Are Millennial Workers and Boomer Managers Destroying the Mafia, Too?

The kiss of death for Mafia families isn’t necessarily from gang wars or snitches. These days, organized crime is threatened more by mismanagement, lousy hires and half-baked succession plans.

Former mob investigators point to the case against Andrew Russo, the man federal prosecutors allege heads the Colombo crime family, one of five storied Mafia clans that ruled the New York underworld for much of the last century.

The alleged Colombo leader’s management troubles seem to mirror those of Tony Soprano, the fictional TV mob boss who wrestled with picking a successor and keeping his hands out of the dirty work.

Mr. Russo was arrested Sept. 14 in a crippling takedown of the Colombo family’s C-suite leaders and middle managers. Prosecutors said in court documents that Mr. Russo, his underboss, consigliere, several captains and other subordinates carried out over two decades a purported scheme to extort money from a New York City union and a related healthcare fund.

In hindsight, Mr. Russo’s executive blunders included micromanaging underlings and, at 87 years old, holding on to his job too long, said Scott Curtis, a former Federal Bureau of Investigation agent who investigated the family operation for years.

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In the mid-20th century, New York’s five Mafia families “operated like a McDonald’s franchise,” said Jerold Zimmerman, a professor emeritus at the Simon Business School at the University of Rochester.

Illegal enterprises—such as gambling dens, trafficking of illicit goods and corruption involving unions and construction firms—were operated independently, he said. Those in charge paid a share of profits to the boss, who kept the peace and doled out promotions, said Dr. Zimmerman, one of the authors of a book about business practices in New York crime families.

One reason for the Mafia’s decline is the FBI’s pursuit of organized crime in the 1980s and 1990s, resulting in the arrest and conviction of hundreds of experienced hands. The five families still operate, but their market reach has shrunk and membership has taken a hit.