How the Mighty Fall: And Why Some Companies Never Give In
by Jim Collins
In working with our clients from coast to coast, I’ve discovered an interesting insight concerning author Jim Collins. Those who know of his body of work fall into two distinct categories:
- Those who appreciate his research, admire his product and wait anxiously for his next release and …
- Those who argue that he picks and chooses his data and that his content often runs counter to research on hundreds of companies, conducted over decades by dozens of scholars.
Either way you can’t argue that this noted author and devoted student of companies of all kinds can produce best sellers. As the author of the national bestseller Good to Great and coauthor of Built to Last, Collins’ work has been featured in Fortune, BusinessWeek, USA Today and the Harvard Business Review.
What I found very interesting in How The Mighty Fall was the fact that Collins chose to examine the decline of several companies which he hailed in his previous bestseller, Good to Great. While he obviously had nothing to do with the decline of such companies as Circuit City and Fannie Mae, which he previously praised, he could have easily chosen not to examine how they came to fall on hard times. Instead he decided to delve into exactly what happened as these companies strayed away from what once made them great.
Collins reveals that, in today’s financially perilous environment, decline can actually be avoided, detected, and reversed. The author and his research team spent more than four years on this research project and, in doing so, uncovered five stages of decline.
Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death
He describes each stage in detail, gives examples of companies in each, and points out that by understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom.
I’ve always found it interesting that, in the very same economy, a Best Buy can prosper while a Circuit City fades into oblivion, Wal-Mart continues to grow and profit while we question the longevity of Sears and Kmart, Southwest Airline achieves a profit while all of its competitors fall short. The author’s research will provide you with some valuable insight into this unusual phenomenon.
Collins points out that every institution, no matter how great, is vulnerable to decline. However, that decline is largely self-inflicted and the path to recovery lies largely in the hands of the companies themselves.
You’ll find this 222 page work an easy and interesting read as we continue to witness major changes and challenges in the nation’s financial status. Looks like another winner for Jim Collins.