch on Shark Tank but in real-life organizations, these predators only cause damage and destruction. You may need advice and intervention from an organizational consultant who specializes in such complex toxic environments, and it is likely that you will need legal advice as well.

So, which flag would your employees assign to your organization? If you would like help assessing the state of your organization or you would like assistance in restoring it to a green flag, contact us to speak with one of our experienced consultants.

Jay Desko is the President & CEO of The Center Consulting Group and brings experience in the areas of organizational assessment, leadership coaching, decision-making, and strategic questioning. Jay’s degrees include an M.Ed. in Instructional Systems Design from Pennsylvania State University and a Ph.D. in Organizational Behavior and Leadership from The Union Institute.