How The Mighty Fall

"No matter how much you've achieved, no matter how far you've gone, no matter how much power you've garnered, you are vulnerable to decline." 

- From Jim Collins' (Good to be Great and Great By Choice) 

Years after Jim Collins wrote the classic book, "Good to Be Great" several of the companies featured in the book went down - like Kodak. So he began a study of these businesses and found some common threads and wrote the book

"How the Mighty Fall".  

Here are Jim Collins' 5 Stages of Decline as he outlined in "How the Mighty Fall", along with some questions to consider whether you are showing any of the signs.

Stage 1: Hubris Born of Success

·        Do you think that luck or chance had no role in your successes?

·        Do you think there is no need to stay vigilant and plan for the unexpected because you are making the right decisions and doing the right things to remain successful?

·        Do you take full credit for your successes and assume the attitude that your company is so great, you can take on anything?

Stage 2: Undisciplined Pursuit of More

·        Have you branched out to new areas (products, geographical regions, ventures) that may be outside of your expertise or your ability to execute well?

·        Have you grown so much so fast that you are no longer able to take the time to fill the key seats in your organization with the right people?

·        Are you growing so fast that you are not able to scale or achieve the same level of excellence that once made your company great?

Stage 3: Denial of Risk and Peril

·        Do you find yourself putting a positive spin on ambiguous data or overly emphasizing positive data while downplaying negative data?

·        Have your people stopped coming to you with their concerns or voicing disagreement with your decisions?

·        Do you feel that external factors are largely responsible for problems in your company?

·        Are you unconcerned about the mounting evidence that your company is beginning to fall because you can "explain away" this evidence?

Stage 4: Grasping for Salvation

·        Are you looking for a "silver bullet" to get your company back on the right track?  

·        Do you believe that your company will recover if you can just find a new charismatic, visionary leader? A new product or a bold new strategy? An exciting new company culture?

·        Have you abandoned your disciplined 20 mile march that made you great in the first place in search of a quick fix?

Stage 5: Capitulation to Irrelevance or Death

·        Have your repeated attempts to find salvation for your company left you financially depleted and emotionally demoralized?

·        Have you given up hope of building a company with a great future? 

If you answered "Yes" to any of these questions, you may be showing some signs of decline.  

Luckily, this does not mean that your company is doomed! Collins is very clear that his research indicates that the stages of decline are reversible. He states, "Most companies eventually fall, and we cannot deny this fact. Yet our research indicates that organizational decline is largely self-inflicted, and recovery largely within our own control." 

Maybe it is time you took a step back and answered the questions above.  Catch yourself and your company now and begin the road back to success.