The Entrenched Organization

Sustainable organizations develop people. Entrenched organizations protect circles.

I have learned that some organizations fail because they become too committed to protecting familiar relationships. Those organizations become entrenched.

Entrenchment can take many forms: nepotism, cronyism, patronage, favoritism, homophily, in-group favoritism, and in-group/out-group dynamics. These patterns can manifest through limited access, restricted opportunity, centralized authority, information control, loyalty over competence, influence over merit, and reduced accountability.

Recently, I experienced what it feels like to enter a long-standing society with ideas, energy, research, and a desire to build, only to discover that access to information, opportunity, and influence may be filtered through existing relationships. At first, these moments seemed like isolated events. Eventually, a pattern emerged.

For example, the long-standing society was recently rewarded for meeting an annual deadline. Although the deadline was met, the recognition did not reflect the quality of the internal processes used to achieve it. In an entrenched organization, external validation can unintentionally reinforce existing practices, even when those practices are weakening innovation, excluding talent, and limiting potential.

Receiving a reward, however, is not the same as being accountable. Accountability requires examining how decisions are made, how power is exercised, how information is shared, and whether the organization’s processes remain aligned with its mission.

But a lack of accountability can, and eventually will, erode the very foundation upon which a historic society is built. Nonprofit governance research supports that concern. In The Wisdom of Crowds? Groupthink and Nonprofit Governance, Melanie B. Leslie explains how nonprofit boards can become vulnerable to groupthink when allegiance among board members begins to interfere with independent judgment and the organization’s best interests.

In addition, research on organizational cronyism reaches a similar conclusion. For example, a 2026 systematic review found that cronyism, preferential treatment based on personal relationships rather than merit, can contribute to injustice, exclusion, and performance loss, particularly where leadership practices and institutional safeguards permit it.

Likewise, the law reflects similar concerns regarding accountability and fiduciary responsibility. In Raven’s Cove Townhomes, Inc. v. Knuppe Development Co., the California Court of Appeal emphasized the fiduciary obligations of nonprofit directors and the importance of acting in the interests of the organization rather than allowing those in control to benefit themselves or their associates at the organization’s expense.

Similarly, Florida law imposes duties requiring nonprofit directors to act in good faith, with appropriate care, and in a manner they reasonably believe to be in the best interests of the corporation, as discussed in Sports Enterprises, Inc. v. Goldklang.

As Albus Dumbledore observes in J. K. Rowling’s Harry Potter and the Sorcerer’s Stone, “It takes a great deal of bravery to stand up to our enemies, but just as much to stand up to our friends.”

Sustainable organizations require leaders who are willing to question opponents and allies, outsiders and insiders, and who are willing to challenge familiar relationships with the same rigor they apply to unfamiliar ideas.

When friendship and loyalty become more important than competence, accountability, transparency, and merit, the organization eventually becomes limited by the very relationships its leadership is trying to preserve.