The company is a star in a fast-growing industry. Yet earnings have started to decline and competitors are grabbing a share of new business. Managers and employees alike are concerned, but both feel they’ve lost control over what happens to the company. Workers especially feel they are not in tune with the organization.

Most companies would call in a consultant-probably hordes of them-and identify the problem as poor morale. They might try to remedy things-as Kmart recently did-by having workers gather daily for an energizing cheer and to hear how much their CEO cares. But it’s way beyond poor morale, says Dallas business consultant James D. Scurlock. It’s a case of organizational depression.

Just like individuals, companies get deeply depressed, argues Scurlock, head of Savannah Consulting. And as with individuals, the telltale signs are a sense of disconnection and feelings of hopelessness.

“Organizational depression paralyzes the persons within by making individual aspirations untenable,” observes Scurlock. The problem reflects serious structural flaws in the company-typically a layer of useless management that ought to go.

Like a good therapist, Scurlock’s main diagnostic tool is a sharp ear. Companies can check for depression by listening to workers for clues about how they really feel.