Most people in the business world have heard the broken windows theory, but they might not know its origins.


This theory became popular when Rudy Giuliani first became mayor of New York City in 1994. As Giuliani and his team pondered how to improve the city, it occurred to them that they could make the city safer by improving the appearance of neighborhoods, or fixing their broken windows. Once neighborhoods are defaced with graffiti or broken windows, other types of lawless behavior tends to escalate. If no one cares about a neighborhood and it becomes broken down, lawlessness and disorder tend to prevail. Giuliani and his team considered the work of George Kelling and James Wilson, criminologists who believed that minor crimes often led to more serious ones. They agreed with the theory and believed that if they just focused on prosecuting the smaller crimes, the larger ones might not even occur. Their efforts had dramatic results, improving the appearance of these formerly crime-ridden neighborhoods and reducing more violent crimes.


Businesses watched the major transformation of New York City and learned from this. They said, “If we can identify our own ‘broken windows’ and fix them, we might also change our corporate atmosphere in ways that would lead to greater success.”


The theory is very popular, especially considering the success it had in New York City. But for far too many companies, it remains simply a theory. They recognize that it would help them to fix their own broken windows, but they don’t actually do it.


Don’t be one of those companies.


Let’s start with the most difficult issue to confront: Corporate leaders don’t address their broken windows because it stings their egos to do so. What, after all, are broken windows in the corporate setting? They are problems that have been left far too long without being addressed. It’s the ugly cables exposed in the hallway everyone walks by. It’s the conference room chairs that don’t match. It’s that weird smell coming from the refrigerator in the break room.


These are things everyone knows are present, although you as the leader may have gotten used to them. Maybe you’ve accepted them and have simply said,“That’s just how things are around here.”


And maybe it’s not just aesthetic issues. Maybe you’re perpetually behind in your financial record keeping. Maybe you’re always talking about upgrading your enterprise software, but you never quite get around to it.


These are the signs of a company that is not committed to excellence. Employees at a company like this tend to doubt they’ll be rewarded for their initiative, innovation, and hard work. So why bother displaying laudable performance at a company that doesn’t value excellence?


I have often counseled clients to be vigilant about cleaning out their refrigerators. Why? Surely there are more important issues than that to tackle.


But consider: At some point you’ve probably sent around one of those e-mails letting everyone know to clean their stuff out of the refrigerator by end-of-day Friday, because anything left in there is going to be tossed. Now what do you do when several employees don’t clean their stuff out on Friday? You said you would toss it. Do you now think: “I don’t want to throw out their stuff, so I’ll give them another chance”?


And what happens when another chance turns into three or four chances, and you’re still not throwing the stuff out?


This impacts your business in ways you may not realize. You’re sending a signal to your people that you don’t really mean the things you say, and that they can ignore your warnings without paying a price. They’ll feel the same way about project deadlines or expense reports. Sure, the boss says we’re supposed to do this, but nothing happens when we don’t.


By contrast, what will happen if you throw out everything in the fridge at 5 p.m. sharp on Friday? You told them you would! Now they’ll expect you to mean – and back up – the things you say.


Subtle things like this can make all the difference between an atmosphere that engenders excellence and one that accepts broken windows.


So why don’t companies actually do this? It starts at the top, and the person at the top is often the least likely person to recognize the broken windows. After all, he or she has been living with them a long time, and they don’t seem to be causing big problems.


In order to really identify the broken windows, and be in a position to fix them, you can do several things. One is to become highly critical of your own operation. Some people have the mental fortitude to pull this off, but for many others, it’s a struggle. Another is to bring in outsiders to observe your operation and point out the broken windows to you. They’ll have no trouble noticing them, but it might sting when they point them out to you.


You can also ask your employees, although I’d suggest a less direct way of getting their feedback. If you simply ask your employees what your broken windows are, they might be reluctant to give you a candid answer. They might sense that you have a blind spot about certain things, and they might not be confident they can broach these subjects with you.


So instead, ask them three questions: What should we stop doing? What should we start doing? What should we keep doing?


Their answers to these questions will expose a lot of broken windows. Many of them are little things. They’re not hard to fix. But companies who ignore the little things often send a message that they can’t be trusted to get the big things right either – or at least not at a level of excellence.


It’s hard to think of a neighborhood as beautiful when it’s full of broken windows. Now apply the same logic to your company. And stop thinking of the broken-windows concept as a theory. For you, it has to be a call to action.


Written by: Wade Wyant

Red Wagon Advisors