The document discusses organizational decline and identity. It proposes a 5R model for organizational turnaround during decline. The model involves five social processes related to organizational identity: retiring attributes adverse to recovery; reclaiming forgotten attributes vital to recovery; reaffirming active attributes vital for recovery; regenerating atrophied but important attributes; and reimagining the identity for new opportunities. These processes help align organizational identity with what is needed for success during decline.

1. “Effectively navigating decline can unleash within organizations the ability to adapt and renew.
Organizations that fail to respond appropriately to decline may end up in complete failure.”
By Sam Rockwell
Supporting Organizational
Turnaround Through
Identity Work
Although researchers and even
practitioners demonstrate a bias in their
work toward organizational growth,
decline is actually a natural part of the
organizational lifecycle (Serra, Ferreira, &
Ribeiro de Almeida, 2013). When decline
naturally happens, however, organizational
insiders and outsiders consciously
and subconsciously form self-fulfilling
prophecies about what the organization
is and what it is becoming, and these
predictions inadvertently precipitate further
decline and organizational death (Edwards,
McKinley, & Moon, 2002).
In this article, I discuss organizational
decline and what happens to organizational
identity (“who” the organization is) during
times of decline. I also propose a five-part
model to spark organizational turnaround
rather than precipitate further decline.
Organizational Decline
Organizational lifecycle models have four
stages: birth, growth, maturity, and decline.
Sometimes, these also include a renewal
or turnaround stage (Kimberly & Miles,
1980). Effectively navigating decline can
unleash within organizations the ability to
adapt and renew. Organizations that fail to
respond appropriately to decline may end
up in complete failure.
Although ample statistics and
research suggest that small companies
are particularly susceptible to decline
and failure, well-known and reputable
corporations also go through this
natural stage in the lifecycle. As a result,
organization development practitioners
and consultants need to understand this
phase, what causes it, what results from it,
and how organizations can be supported
in emerging from it. Understanding how
to navigate and emerge from decline is an
important topic, as it has received relatively
little research attention. Serra et al.’s (2013)
examination of research on the topic of
decline revealed that of the 18 journals they
considered, a total of 31,218 articles were
published, and only 104 (0.33%) of which
discussed organizational decline. Moreover,
attention to the topic appeared to largely
stop in the 1990s.
Definition
Organizational decline refers to an
involuntary, steady, and significant
decrease in the organization’s resource
base over at least two years (Robbins &
Pearce, 1992). Decline does not happen
all at once; in fact, it often begins several
years before visible signs of failure actually
emerge (Hambrick & D’Aveni, 1988).
Then, even when the first signs become
evident, managers often ignore, hide,
or fail to respond in a helpful way to it.
Decline is not the same as “organizational
death,” where the organization can no
longer perform its functions and ceases to
exist (Sheppard, 1994); however, decline
does typically involve stagnation or cutback;
reduction in headcount, performance, and
resource base; and misalignment with its
environment (Cameron, Kim, & Whetten,
1987; Greenhalgh, 1983).
32 OD PRACTITIONER Vol.48 No.1 2016

2. Causes
Four conditions have been researched for
their role in precipitating organizational
decline. One condition concerns the
organization’s environment, including
increasing global competition, shrinking
customer base, and deregulation
(Cameron, Sutton, & Whetten, 1988).
Another condition concern
factors within the organization itself,
such as lacking internal efficiency
(Greenhalgh, 1983); being too new to
have the capabilities to survive the natural
turbulence of doing business (Baum
& Shipilov, 2006); and being too small
to have needed resources and capital
(Venkataraman & Low, 1994). Firms that
cannot get, keep, or leverage the resources
they need to create and sustain competitive
advantage also are susceptible to decline
(Kraaijenbrink, Spender, & Groen, 2010).
A third condition is failing to properly
respond to changes in the industry or
environment (e.g., Cameron et al., 1988).
This could occur in the form of failing
to keep pace with rapid technological
innovations in its industry (Hambrick &
D’Aveni, 1988), becoming too committed
to its own way of doing things as a result of
past successes (Becker, 2008), or lacking
organizational variety and neglecting
innovation (Mone, McKinley, & Barker,
1998).
Yet another cause of decline consists of
organization members’ and stakeholders’
self-fulfilling prophecies of failure that
predict and precipitate decline, even if the
predictions start out as false (Edwards et
al., 2002). For example, managers fearing
their organization is in decline may stop
hiring, put important projects on hold, and
cut staff and budgets, which only hampers
the organization’s capabilities and prevents
recovery (Wernerfelt, 1984). Stakeholders,
fearing an organization is declining,
may tighten payment deadlines, reduce
credit lines, or restrict business, placing
the potentially faltering organization
into a sure and steady state of decline.
Such predictions and behaviors can turn
speculation into unavoidable reality.
Furthermore, once one internal or external
constituent predicts and begins enacting
an organization’s decline, a contagion
effect occurs wherein enactment of the
decline becomes a group phenomenon,
thus assuring the eventual demise of the
organization (Edwards et al., 2002).
Outcomes
Opinions vary about what happens to an
organization once in decline. Although
some researchers argue that organizational
decline triggers adaptation and innovation,
others counter that declining organizations
generally falter when it comes to successful
adaptation and innovation (McKinley,
Latham, & Braun, 2014). Edwards et al.
(2002) research, for example, suggested
that although managers mean well, often
their efforts to increase efficiency and
accountability while reducing costs only
make matters worse.
It is important to underscore
that organizational decline does not
necessitate the ultimate stagnation or
death of the organization (Miller &
Friesen, 1984). However, the fate of the
organization depends heavily upon the
perceptions, interpretations, and efforts of
organization members and stakeholders.
The next section discusses the concept of
organizational identity and what role it
plays during times of decline.
Organizational Identity
Organizational identity refers to “who” we
are as an organization. This idea of who
we are is reflected in identity claims about
what is central, distinctive, and enduring
about the organization (van Rekom, Corley,
& Ravasi, 2008).
Organizational identity plays an
important role in the firm’s survival and
performance, as a compelling identity
can help attract the participation, support,
and loyalty of organization members,
stakeholders, and other constituents
(Ashforth & Mael, 1989), and increase the
organization’s access to resources (Pfeffer
& Salancik, 1978). Moreover, threats to the
organization’s identity can compromise its
legitimacy, in turn, placing at risk its access
to capital, human, and other resources and
advantages. It follows that organizations
have a strategic interest in establishing
and maintaining a positive identity its
important stakeholders agree on.
Creating and Sustaining
Organizational Identity
Four forces within the organization serve
to assert and negotiate the identity of the
organization:
1. Identity claims communicated
by organizational leadership and
management in an effort to shape
organizational members’ conceptions
of what is central, enduring, and
distinctive to the organization (Whetten
& Mackey, 2002).
2. Sensemaking interactions and
interpretations of organization
members and stakeholders
(Cornelissen, 2006). Collectively,
these shared understandings form
broad agreements about “who” the
organization is and what qualities are
core, distinctive, and enduring. These
understandings become self-reinforcing
because they continue to shape
successive perceptions, behaviors, and
experiences.
3. Language, in the form of metaphors,
storytelling, categorizations, labels and
names, and power and political plays
(Ran & Duimering, 2007). This process
Stakeholders, fearing an organization is declining, may tighten
payment deadlines, reduce credit lines, or restrict business,
placing the potentially faltering organization into a sure and
steady state of decline. Such predictions and behaviors can turn
speculation into unavoidable reality.
33Supporting Organizational Turnaround Through Identity Work

3. involves ongoing narration that creates,
adjusts, affirms, and rejects various
interpretations.
4. Bodily experiences in and of the
organization (e.g., the organization’s
surrounding external environment,
its furnishings and decor, office
ambiance) that provide conscious
and subconscious cues about the
organization. Harquail and King (2010)
referred to this stream of information
as organization members’ embodied
cognition.
These four forces reflect different
perspectives about how organizational
identity is formed and sustained. Together,
these perspectives reveal the multifaceted
way that this phenomenon is discovered or
created, understood, and propagated across
members. Hatch and Schultz (2008) added
that organizational identity is dynamic
rather than static, in that stakeholders
constantly reassess and reconstruct the
characteristics of an organization. This
begs the question of what happens when
an organization is in decline and, specific
to this article, how consultants might help
organization leaders and members leverage
identity and the social processes underlying
it to move through decline and on to
organizational turnaround.
Social Processes Surrounding Identity
During Organizational Decline
Although organizational identity endeavors
to indicate what is core, distinctive,
and enduring about the organization,
organization identity is actually quite
responsive to environmental changes
(Gioia, Schultz, & Corley, 2000). Managers’
impressions and consequent identity
claims regarding the organization may
shift with changes in the firm and its
environment. Internal and external
changes (especially those that threaten
an organization’s identity) prompt
sensemaking activities by organizational
members, potentially leading to revised
understandings of the organization.
Dutton and Dukerich’s (1991) discussion
of external changes affecting the Port
Authority of New York and New Jersey
showed how employees’ perceptions
of their organization’s identity were
challenged as a result of external shifts
such as infrastructure and legislative
changes that led to increasing numbers
of homeless individuals living and
spending time at New York and New Jersey
transportation facilities. As this issue
grew, organization members were forced
to reconsider their ideas. According to
their accounts, members’ interpretations
of homelessness shifted from it being an
issue for police to resolve (1982–1984)
to it being a corporate issue but outside
its domain of operations (1985–1986), to
it being a business problem requiring a
moral solution (1987), to it being a regional
issue that no one else will solve (1988), to
it being one of many regional issues and
that homeless individuals need advocates.
This evolution of thought was accompanied
by shifts in behaviors from denying
and containing the issue by moving the
homeless out of transportation facilities
(1982–1986) to building drop-in centers
for homeless individuals and seeking social
service partners to aid in this social cause
(1987–1989).
Furthermore, as organization
members’ ideas about and behaviors
shift, the metaphors, stories, and other
language used by leaders, members,
and stakeholders about the organization
also shift (Cornelissen, 2006). The Port
Authority case additionally demonstrates
how identity change and threats can
alter members’ bodily experiences of
the organization (Harquail & King,
2010). The resulting perceptions and
behaviors, whether precipitated by leaders’
identity claims, members’ sensemaking,
languaging, or embodied cognition, can
exacerbate and accelerate decline or,
in contrast, support the organization’s
turnaround (Edwards et al., 2002).
It is critical to raise conscious
awareness of these self-fulfilling prophecies
and to realize that alternate possibilities
are also within reach. The next section
presents a model of identity-related social
processes and how these may be leveraged
to support organizational turnaround.
A Model of Identity-Related Social
Processes During Decline
When organizations are in a state of
decline, the threats to organization survival
and identity can trigger behaviors that
spawn desperation and even chaos. As
identities tend to adapt quickly in concert
with environmental changes (Gioia et
al., 2000), the organization can quickly
lose sight of who it is in the midst of the
associated turbulence.
I argue that avoiding the self-
fulfilling prophecy of decline requires
concerted attention to the organization’s
identity. Sveningsson and Alvesson
(2003) defined identity work as “people
being engaged in forming, repairing,
maintaining, strengthening, or revising the
constructions that are productive of a sense
of coherence and distinctiveness” (p. 1165).
Organization consultants can play a pivotal
role in helping organization members
embark on this identity work in service of
recovering the organization and moving
into turnaround.
The 5R Model
In times of decline and threat, core identity
attributes are subject to varying levels of
In times of decline and threat, core identity attributes are
subject to varying levels of reinforcement and attention.
Over time, some attributes atrophy and diminish in strength,
while others remain strong and active in members’ thoughts
and behaviors. I refer to this concept as Attribute Strength. It
follows that it will take varying amounts of effort to align these
core attributes with a revisited or revised identity.
OD PRACTITIONER Vol.48 No. 1 201634

4. reinforcement and attention. Over time,
some attributes atrophy and diminish in
strength, while others remain strong and
active in members’ thoughts and behaviors.
I refer to this concept as Attribute Strength.
It follows that it will take varying amounts
of effort to align these core attributes with a
revisited or revised identity. For example,
a profoundly atrophied but critical attribute
may require substantial effort to rebuild
and sustain; whereas a strong and active
attribute may require relatively little effort
to sustain because members are already
fully enacting it. At the same time, a deeply
entrenched attribute that undermines
ongoing success may require significant
effort to unlearn, whereas an already
atrophied attribute may require little effort
to erase from the organization’s identity.
I refer to this concept as Alignment Effort
Needed, in other words, how much effort is
required to bring the collection of identity
attributes (where some are atrophied and
some are strong) into alignment with the
identity needed for success.
These two axes—Attribute Strength
and Alignment Effort Needed—lead to
five social processes members engage in
related to organizational identity in times
of organizational decline and recovery. I
call these processes retiring, reclaiming,
reaffirming, regenerating, and reimagining
(see Figure 1). Each process involves a
different set of interpretations and actions
regarding the organization’s identity traits.
In retiring, identity claims and
attributes that are active, conscious, but
adverse to recovery are released from
the organization’s identity. Retiring
often requires a great deal of unlearning
(Nystrom & Starbuck, 1984). For example,
Blockbuster’s demise in 2010 may have
been avoided by retiring its primary focus
on brick-and-mortar traditional DVD and
video rentals in favor of stronger focus on
alternative rental models and emerging
technologies such as streaming on demand
videos (Satell, 2014).
In reclaiming, organizational traits
vital to recovery but which have been
forgotten or abandoned by organization
members are recalled, restated, and carried
forward in an unchanged manner. For
example, in Rockwell’s (2013) study of
468 active, licensed ministers’ support and
identification with core identity attributes
of the Foursquare Church revealed only
moderate support for a formerly central
identity claim of including ethnicities and
diverse cultures. Organizational leaders
may reclaim this attribute through pastoral
education and other efforts to amplify this
attribute within its local churches. In fact,
the Foursquare Church recently instituted
a new Hispanic district and has started
many new non-white ethnic churches.
In reaffirming, active and conscious
organizational traits that remain vital
for the organization are reasserted
and carried forward in an unchanged
manner. For example, over 2008 and
2009, Pennsylvania Governor Rendell
dramatically cut the budget of Pennsylvania
State University and other state-related
universities and removed them from the
State Fiscal Stabilization Fund, making
the bold identity claim that these schools
were nonpublic universities because they
“were not under the absolute control of
the Commonwealth” (Rendell, 2009,
p. 14). This externally initiated identity
threat triggered substantial identity
reconsideration and renegotiation within
the organization, culminating in a range
of efforts and actions designed to reaffirm
the University as a public institution reliant
on and deserving of public funding (Ran &
Golden, 2011). State support ultimately was
restored in December 2009.
In regenerating, organizational
traits vital to recovery but which have
atrophied or are in disrepair are restored
and recreated. Regenerating can require
a substantial amount of effort from
organizational members, as it involves
determining those attributes needing
restoration, directing resources and
attention to relabel and reframe those,
and creating a wraparound linguistic
and visceral experience that supports
their recreation. For example, in the
case of Pennsylvania State University, a
commenter to Stripling’s (2009) coverage
of the situation voiced that the university
had, in fact, strayed from its roots as
a Land-Grant university, arguing that
the university has focused on attracting
increasingly wealthy students in pursuit of
prestige and was the most expensive state
university in the nation. This individual
called for the university to work to create
Figure 1. The 5R model:
Organizational identity processes to avoid organizational decline
AttributeStrength
Aligning Effort Needed
Reclaiming Regenerating
Reimagining
RetiringReaffirming
High EffortLow Effort
Strong/ActiveLow/Atrophied
35Supporting Organizational Turnaround Through Identity Work

5. opportunity and success for everyone.
Comments like these can act as invitations
for organization leaders to return to and
bolster neglected identity attributes. It is in
regenerating that identity elasticity may be
most evident (Kreiner, Hollensbe, Sheep,
Smith, & Kataria, 2015).
In reimagining, central organizational
traits may have atrophied, been for­
gotten or abandoned, or may remain
active in leaders’ and members’
organizational consciousness. What
signifies an organizational trait in need
of reimagination is that the trait in a new
form is vital for the organization’s future.
Therefore, organization members may go
through a process of reclaiming, retiring,
regenerating, and reaffirming certain
aspects of the trait, in addition to creating
entirely new forms of the trait, as needed.
In addition to retiring outdated beliefs
and attributes, reimagination is arguably
what the Polaroid Corporation needed to
compete effectively in a digital imaging
market (Tripsas & Gavetti, 2000).
The Need for Supportive Dialogue
and Experiences
The five social processes of retiring,
reclaiming, reaffirming, regenerating,
and reimagination require an integrative
effort of sensemaking, sense-giving,
and sense-exchanging among leaders
and members (Czarniawska, 1997). In
doing so, it is important to create an
organizational environment consistent
with and supportive of identity claims that
support turnaround, so that members’
embodied cognition of their organization’s
identity also reveals a message of
turnaround (Harquail & King, 2010). In
this way, organization members’ attention
and experiences in the organization
are managed in a more intentional and
positive way to promote self-fulfilling
prophecies consistent with success and
the specific identity social processes that
lead to turnaround. Otherwise, as other
researchers have pointed out, failure
is often the path of least resistance for
organizations in decline (Edwards et al.,
2002).
Organization consultants play
important roles in helping to create
supportive dialogues and organizational
environments. According to terminology
by Ybema (2010), these could be referred
to as nostalgic and postalgic narratives.
Nostalgic narratives combine discontent
about the present with pleasant memories
about the past, postalgic narratives disdain
the past, idealize the future, and further
condemn the intrusion of past ways in the
present and future. Specifically, nostalgic
narratives can help rekindle members’
excitement about how things used to be
in the past for the purpose of reclaiming
forgotten attributes, reaffirming active and
vital attributes, and regenerating neglected
attributes. Postalgic narratives can be
helpful for retiring active but unhelpful
attributes.
Reimagining activities require
complex combinations of nostalgic and
postalgic narratives customized for the
various identity attributes organization
members want to retire, reclaim, reaffirm,
and regenerate. During reimagining, it
is particularly critical that identity-related
dialogues and experiences are deliberate
and robust, due to the multiple changes
that are being attempted.
The failure of New Coke in the mid-
1980s may be considered an example of an
organization’s failure to promote adequate
dialogues and processes in the effort
to reimagine its identity and associated
products. New Coke was first launched in
1985 as a new, sweeter beverage designed
to help Coca-Cola compete against Pepsi’s
growing market share (Greising, 1998).
Ultimately, New Coke was on the market
only a short time and the public outcry
against the new formula was fierce. The
original formula was reintroduced less
than 3 months later.
Around the same time, another
attempt at reimagination—this time
by Western Union—was successfully
achieved. Founded in 1851 by Ezra Cornell,
Western Union quickly dominated the
telegraph industry. For the next 130 years,
the company was a prominent figure
in telecommunications. However, as
declining profits and mounting debts
increasingly plagued the organization,
Western Union started divesting itself
of telecommunications-based assets
and began recasting itself as “the
fastest way to send money worldwide.”
Its money transfer revenue exceeded
telecommunications revenue for the
first time in 1980 and it completely
discontinued telegrams in 2006.
Ideas for Application
Although many possible interventions
could be built around the 5R Model, what is
most pertinent to this article is how the 5R
model may be used in times of decline. As
a first step to spark recovery, many change
models involve defining the organization’s
vision, strategy, and organization design
components that reflect a recovered future
state of the organization. During this step,
it is important to deduce the organizational
identity that would support achievement of
that future state.
In the next step of a typical change
process, organizational diagnosis is
conducted to define the organization’s
Table 1. Applying the 5R Model to Identity Change
Current Identity Future Identity Identity Change
Action Required
Possible Strategies
Attribute A
(strong)
Attribute A Reaffirm Metaphors that emphasize these
traits
Attribute B
(strong)
Retire Changing business processes to
remove support for attribute
Attribute C
(atrophied)
Attribute C Regenerate Training and procedures to restore
these traits
Attribute D
(abandoned)
Attribute D Reclaim Storytelling that rekindles nostalgia
and memories of these traits
Attribute E
(strong or
atrophied)
Attribute E Reimagine Innovation processes to create new
forms of the trait
OD PRACTITIONER Vol.48 No. 1 201636

6. current state. This diagnosis step would
be adapted to include identifying and
assessing the strength of the organization’s
current identity attributes.
A third step of change is defining
the gap and outlining appropriate change
processes. It is at this point where use of
the 5R Model begins in earnest. First, the
organization’s current and future identities
are compared and identity change actions
are defined as indicated based on the
5R model. The fourth step of change
as it concerns identity is then defining
appropriate strategies to achieve the needed
shift. Table 1 shows an example of this type
of analysis.
Conclusion
Organizational identity is a powerful
attribute of firms that can be harnessed to
help organizations move through natural
phases of decline. This article proposes a
model of identity-related social processes
during decline, including retiring,
reclaiming, reaffirming, regenerating,
and reimagining attributes as needed to
support organizational turnaround and
avoid organizational death. Organization
consultants can play key roles in initiating
and supporting member dialogues and
experiences to support organizational
recovery. As such, it is important for
consultants to become familiar with
organizational lifecycles and organizational
identity, and learn ways to help clients
leverage their identity for success.
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Sam Rockwell is a professional
consultant to church and business
leaders, specializing in leadership
development, succession man­
age­ment, and corporate identity
development. He holds adjunct
positions in the MSOD Program
at Pepperdine University, Malibu,
CA, and in the MA in Strategic
Leadership Program in Life Pacific
College, San Dimas, CA. He is the
director of Gateway Collegium, an
innovative educational program
combining online courses, life
coaching, and live training
events. His research interests
are organizational identity,
globalization, and learning theory.
He can be reached at SRockwell@
foursquare.org.
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