Could there be a hidden cause of chronic failure in a corporation, where over many years multiple CEOs and new strategies can't revitalize the firm after a past painful stumble? An emerging theory is that the persistent after effects of a cultural, managerial or economic trauma can cripple an...

When organizations that have survived traumatic reversals – for example, product failures, ethical scandals or market disruption – attempt turnarounds, they usually seek a fresh start, adopting a new strategy and installing new leadership. But if this new initiative doesn't work and the...