I just finished Jim Collins’ truly enlightening book, “How The Mighty Fall”. It’s a short read covering the five steps to an organization’s decline, and is one of the best books I’ve read in a LONG time. It’s just too good not to share, so below are some quick notes I took while reading:
THE FIVE STAGES OF DECLINE
1. Hubris Born Of Success
- Biggest mistake is confusing what and why.
- “We’re successful because of what we do so well” replaces “we’re successful because we understand why we do specific things, and under the conditions in which they would no longer work.
2. Undisciplined Pursuit of More
- Leaders stray away from the key to success: disciplined creativity
- The company dives into areas where they cannot be excellent or are outside the scope of work that made them successful to begin with
3. Denial of Risk and Peril
- The company and its leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data
4. Grasping For Salvation
- Leaders panic, and begin to take bold leads into unknown/unmastered territory, look for mergers/acquisitions, and pursue untested strategies.
- Only hope left at this stage is to go back to disciplined creativity
5. Capitulation to Irrelevance or Death
- You can be profitable and bankrupt. You pay your bills with cash.
- The best leaders feel a sense of urgency in both good and bad times.
- Recovery lies in sound strategic thinking.
“Circumstances alone do not determine outcomes. We are not imprisoned by our circumstances, our setbacks, our history, our mistakes or our staggering defeats. We are freed by our choices.”
“The point of struggle is not just to survive, but to build an enterprise that makes such a distinctive impact on the world it touches, and does so with such superior performance, that it would leave a gaping hole – a hole that could not be easily filed by any other institution – if it ceased to exist.”