Jim Collins, best selling author of “Good to Great”. This guy knows his stuff. I always love reading Collins. He is clearly one of our North American leaders regarding business and leadership. He continues to bring rigorous research and clever writing to help us, his readers, to greater understand how to lead. I’m glad to say, this book was no disappointment at all. So let’s get into it. Here’s what I found.
What To Expect.
It’s seldom I still get a hard copy of a book, but for Collins I do. I picked up the hard cover copy for this one. It’s 222 pages in total. There are 5 full chapters holding 124 pages of work.
He also includes a lot of appendices. Between the appendices and the notes, there are just over 85 pages. His appendices include a chunk of his research for the topic. It covers some of their findings as well as some theoretical work on the issue. In all, it’s a very helpful set of tools by a brilliant author’s research.
The Meat of the Book.
Collins put this project together for us to have a deeper understanding of how some companies, that appear healthy, fall from the peak of their success. Coming out of “Good to Great”, Collins knew that many who would feel that their organizations are strong enough to survive anything, would also need to be prepared for how they could end up in a spiral towards failure and ultimately complete destruction. In “How The Mighty Fall”, Collins outlines 5 key stages of decline that his research revealed. He claims that the research came out of over a combined 6000 years of corporate history. The rigor of his research is more than satisfying.
He outlines the 5 key stages of decline as follows.
STAGE ONE. Hubris Born Of Success
Success can breed an arrogance that helps no one. Stage one appears to be the turning point that many companies start to fall. Great success can lead many leaders to become too self assured in their own abilities. This can lead to not only corporate failure, but personal complications.
Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. p. 21
STAGE TWO. Undisciplined Pursuit Of More
Many organizations that grow in their arrogance, can start to take on more work then they can handle. Further, they can start to take on ideas that don’t fit the core values that initially brought success. To simply pursue more growth to continue your ‘winning streak’ is dangerous.
Taking action inconsistent with your core values is undisciplined. p. 55
STAGE THREE. Denial of Risk And Peril
Organizations that fall into stage 3 often have done research to try to find out why things are not going as they had planned. By this point, those organizations know that something is wrong, but they tend to attempt to blame others for their failures. Too often, they deny that they are actually responsible for the failures, as this would mean that the hubris which birthed so much of their last few attempts at success are wrong and actually not even remotely true. They deny the realities and often attempt to fix the potential problems by ‘mixing things up’.
When you begin to respond to data and warning signs with reorganization as a primary strategy, you may be well in denial. It’s a bit like responding to a severe heart condition or a caner diagnosis by rearranging your living room. p. 80
STAGE FOUR. Grasping For Salvation
By the time an organization is in stage 4, it is not only clear that failure is present, but those in leadership know that there is a very good chance of complete shutdown. They will tend to try anything to stay alive, now only falling more into the denial stage, but flat out showing unwillingness to admit any reality to their destruction.
Companies stuck in stage 4 try all sorts of new programs, new fads, new strategies, new visions, new cultures, new values, new breakthroughs, new acquisitions, and new saviors. And when one silver bullet fails, they search for another and then yet another.p.92
STAGE FIVE. Capitalization to Irrelevance or Death
Collins readily admits that they studied no organizations that were in Stage 5. The simple reality is that by this time, companies are lost and not willing to be part of research. Collins concludes,
No company we studied was destined to fall all the way to stage 5… But by the time the company has moved through stages 1, 2, 3 and 4, those in power can become exhausted and dispirited, and eventually abandon hope. And when you abandon hope, you should begin preparing for the end. p 107
Who is it for?
This book is not only for those in organizations that experiencing trouble, but for those leading health ones. Collins shows us what to watch for and what to build towards being healthy. So I would suggest that any organizational leader should invest their time in this quick read.
My Final Take.
I like Collins. Frankly, this book was a great read. Good to Great was a heavy tool to carry, but How the Mighty Fall felt like a natural extension of my hand, easy to carry and simple to recall when needed.