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How The Mighty Fall: And Why Some Companies Never Give In
Decline can be avoided.
Decline can be detected.
Decline can be reversed.
Amidst the desolate landscape of fallen great companies, Jim Collins began to wonder: How do the mighty fall? Can decline be detected early and avoided? How far can a company fall before the path toward doom becomes inevitable and unshakable? How can companies reverse course?
In How the Mighty Fall, Collins confronts these questions, offering leaders the well-founded hope that they can learn how to stave off decline and, if they find themselves falling, reverse their course. Collins' research project—more than four years in duration—uncovered five step-wise 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
By understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom.
Great companies can stumble, badly, and recover.
Every institution, no matter how great, is vulnerable to decline. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do. But, as Collins' research emphasizes, some companies do indeed recover—in some cases, coming back even stronger—even after having crashed into the depths of Stage 4.
Decline, it turns out, is largely self-inflicted, and the path to recovery lies largely within our own hands. We are not imprisoned by our circumstances, our history, or even our staggering defeats along the way. As long as we never get entirely knocked out of the game, hope always remains. The mighty can fall, but they can often rise again.
Decline can be detected.
Decline can be reversed.
Amidst the desolate landscape of fallen great companies, Jim Collins began to wonder: How do the mighty fall? Can decline be detected early and avoided? How far can a company fall before the path toward doom becomes inevitable and unshakable? How can companies reverse course?
In How the Mighty Fall, Collins confronts these questions, offering leaders the well-founded hope that they can learn how to stave off decline and, if they find themselves falling, reverse their course. Collins' research project—more than four years in duration—uncovered five step-wise 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
By understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom.
Great companies can stumble, badly, and recover.
Every institution, no matter how great, is vulnerable to decline. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do. But, as Collins' research emphasizes, some companies do indeed recover—in some cases, coming back even stronger—even after having crashed into the depths of Stage 4.
Decline, it turns out, is largely self-inflicted, and the path to recovery lies largely within our own hands. We are not imprisoned by our circumstances, our history, or even our staggering defeats along the way. As long as we never get entirely knocked out of the game, hope always remains. The mighty can fall, but they can often rise again.
240 pages, Hardcover
First published January 1, 2009
About the author
James C. Collins
64 books2,246 followersLibrarian Note: There is more than one author in the GoodReads database with this name.
Jim Collins is a student and teacher of enduring great companies — how they grow, how they attain superior performance, and how good companies can become great companies. Having invested over a decade of research into the topic, Jim has authored or co-authored four books, including the classic BUILT TO LAST, which has been a fixture on the Business Week best seller list for more than six years, and has been translated into 29 languages. His work has been featured in Fortune, The Wall Street Journal, Business Week, Harvard Business Review, and Fast Company.
Jim’s book, GOOD TO GREAT: Why Some Companies Make the Leap ... And Others Don’t, attained long-running positions on the New York Times, Wall Street Journal and Business Week best seller lists, has sold 3 million hardcover copies since publication and has been translated into 35 languages, including such languages as Latvian, Mongolian and Vietnamese.
His most recent book, HOW THE MIGHTY FALL: And Why Some Companies Never Give In, was published on May 19, 2009.
Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado, where he now conducts research and teaches executives from the corporate and social sectors. Jim holds degrees in business administration and mathematical sciences from Stanford University, and honorary doctoral degrees from the University of Colorado and the Peter F. Drucker Graduate School of Management at Claremont Graduate University.
Jim has served as a teacher to senior executives and CEOs at over a hundred corporations. He has also worked with social sector organizations, such as: Johns Hopkins Medical School, the Girl Scouts of the USA, the Leadership Network of Churches, the American Association of K-12 School Superintendents, and the United States Marine Corps. In 2005 he published a monograph: Good to Great and the Social Sectors.
In addition, Jim is an avid rock climber and has made one-day ascents of the North Face of Half Dome and the Nose route on the South Face of El Capitan in Yosemite Valley. He continues to climb at the 5.13 grade.
Jim Collins is a student and teacher of enduring great companies — how they grow, how they attain superior performance, and how good companies can become great companies. Having invested over a decade of research into the topic, Jim has authored or co-authored four books, including the classic BUILT TO LAST, which has been a fixture on the Business Week best seller list for more than six years, and has been translated into 29 languages. His work has been featured in Fortune, The Wall Street Journal, Business Week, Harvard Business Review, and Fast Company.
Jim’s book, GOOD TO GREAT: Why Some Companies Make the Leap ... And Others Don’t, attained long-running positions on the New York Times, Wall Street Journal and Business Week best seller lists, has sold 3 million hardcover copies since publication and has been translated into 35 languages, including such languages as Latvian, Mongolian and Vietnamese.
His most recent book, HOW THE MIGHTY FALL: And Why Some Companies Never Give In, was published on May 19, 2009.
Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado, where he now conducts research and teaches executives from the corporate and social sectors. Jim holds degrees in business administration and mathematical sciences from Stanford University, and honorary doctoral degrees from the University of Colorado and the Peter F. Drucker Graduate School of Management at Claremont Graduate University.
Jim has served as a teacher to senior executives and CEOs at over a hundred corporations. He has also worked with social sector organizations, such as: Johns Hopkins Medical School, the Girl Scouts of the USA, the Leadership Network of Churches, the American Association of K-12 School Superintendents, and the United States Marine Corps. In 2005 he published a monograph: Good to Great and the Social Sectors.
In addition, Jim is an avid rock climber and has made one-day ascents of the North Face of Half Dome and the Nose route on the South Face of El Capitan in Yosemite Valley. He continues to climb at the 5.13 grade.
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January 20, 2010
This book came across less as a useful tool for avoiding disaster and more as a defense of why so many of the companies profiled in Good to Great failed (answer: they stopped following Collins' advice!) Additionally, Collins gives no data to support his assertions, relying solely on anecdotes and assurances that he has the data and has looked at it.
The biggest flaw is that he's essentially doing a post-mortem risk assessment on these firms, looking at each risk in a vacuum. Unfortunately, risks don't exist in a vacuum. They're very dynamic and Collins misses that dimension by pointing to the one or two things a company does (or doesn't do) that cause failure.
The biggest flaw is that he's essentially doing a post-mortem risk assessment on these firms, looking at each risk in a vacuum. Unfortunately, risks don't exist in a vacuum. They're very dynamic and Collins misses that dimension by pointing to the one or two things a company does (or doesn't do) that cause failure.
October 17, 2012
Like his prior research, Jim Collins looked at several companies and their direct comparisons to identify commonalities shared by the failing companies that were not present in the comparison (successful) companies.
Study companies (those that succumbed to the five stages of decline):
A&P
Addressograph
Ames Department Stores
Bank of America (before it was acquired by NationsBank)
Circuit City
Hewlett-Packard (HP)
Merck
Motorola
Rubbermaid
Scott Paper
Zenith
5 Stages of Decline
Stage 1: Hubris Born of Success
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that create success in the first place. When the rhetoric of success ("We're successful because we do these specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work"), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success - and thereby overestimate their own merit and capabilities - have succumbed to hubris.
Stage 2: Undisciplined Pursuit of More
Hubris from Stage 1 ("We're so great, we can do anything!") leads right into Stage 2, the Undisciplined Pursuit of More - more scale, more growth, more acclaim, more of whatever those in power see as "success." Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence, or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.
Stage 3: Denial of Risk and Peril
As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to "explain away" disturbing data or to suggest that the difficulties are "temporary" or "cyclic" or "not that bad," and "nothing is fundamentally wrong." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsized risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.
Stage 4: Gasping for Salvation
The cumulative peril and/or risks-gone-bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is, How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about its greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.
Stage 5: Capitulation to Irrelevance or Death
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases, their leaders just sell out; in other cases, the institution atrophies into utter insignificance; and in the most extreme cases, the enterprise simply dies outright.
At the end of each of the first four stages, I'll summarize the stage with a series of markers. Not every marker shows up in every case of decline, and the presence of a marker does not necessarily mean that you have a disease, but it does indicate an increased possibility that you're in that stage of decline. You can use these markers as a self-diagnostic checklist. Some of the markers listed have little or not text dedicated to them in the preceding pages, for the simple reason that they're highly self-explanatory.
Markers for Stage 1
-Success Entitlement, Arrogance: Success is viewed as "deserved," rather than fortuitous, fleeting, or even hard earned in the face of daunting odds; people begin to believe that success will continue almost no matter what the organization decides to do, or not to do.
-Neglect of a Primary Flywheel: Distracted by extraneous threats, adventures, and opportunities, leaders neglect a primary flywheel, failing to renew it with the same creative intensity that made it great in the first place.
-"What" Replaces "Why": The rhetoric of success ("We're successful because we do these specific things") replaces understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work").
-Decline in Learning Orientation: Leaders lose the inquisitiveness and learning orientation that mark those truly great individuals who, no matter how successful they become, maintain a learning curve as steep as when they first began their careers.
-Discounting the Role of Luck: Instead of acknowledging that luck and fortuitous events might have played a helpful role, people begin to presume that success is due entirely to the superior qualities of the enterprise and its leadership.
Markers for Stage 2
-Unsustainable Quest for Growth, Confusing Big with Great: Success creates pressure for more growth, setting up a vicious cycle of expectations; this strains people, the culture, and systems to the breaking point; unable to deliver consistent tactical excellence, the institution frays at the edges.
-Undisciplined Discontinuous Leaps: The enterprise makes dramatic moves that fail at least one of the following three tests: 1) Do they ignite passion and fit with the company's core values? 2) Can the organization be the best in the world at these activities or in these arenas? 3) Will these activities help drive the organization's economic or resource engine?
-Declining Proportion of Right People in Key Seats: There is a declining proportion of right people in key seats, because of losing the right people and/or growing beyond the organization's ability to get enough people to execute on that growth with excellence (e.g., breaking Packard's Law).
-Easy Cash Erodes Cost Discipline: The organization responds to the increasing costs by increasing prices and revenues rather than increasing discipline.
-Bureaucracy Subverts Discipline: A system of bureaucratic rules subverts the ethic of freedom and responsibility that marks a culture of discipline; people increasingly think in terms of "jobs" rather than responsibilities.
-Problematic Succession of Power: The organization experiences leadership-transition difficulties, be they in the form of poor succession planning, failure to groom excellent leaders from within, political turmoil, bad luck, or an unwise selection of successors.
-Personal Interests Placed Above Organizational Interests: People in power allocate more for themselves or their constituents - more money, more privileges, more fame, more of the spoils of success - seeking to capitalize as much as possible in the short term, rather than investing primarily in building greatness decades into the future.
Markers for Stage 3
-Amplify the Positive, Discount the Negative: There is a tendency to discount or explain away negative data rather than presume that something is wrong with the company; leaders highlight and amplify external praise and publicity.
-Big Bets and Bold Goals Without Empirical Validation: Leaders set audacious goals and/or make big bets that aren't based on accumulated experience, or worse, that fly in the face of the facts.
-Incurring Huge Downside Risk Based on Ambiguous Data: When faced with ambiguous data and decisions that have a potentially severe or catastrophic downside, leaders take a positive view of the data and run the risk of blowing a hole "below the waterline."
-Erosion of Healthy Team Dynamics: There is a marked decline in the quality and amount of dialogue and debate; there is a shift toward either consensus or dictatorial management rather than a process of argument and disagreement followed by unified commitment to execute decisions.
-Externalizing Blame: Rather than accept full responsibility for setbacks and failures, leaders point to external factors or other people to affix blame.
-Obsessive Reorganizations: Rather than confront the brutal realities, the enterprise chronically reorganizes; people are increasingly preoccupied with internal politics rather than external conditions.
-Imperious Detachment: Those in power become more imperious and detached; symbols and perks of executive-class status amplify detachment; plush new office buildings may disconnect executives from daily life.
Markers for Stage 4
-A Series of Silver Bullets: There is a tendency to make dramatic, big moves, such as a "game changing" acquisition or a discontinuous leap into a new strategy or an exciting innovation, in an attempt to quickly catalyze a breakthrough - and then to do it again and again, lurching about from program to program, goal to goal, strategy to strategy, in a pattern of chronic inconsistency.
-Grasping for a Leader-as-Savior: The board responds to threats and setbacks by searching for a charismatic leader and/or outside savior.
-Panic and Haste: Instead of being calm, deliberate, and disciplined, people exhibit hasty, reactive behavior, bordering on panic.
-Radical Change and "Revolution" With Fanfare: The language of "revolution" and "radical" change characterizes the new era: New programs! New cultures! New strategies! Leaders engage in hoopla, spending a lot of energy trying to align and "motivate" people, engaging in buzzwords and taglines.
-Hype Precedes Results: Instead of setting expectations low - underscoring the duration and difficulty of the turn-around - leaders hype their visions; they "sell the future" to compensate for the lack of current results, initiating a pattern of overpromising and underdelivering.
-Initial Upswing Followed by Disappointment: There is an initial burst of positive results, but they do not last; dashed hope follows dashed hope; the organization achieves no buildup, no cumulative momentum.
-Confusion and Cynicism: People cannot easily articulate what the organization stands for; core values have eroded to the point of irrelevance; the organization has become "just another place to work," a place to get a paycheck; people lose faith in their ability to triumph and prevail. Instead of passionately believing in the organization's core values and purpose, people become distrustful, regarding visions and values as little more than PR and rhetoric.
-Chronic Restructuring and Erosion of Financial Strength: Each failed initiative drains resources; cash flow and financial liquidity begin to decline; the organization undergoes multiple restructurings; options narrow and strategic decisions are increasingly dictated by circumstance.
Appendix 5: What Makes for the "Right People" in Key Seats?
1) The right people fit with the company's core values. Great companies build almost cult-like cultures, where those who do not share the institution's values find themselves surrounded by antibodies and ejected like a virus. People often ask, "How do we get people to share our core values?" The answer: you don't. You hire people who already have a predisposition to your core values, and hang on to them.
2) The right people don't need to be tightly managed. The moment you feel the need to tightly manage someone, you might have made a hiring mistake. If you have the right people, you don't need to spend a lot of time "motivating" or "managing" them. They'll be productively neurotic, self-motivated and self-disciplined, compulsively driven to do the best they can because it's simply part of their DNA.
3) The right people understand that they do not have "jobs"; they have responsibilities. They grasp the difference between their task list and their true responsibilities. The right people can complete the statement, "I am the one person ultimately responsible for..."
4) The right people fulfill their commitments. In a culture of discipline, people view commitments as sacred - they do what they say, without complaint. Equally, this means that they take great care in saying what they will do, careful to never overcommit or to promise what they cannot deliver.
5) The right people are passionate about the company and its work. Nothing great happens without passion, and the right people display remarkable intensity.
6) The right people display "window and mirror" maturity. When things go well, the right people point out the window, giving credit to factors other than themselves; they shine a light on other people who contributed to the success and take little credit themselves. Yet when things go awry, they do not blame circumstances or other people for setbacks and failures; they point in the mirror and say, "I'm responsible."
Study companies (those that succumbed to the five stages of decline):
A&P
Addressograph
Ames Department Stores
Bank of America (before it was acquired by NationsBank)
Circuit City
Hewlett-Packard (HP)
Merck
Motorola
Rubbermaid
Scott Paper
Zenith
5 Stages of Decline
Stage 1: Hubris Born of Success
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that create success in the first place. When the rhetoric of success ("We're successful because we do these specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work"), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success - and thereby overestimate their own merit and capabilities - have succumbed to hubris.
Stage 2: Undisciplined Pursuit of More
Hubris from Stage 1 ("We're so great, we can do anything!") leads right into Stage 2, the Undisciplined Pursuit of More - more scale, more growth, more acclaim, more of whatever those in power see as "success." Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence, or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.
Stage 3: Denial of Risk and Peril
As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to "explain away" disturbing data or to suggest that the difficulties are "temporary" or "cyclic" or "not that bad," and "nothing is fundamentally wrong." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsized risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.
Stage 4: Gasping for Salvation
The cumulative peril and/or risks-gone-bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is, How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about its greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.
Stage 5: Capitulation to Irrelevance or Death
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases, their leaders just sell out; in other cases, the institution atrophies into utter insignificance; and in the most extreme cases, the enterprise simply dies outright.
At the end of each of the first four stages, I'll summarize the stage with a series of markers. Not every marker shows up in every case of decline, and the presence of a marker does not necessarily mean that you have a disease, but it does indicate an increased possibility that you're in that stage of decline. You can use these markers as a self-diagnostic checklist. Some of the markers listed have little or not text dedicated to them in the preceding pages, for the simple reason that they're highly self-explanatory.
Markers for Stage 1
-Success Entitlement, Arrogance: Success is viewed as "deserved," rather than fortuitous, fleeting, or even hard earned in the face of daunting odds; people begin to believe that success will continue almost no matter what the organization decides to do, or not to do.
-Neglect of a Primary Flywheel: Distracted by extraneous threats, adventures, and opportunities, leaders neglect a primary flywheel, failing to renew it with the same creative intensity that made it great in the first place.
-"What" Replaces "Why": The rhetoric of success ("We're successful because we do these specific things") replaces understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work").
-Decline in Learning Orientation: Leaders lose the inquisitiveness and learning orientation that mark those truly great individuals who, no matter how successful they become, maintain a learning curve as steep as when they first began their careers.
-Discounting the Role of Luck: Instead of acknowledging that luck and fortuitous events might have played a helpful role, people begin to presume that success is due entirely to the superior qualities of the enterprise and its leadership.
Markers for Stage 2
-Unsustainable Quest for Growth, Confusing Big with Great: Success creates pressure for more growth, setting up a vicious cycle of expectations; this strains people, the culture, and systems to the breaking point; unable to deliver consistent tactical excellence, the institution frays at the edges.
-Undisciplined Discontinuous Leaps: The enterprise makes dramatic moves that fail at least one of the following three tests: 1) Do they ignite passion and fit with the company's core values? 2) Can the organization be the best in the world at these activities or in these arenas? 3) Will these activities help drive the organization's economic or resource engine?
-Declining Proportion of Right People in Key Seats: There is a declining proportion of right people in key seats, because of losing the right people and/or growing beyond the organization's ability to get enough people to execute on that growth with excellence (e.g., breaking Packard's Law).
-Easy Cash Erodes Cost Discipline: The organization responds to the increasing costs by increasing prices and revenues rather than increasing discipline.
-Bureaucracy Subverts Discipline: A system of bureaucratic rules subverts the ethic of freedom and responsibility that marks a culture of discipline; people increasingly think in terms of "jobs" rather than responsibilities.
-Problematic Succession of Power: The organization experiences leadership-transition difficulties, be they in the form of poor succession planning, failure to groom excellent leaders from within, political turmoil, bad luck, or an unwise selection of successors.
-Personal Interests Placed Above Organizational Interests: People in power allocate more for themselves or their constituents - more money, more privileges, more fame, more of the spoils of success - seeking to capitalize as much as possible in the short term, rather than investing primarily in building greatness decades into the future.
Markers for Stage 3
-Amplify the Positive, Discount the Negative: There is a tendency to discount or explain away negative data rather than presume that something is wrong with the company; leaders highlight and amplify external praise and publicity.
-Big Bets and Bold Goals Without Empirical Validation: Leaders set audacious goals and/or make big bets that aren't based on accumulated experience, or worse, that fly in the face of the facts.
-Incurring Huge Downside Risk Based on Ambiguous Data: When faced with ambiguous data and decisions that have a potentially severe or catastrophic downside, leaders take a positive view of the data and run the risk of blowing a hole "below the waterline."
-Erosion of Healthy Team Dynamics: There is a marked decline in the quality and amount of dialogue and debate; there is a shift toward either consensus or dictatorial management rather than a process of argument and disagreement followed by unified commitment to execute decisions.
-Externalizing Blame: Rather than accept full responsibility for setbacks and failures, leaders point to external factors or other people to affix blame.
-Obsessive Reorganizations: Rather than confront the brutal realities, the enterprise chronically reorganizes; people are increasingly preoccupied with internal politics rather than external conditions.
-Imperious Detachment: Those in power become more imperious and detached; symbols and perks of executive-class status amplify detachment; plush new office buildings may disconnect executives from daily life.
Markers for Stage 4
-A Series of Silver Bullets: There is a tendency to make dramatic, big moves, such as a "game changing" acquisition or a discontinuous leap into a new strategy or an exciting innovation, in an attempt to quickly catalyze a breakthrough - and then to do it again and again, lurching about from program to program, goal to goal, strategy to strategy, in a pattern of chronic inconsistency.
-Grasping for a Leader-as-Savior: The board responds to threats and setbacks by searching for a charismatic leader and/or outside savior.
-Panic and Haste: Instead of being calm, deliberate, and disciplined, people exhibit hasty, reactive behavior, bordering on panic.
-Radical Change and "Revolution" With Fanfare: The language of "revolution" and "radical" change characterizes the new era: New programs! New cultures! New strategies! Leaders engage in hoopla, spending a lot of energy trying to align and "motivate" people, engaging in buzzwords and taglines.
-Hype Precedes Results: Instead of setting expectations low - underscoring the duration and difficulty of the turn-around - leaders hype their visions; they "sell the future" to compensate for the lack of current results, initiating a pattern of overpromising and underdelivering.
-Initial Upswing Followed by Disappointment: There is an initial burst of positive results, but they do not last; dashed hope follows dashed hope; the organization achieves no buildup, no cumulative momentum.
-Confusion and Cynicism: People cannot easily articulate what the organization stands for; core values have eroded to the point of irrelevance; the organization has become "just another place to work," a place to get a paycheck; people lose faith in their ability to triumph and prevail. Instead of passionately believing in the organization's core values and purpose, people become distrustful, regarding visions and values as little more than PR and rhetoric.
-Chronic Restructuring and Erosion of Financial Strength: Each failed initiative drains resources; cash flow and financial liquidity begin to decline; the organization undergoes multiple restructurings; options narrow and strategic decisions are increasingly dictated by circumstance.
Appendix 5: What Makes for the "Right People" in Key Seats?
1) The right people fit with the company's core values. Great companies build almost cult-like cultures, where those who do not share the institution's values find themselves surrounded by antibodies and ejected like a virus. People often ask, "How do we get people to share our core values?" The answer: you don't. You hire people who already have a predisposition to your core values, and hang on to them.
2) The right people don't need to be tightly managed. The moment you feel the need to tightly manage someone, you might have made a hiring mistake. If you have the right people, you don't need to spend a lot of time "motivating" or "managing" them. They'll be productively neurotic, self-motivated and self-disciplined, compulsively driven to do the best they can because it's simply part of their DNA.
3) The right people understand that they do not have "jobs"; they have responsibilities. They grasp the difference between their task list and their true responsibilities. The right people can complete the statement, "I am the one person ultimately responsible for..."
4) The right people fulfill their commitments. In a culture of discipline, people view commitments as sacred - they do what they say, without complaint. Equally, this means that they take great care in saying what they will do, careful to never overcommit or to promise what they cannot deliver.
5) The right people are passionate about the company and its work. Nothing great happens without passion, and the right people display remarkable intensity.
6) The right people display "window and mirror" maturity. When things go well, the right people point out the window, giving credit to factors other than themselves; they shine a light on other people who contributed to the success and take little credit themselves. Yet when things go awry, they do not blame circumstances or other people for setbacks and failures; they point in the mirror and say, "I'm responsible."
June 15, 2009
Worthy of my trademarked award: SO GOOD, I'M READING IT TWICE!(tm) ;)
THE WORLD MAKES SENSE! This and other thoughts flooded my mind after finishing Jim Collins latest literary release. Concise and timely, the information applies to business as well as our personal lives!
I differ with another critics' premise that Mr. Collins' claims that "companies get into trouble because they overreach..."etc. That is NOT what Mr. Collins' found to happen first. There first is an arrogance, "hubris", which creeps in to the successful company's leadership. This, in turn, 'infects' everyone inside the company down the chain. I kept thinking "Pride goeth before a fall."
The author Jim Collins did not pose a black or white scenario. While I find the research sited by critics of Mr. Collins as interesting, it is NOT either/or. They seem to miss the point which the author goes to great lengths to remind us again and again: each of the five STAGES are indicative of what MAY be happening, and indeed a PATTERN which Mr. Collins and his associates found to be consistent. The stages in and of themselves are NOT the cause, they are all SYMPTOMS which may indicate mistaken direction and/or pending destruction. The further along in the stages, the more dire and imminent may be the decline. It is not a formula, but a set of consistencies.
I loved the book How The Mighty Fall and am re-reading it. I look forward to the soon-to-be released book from Mr. Collins on what to DO in these turbulent times!
THE WORLD MAKES SENSE! This and other thoughts flooded my mind after finishing Jim Collins latest literary release. Concise and timely, the information applies to business as well as our personal lives!
I differ with another critics' premise that Mr. Collins' claims that "companies get into trouble because they overreach..."etc. That is NOT what Mr. Collins' found to happen first. There first is an arrogance, "hubris", which creeps in to the successful company's leadership. This, in turn, 'infects' everyone inside the company down the chain. I kept thinking "Pride goeth before a fall."
The author Jim Collins did not pose a black or white scenario. While I find the research sited by critics of Mr. Collins as interesting, it is NOT either/or. They seem to miss the point which the author goes to great lengths to remind us again and again: each of the five STAGES are indicative of what MAY be happening, and indeed a PATTERN which Mr. Collins and his associates found to be consistent. The stages in and of themselves are NOT the cause, they are all SYMPTOMS which may indicate mistaken direction and/or pending destruction. The further along in the stages, the more dire and imminent may be the decline. It is not a formula, but a set of consistencies.
I loved the book How The Mighty Fall and am re-reading it. I look forward to the soon-to-be released book from Mr. Collins on what to DO in these turbulent times!
December 3, 2014
http://m360.sim.edu.sg/article/Pages/...
Even the Greatest Can Fail
THE Good to Great storyteller, Mr Jim Collins is back with How the Mighty Fall. Many great companies, even those that have lasted generations have fallen in recent years. This made Mr Collins question how and why it happens. More importantly, is there any way that companies can avoid the path of doom and gloom?
In his latest, he confronts these questions and gives an optimistic spin to leaders who may find themselves in a downward spiral and are seeking help.
Mr Collins’ four-year research uncovered the five stepwise 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, and Stage 5: Capitulation to Irrelevance or Death. Understanding these stages may help leaders climb back to the top.
This book is a great read, not just for leaders, but for consultants, entrepreneurs, and business coaches as well. It is one of those books that needs to be placed on an easy-to-reach shelf. I think this is even better than Good to Great. Maybe, Mr Collins is one of those authors who just gets better with each new book.
Even the Greatest Can Fail
THE Good to Great storyteller, Mr Jim Collins is back with How the Mighty Fall. Many great companies, even those that have lasted generations have fallen in recent years. This made Mr Collins question how and why it happens. More importantly, is there any way that companies can avoid the path of doom and gloom?
In his latest, he confronts these questions and gives an optimistic spin to leaders who may find themselves in a downward spiral and are seeking help.
Mr Collins’ four-year research uncovered the five stepwise 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, and Stage 5: Capitulation to Irrelevance or Death. Understanding these stages may help leaders climb back to the top.
This book is a great read, not just for leaders, but for consultants, entrepreneurs, and business coaches as well. It is one of those books that needs to be placed on an easy-to-reach shelf. I think this is even better than Good to Great. Maybe, Mr Collins is one of those authors who just gets better with each new book.
January 26, 2022
The often confronted, Good to Great author comes up with another striking analysis of how big companies fail. Readers who opt to love research-based analysis might find this book not fully convincing.
People who are into business would better comprehend what Jim Collins says and certainly get some insights. Specially, his explanation about the five failing stages the big companies go through is something to draw more insights from, though not all companies necessarily fail this way. Because risks are sometimes unique, and not all risks could be approached the same way by all organizations.
Surely a good read.
People who are into business would better comprehend what Jim Collins says and certainly get some insights. Specially, his explanation about the five failing stages the big companies go through is something to draw more insights from, though not all companies necessarily fail this way. Because risks are sometimes unique, and not all risks could be approached the same way by all organizations.
Surely a good read.
Read
September 30, 2018Well, I finally came across a business book that I actually liked. That's saying something.
Collins starts things off well by expressing his level of uncertainty in these studies (which he doesn't emphasize as much in his previous books, which is why it was harder to take them as seriously). But Collins has matured in his writing (perhaps, in part, because of the failure of some of the companies showcased in his book Good to Great) and I find this new, writing style much more compelling.
My favorite part is a casual mention of how early readers of this manuscript found it to be too depressing. I think it illustrates that this genre is full of books whose only purpose is to give another hit to the "inspirational business stories" junkies. In that environment, a hard look at the unpleasant nature of business is a breath of fresh air.
Collins starts things off well by expressing his level of uncertainty in these studies (which he doesn't emphasize as much in his previous books, which is why it was harder to take them as seriously). But Collins has matured in his writing (perhaps, in part, because of the failure of some of the companies showcased in his book Good to Great) and I find this new, writing style much more compelling.
My favorite part is a casual mention of how early readers of this manuscript found it to be too depressing. I think it illustrates that this genre is full of books whose only purpose is to give another hit to the "inspirational business stories" junkies. In that environment, a hard look at the unpleasant nature of business is a breath of fresh air.
April 21, 2015
I love Jim Collins books. This book was written between two of his major two books (Good to Great followed by Great by Choice). I heard Collins speak at a conference and he explained how it struck him that he could pop out this book in the middle of the other big research projects he was working on. The book talks about the trajectory of company's that fail (some that save them selves and other do not). I have seen this trajectory many times (or parts of it) and it rang very true to me and was a very helpful read.
March 29, 2013
I never cease to be amazed at how awesome Collins' books are. In How The Mighty Fall, he addresses the patterns evident in great companies when they fall, and how those patterns might be identified and reversed early.
February 12, 2019
Finished in one seating. Great book with many cautionary tales and an optimistic outlook.
March 10, 2019
If you’re particularly interested in detecting decline and reversing it before it’s too late, this book is for you.
November 26, 2018
I dont think I've liked any Jim Collins book, despite his books are in my field of interest (business). It always lack the rigor or the indepth study. The author admit upfront that there is no way to conduct a proper study with control group because there is no way to repeat the same experiment and keeping every factors constant. This book is again not an exception. And it's probably worse than his other books because this book is born out of one of his extended article/research, which gets lengthened into a relatively short book (240 pages).
According to the author, great companies fall by typically going through 5 stages below (they don't have to go through all 5 stages, nor the speed of crashing is similar).
Stage 1: Hubris Born of Success (arrogance, no attribute to luck)
Stage 2: Undisciplined Pursuit of More (undisciplined capital allocation and growth)
Stage 3: Denial of Risk and Peril (discount the negative, )
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death
I can agree with the first two stages. And I agree the most with Stage 2: Undisciplined Pursuit of More. But I find generally managers are biased and are optimistic about their companies due to the cognitive dissonance, a widely known phenomena in psychology. When a company is in stage 4 and 5, it's unclear if one can blame the managers anymore. Warren Buffett said: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.". It means turning around a declining business is very very hard.
Again, read the Halo effect if you think you like Jim Collins book. "The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers" by Phil Rosenzweig. While the book addressed Jim's other book "Good to Great", the idea is the same, that it's very hard to study failures this way, eg by study failure case study from outside and find common factors. In my view, a much better book about business failure is "The Ten Commandments for Business Failure" by Donald R. Keough, ex-chairman of Coca-cola.
According to the author, great companies fall by typically going through 5 stages below (they don't have to go through all 5 stages, nor the speed of crashing is similar).
Stage 1: Hubris Born of Success (arrogance, no attribute to luck)
Stage 2: Undisciplined Pursuit of More (undisciplined capital allocation and growth)
Stage 3: Denial of Risk and Peril (discount the negative, )
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death
I can agree with the first two stages. And I agree the most with Stage 2: Undisciplined Pursuit of More. But I find generally managers are biased and are optimistic about their companies due to the cognitive dissonance, a widely known phenomena in psychology. When a company is in stage 4 and 5, it's unclear if one can blame the managers anymore. Warren Buffett said: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.". It means turning around a declining business is very very hard.
Again, read the Halo effect if you think you like Jim Collins book. "The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers" by Phil Rosenzweig. While the book addressed Jim's other book "Good to Great", the idea is the same, that it's very hard to study failures this way, eg by study failure case study from outside and find common factors. In my view, a much better book about business failure is "The Ten Commandments for Business Failure" by Donald R. Keough, ex-chairman of Coca-cola.
August 13, 2020
What happened to Kodak and Nokia?
All happy families are alike; each unhappy family is unhappy in its own way
I’ve concluded that there are more ways to fall than to become great
The failure of successful businesses isn’t due to the changing economic climate or bad luck, but to their leaders who steer them in the wrong direction and exacerbate crises through mismanagement
Whether failures or successes, these companies reflect the humanity of their leaders – and so does yours
We are not imprisoned by our circumstances, our setbacks, our history, our mistakes, or even staggering defeats along the way. We are freed by our choices
Every company is vulnerable to decline
The decline of the Roman Empire shows that, no matter how vast or successful something is, it will always be in danger of collapsing
While their competitors, such as Apple and Samsung, were researching and innovating in smartphone technology, Nokia’s management decided to innovate in other, less profitable areas. Thus, when smartphones became popular, Nokia was completely out of the race.
Diagnose and treat your organization’s problems as early as possible
Like cancer, corporate failure is a staged disease – hard to detect, but easier to cure in the beginning stages, and much more difficult to stop later on
Failing companies go through Five Stages of Decline
Stage One: Hubris Born of Success – Successful large companies can fall victim to their own success. Momentum blinds them to the long-term consequences of bad judgment or neglect. When corporate leaders believe their own hype – We’re successful because we do these specific things – they forget they are successful because they understand precisely why they do what they do. The ancient Greeks first recognized and defined hubris as a surfeit of pride. Such pride always causes the arrogant hero to fail. Hubris is outrageous arrogance that manifests when companies strike out into fields in which they have no expertise or when they grow past their ability to deliver with excellence
Example: Motorola
The cycle:
1) You create a successful product
2) You believe that novel business ideas will fuel success more than your primary creation did
3) You don’t keep improving your primary offering
4) Your novel offerings all take too long to prosper
5) By the time you focus on your primary offering, the company’s in trouble
Stage Two: Undisciplined Pursuit of More
Needlessly vast slate of new offerings that distracted a company from its core pursuits
Companies were more likely to die from taking on too much than from a lagging core business
No company can build revenues faster than it can bring in the right people to manage that growth
Example, before the financial crisis of 2008, banks chased quick profits at all costs. This led them to borrow heavily, invest in risky, yet highly profitable products, and ignore costs
What are the key seats in your organization? What percentage of those seats can you say with confidence are filled with the right people?
One notable distinction between wrong people and right people is that the former see themselves as having jobs, while the latter see themselves as having responsibilities
Stage Three: Denial of Risk and Peril
Executives are likely to blame their subordinates, outside suppliers or unforeseen events when things go bad
They cannot address the risk or peril right before their eyes. During this phase, companies often restructure. But that can generate a false sense that you are doing something productive. If reorganization is your primary strategy, you’re in peril
Indicators that your company is in Stage Three include a culture that minimizes or hides bad news, reaches for unlikely goals without the necessary research, loses its sound team dynamics, and blames people or factors outside the company for the firm’s problems.
The best way for any company to deal with bad news is to use it in a constructive, practical way. Yet so many firms don’t do this. They prefer to simply blame their situation on outside factors and continue on the wrong path
Stage Four: Grasping for Salvation
As companies realize they’re foundering; they reach out for any solution. They burn through their own capital, create new offerings with little market research, seek mergers or acquisitions, or bring in a savior CEO. Companies often mimic human panic behavior, reacting in precisely the opposite way they need to at the moment. Just when companies must be at their most deliberate, thoughtful and strategic, they react emotionally. At these moments, those running a flailing company must: Breathe. Calm yourself. Think. Focus. Aim. Take one shot at a time. Indicators that your company suffers from Stage Four behavior include seeking game changers in any form, touting a radical change, refusing to lower expectations realistically, going through brief periods of illusory success, experiencing increased cynicism in the office and suffering a gradual loss of financial strength
Stage Five: Capitulation to Irrelevance or Death
Nothing matters more than cash on hand. Companies can show profits and still go bankrupt. Even companies with sound earnings can fail if they don’t have enough cash. As the death spiral moves from stage to stage, dying companies find themselves with diminishing cash on hand. One day, they simply don’t have enough to go on.
The first thing business leaders must do to reverse decline is adopting the right attitude
UK Prime Minister Winston Churchill: a laudable example of perseverance. Disgraced after several disastrous tactical decisions during World War I, Churchill lost most of his wealth in the 1929 stock market crash. Shortly after, he suffered long-lasting injuries and depression after a car accident. In the mid-1930s, the English power elite regarded Churchill as a relic of the past. But when a Nazi invasion threatened Britain in World War II, the nation called on Churchill to lead. Churchill rallied his country with the thundering call: We will never surrender
Never give in. Never stray from your core purpose. Accept that some ventures fail, close large operations if they’re not generating profits – but never “give up on the principles that define your culture.”
Bouncing back from failure doesn’t only depend on the right attitude but also a lot of hard work
All happy families are alike; each unhappy family is unhappy in its own way
I’ve concluded that there are more ways to fall than to become great
The failure of successful businesses isn’t due to the changing economic climate or bad luck, but to their leaders who steer them in the wrong direction and exacerbate crises through mismanagement
Whether failures or successes, these companies reflect the humanity of their leaders – and so does yours
We are not imprisoned by our circumstances, our setbacks, our history, our mistakes, or even staggering defeats along the way. We are freed by our choices
Every company is vulnerable to decline
The decline of the Roman Empire shows that, no matter how vast or successful something is, it will always be in danger of collapsing
While their competitors, such as Apple and Samsung, were researching and innovating in smartphone technology, Nokia’s management decided to innovate in other, less profitable areas. Thus, when smartphones became popular, Nokia was completely out of the race.
Diagnose and treat your organization’s problems as early as possible
Like cancer, corporate failure is a staged disease – hard to detect, but easier to cure in the beginning stages, and much more difficult to stop later on
Failing companies go through Five Stages of Decline
Stage One: Hubris Born of Success – Successful large companies can fall victim to their own success. Momentum blinds them to the long-term consequences of bad judgment or neglect. When corporate leaders believe their own hype – We’re successful because we do these specific things – they forget they are successful because they understand precisely why they do what they do. The ancient Greeks first recognized and defined hubris as a surfeit of pride. Such pride always causes the arrogant hero to fail. Hubris is outrageous arrogance that manifests when companies strike out into fields in which they have no expertise or when they grow past their ability to deliver with excellence
Example: Motorola
The cycle:
1) You create a successful product
2) You believe that novel business ideas will fuel success more than your primary creation did
3) You don’t keep improving your primary offering
4) Your novel offerings all take too long to prosper
5) By the time you focus on your primary offering, the company’s in trouble
Stage Two: Undisciplined Pursuit of More
Needlessly vast slate of new offerings that distracted a company from its core pursuits
Companies were more likely to die from taking on too much than from a lagging core business
No company can build revenues faster than it can bring in the right people to manage that growth
Example, before the financial crisis of 2008, banks chased quick profits at all costs. This led them to borrow heavily, invest in risky, yet highly profitable products, and ignore costs
What are the key seats in your organization? What percentage of those seats can you say with confidence are filled with the right people?
One notable distinction between wrong people and right people is that the former see themselves as having jobs, while the latter see themselves as having responsibilities
Stage Three: Denial of Risk and Peril
Executives are likely to blame their subordinates, outside suppliers or unforeseen events when things go bad
They cannot address the risk or peril right before their eyes. During this phase, companies often restructure. But that can generate a false sense that you are doing something productive. If reorganization is your primary strategy, you’re in peril
Indicators that your company is in Stage Three include a culture that minimizes or hides bad news, reaches for unlikely goals without the necessary research, loses its sound team dynamics, and blames people or factors outside the company for the firm’s problems.
The best way for any company to deal with bad news is to use it in a constructive, practical way. Yet so many firms don’t do this. They prefer to simply blame their situation on outside factors and continue on the wrong path
Stage Four: Grasping for Salvation
As companies realize they’re foundering; they reach out for any solution. They burn through their own capital, create new offerings with little market research, seek mergers or acquisitions, or bring in a savior CEO. Companies often mimic human panic behavior, reacting in precisely the opposite way they need to at the moment. Just when companies must be at their most deliberate, thoughtful and strategic, they react emotionally. At these moments, those running a flailing company must: Breathe. Calm yourself. Think. Focus. Aim. Take one shot at a time. Indicators that your company suffers from Stage Four behavior include seeking game changers in any form, touting a radical change, refusing to lower expectations realistically, going through brief periods of illusory success, experiencing increased cynicism in the office and suffering a gradual loss of financial strength
Stage Five: Capitulation to Irrelevance or Death
Nothing matters more than cash on hand. Companies can show profits and still go bankrupt. Even companies with sound earnings can fail if they don’t have enough cash. As the death spiral moves from stage to stage, dying companies find themselves with diminishing cash on hand. One day, they simply don’t have enough to go on.
The first thing business leaders must do to reverse decline is adopting the right attitude
UK Prime Minister Winston Churchill: a laudable example of perseverance. Disgraced after several disastrous tactical decisions during World War I, Churchill lost most of his wealth in the 1929 stock market crash. Shortly after, he suffered long-lasting injuries and depression after a car accident. In the mid-1930s, the English power elite regarded Churchill as a relic of the past. But when a Nazi invasion threatened Britain in World War II, the nation called on Churchill to lead. Churchill rallied his country with the thundering call: We will never surrender
Never give in. Never stray from your core purpose. Accept that some ventures fail, close large operations if they’re not generating profits – but never “give up on the principles that define your culture.”
Bouncing back from failure doesn’t only depend on the right attitude but also a lot of hard work
July 3, 2022
Jim Collins is one of the GREAT business writers. His book, Good to Great, is one of the two most influential business books I have ever read [if you’re wondering about the other one … Hiring for Attitude by Mark Murphy]. How the Mighty Fall is a very readable examination of the 5 stages once great businesses go through in their plummet to the bottom. I have long thought about this topic so I found it especially provocative.
Despite what other reviewers here assert, Collins very clearly outlines his criteria for his study of the companies who moved from out-performing to failing. He learned they don’t just give up. And they just didn’t forget about remaining competitive or innovative. He notes that the decline is a steeper slope than we might expect in some cases, but it can also be a slow steady erosion of position as well. Yet as Collins observes, the stages are all there. The astute leader can act in stages 1-4 to pull the business out.
Failing is a darker topic to read about. It doesn’t have the rosy allure that most business books sell — “success”, “great”, “winning”, etc. Falling (i.e., failing) isn’t what any leader wants to see happen. Yet it can. The value of this book, is it gives leaders clear insight about what to look for in order to avoid that fate. As Collins asserts, great leaders push the business forward to achieve new heights while staying true to the core culture of the business. Yet any leader should be alert about the flip side as well — failure — and proactively guarding against it at all times.
Despite what other reviewers here assert, Collins very clearly outlines his criteria for his study of the companies who moved from out-performing to failing. He learned they don’t just give up. And they just didn’t forget about remaining competitive or innovative. He notes that the decline is a steeper slope than we might expect in some cases, but it can also be a slow steady erosion of position as well. Yet as Collins observes, the stages are all there. The astute leader can act in stages 1-4 to pull the business out.
Failing is a darker topic to read about. It doesn’t have the rosy allure that most business books sell — “success”, “great”, “winning”, etc. Falling (i.e., failing) isn’t what any leader wants to see happen. Yet it can. The value of this book, is it gives leaders clear insight about what to look for in order to avoid that fate. As Collins asserts, great leaders push the business forward to achieve new heights while staying true to the core culture of the business. Yet any leader should be alert about the flip side as well — failure — and proactively guarding against it at all times.
April 30, 2021
“...we are not imprisoned by our circumstances, our setbacks, our history, our mistakes, or even staggering defeats along the way. We are freed by our choices.”
If you like business books; Collins research reveals the commons stages of decline and provides guidance on what to watch out for and how to bounce back when you stumble.
If you like business books; Collins research reveals the commons stages of decline and provides guidance on what to watch out for and how to bounce back when you stumble.
March 30, 2024
maybe the best in the series
Loved the structure and case studies here. Was an easy way to think in concrete terms about how organizations can get in the way of their own lasting success. I particularly appreciated the case studies of organizations that started to fail and turned it around and how.
Loved the structure and case studies here. Was an easy way to think in concrete terms about how organizations can get in the way of their own lasting success. I particularly appreciated the case studies of organizations that started to fail and turned it around and how.
October 10, 2017
Very well explained along with the case study which seems to have been prepared after a lot of research.
Read
October 4, 2017Essential guidebook on pitfalls and plunders. Analytical and insightful
September 7, 2021
Not as moving as Good to Great, but I still enjoyed the read. (Didn't read all of the appendix)
August 14, 2021
برخلاف کتابِ جذابِ از "خوب به عالی"، این کتاب خیلی بد بود. شاید هم از ترجمهش بود. نمیدونم.
January 27, 2023
Jim Collins and his team have yet again delivered on neatly and concisely summarising years of research into easily digestible lessons and warnings. This book is both inspiring and terrifying. Full of cautionary tales and counterintuitive lessons for any aspiring business leader. The fact that the majority of this was written before the financial crash of 2008 makes this an even more enthralling read/listen with "flash-forwards" to the (at the time) present day adding context and relevance to the teachings here.
April 21, 2016
Początkowym zamierzeniem Jima Collinsa, autora “Od dobrego do wielkiego” czy “Wielcy z wyboru”, było napisanie artykułu o tym, jak upadają wielkie firmy. Zebrany materiał okazał się jednak zbyt obszerny i w rezultacie powstała książka o znanych przedsiębiorstwach, które poniosły klęskę oraz o tym, co wskazywało nadchodzący upadek.
Collins poszukiwał odpowiedzi na pytanie nurtujące wielu przedsiębiorców - dlaczego upadają firmy, które odnosiły ogromne sukcesy. Na bazie dokumwntów takich firm jak Bank of America, IBM, Hewlett-Packard, Merck czy Motorola przeanalizował czy są jakieś wydarzenia, które zwiastują katastrofę i w jaki sposób można wpłynąć na tendencję spadkową oraz przekuć ją w sukces.
Podczas pracy odkrył pięć charakterystycznych etapów, które jego zdaniem przyczyniały się do upadku firmy. Pośród nich znalazły się: pycha będąca wynikiem sukcesu, chaotyczne sięganie po więcej, negowanie ryzyka i zagrożenia, rozpaczliwe szukanie ratunku oraz odejście w niebyt lub nieistotność. Uzyskane wyniki przybliżyły go do wskazania markerów poszczególnych etapów. Dla wygody czytelnika na końcu każdego rozdziału autor zebrał najważniejsze informacje, by łatwo można było wrócić do tych najistotniejszych. Na szarym tle wyszczególnia on również uniwersalne myśli, które warto zapamiętać.
Collins w książce wskazuje ważną regułę, że firmy bardzo często szukają winnych na zewnątrz. Wymieniają nieuczciwą konkurencję, słabą gospodarkę, strajki czy kryzysy oddalając przyczyny jak najbardziej od siebie. W wielu przypadkach jednak porażki mają źródło w działaniach liderów oraz pracowników. Dzięki zrozumieniu własnych działań oraz interpretacji poszczególnych markerów można ograniczyć ryzyko lub na nie zareagować w odpowiednim momencie. Badane przypadki wskazują na to, że niektóre przedsiębiorstwa mają szansę jeszcze się podnieść, a nawet stać jeszcze silniejsze niż przed kryzysem.
W ostatnim, ósmym, rozdziale Jim Collins przywołuje historię Xeroxa, który podnosi się pomimo bolesnego upadku. Dodaje, że widmo klęski bardzo często działa jak katalizator i przytacza słowa Dicka Clarka, dyrektora produkcji Merck, “Zmarnowanie kryzysu byłoby wielką stratą”.
Warto sięgnąć po tę lekturę, ponieważ jako jedna z nielicznych nie opowiada historii wielkiego triumfu, ale przybliża proces upadku. Dzięki niej można dostrzec oznaki nadchodzącej katastrofy, a także zareagować na nie w odpowiednim momencie, nie dopuszczając do upadku własnego biznesu.
Collins poszukiwał odpowiedzi na pytanie nurtujące wielu przedsiębiorców - dlaczego upadają firmy, które odnosiły ogromne sukcesy. Na bazie dokumwntów takich firm jak Bank of America, IBM, Hewlett-Packard, Merck czy Motorola przeanalizował czy są jakieś wydarzenia, które zwiastują katastrofę i w jaki sposób można wpłynąć na tendencję spadkową oraz przekuć ją w sukces.
Podczas pracy odkrył pięć charakterystycznych etapów, które jego zdaniem przyczyniały się do upadku firmy. Pośród nich znalazły się: pycha będąca wynikiem sukcesu, chaotyczne sięganie po więcej, negowanie ryzyka i zagrożenia, rozpaczliwe szukanie ratunku oraz odejście w niebyt lub nieistotność. Uzyskane wyniki przybliżyły go do wskazania markerów poszczególnych etapów. Dla wygody czytelnika na końcu każdego rozdziału autor zebrał najważniejsze informacje, by łatwo można było wrócić do tych najistotniejszych. Na szarym tle wyszczególnia on również uniwersalne myśli, które warto zapamiętać.
Collins w książce wskazuje ważną regułę, że firmy bardzo często szukają winnych na zewnątrz. Wymieniają nieuczciwą konkurencję, słabą gospodarkę, strajki czy kryzysy oddalając przyczyny jak najbardziej od siebie. W wielu przypadkach jednak porażki mają źródło w działaniach liderów oraz pracowników. Dzięki zrozumieniu własnych działań oraz interpretacji poszczególnych markerów można ograniczyć ryzyko lub na nie zareagować w odpowiednim momencie. Badane przypadki wskazują na to, że niektóre przedsiębiorstwa mają szansę jeszcze się podnieść, a nawet stać jeszcze silniejsze niż przed kryzysem.
W ostatnim, ósmym, rozdziale Jim Collins przywołuje historię Xeroxa, który podnosi się pomimo bolesnego upadku. Dodaje, że widmo klęski bardzo często działa jak katalizator i przytacza słowa Dicka Clarka, dyrektora produkcji Merck, “Zmarnowanie kryzysu byłoby wielką stratą”.
Warto sięgnąć po tę lekturę, ponieważ jako jedna z nielicznych nie opowiada historii wielkiego triumfu, ale przybliża proces upadku. Dzięki niej można dostrzec oznaki nadchodzącej katastrofy, a także zareagować na nie w odpowiednim momencie, nie dopuszczając do upadku własnego biznesu.
November 15, 2009
This is a great gift in a small package and represents, in my view, the best of Collin's serial strong efforts. In a word, this book is fantastic. Why? Because it's conslusions are as piercingly insightful as always, but this book offers something new as well - it's wisdom works on both the institutional/organizational level and on the personal level. In other words, it's one of the few "business" books that's just as applicable and powerful a tool in a personal context.
In this book, rather than studying greatness as he had in his previous two classics of the business genre - Built to Last (with Jerry I. Porras) and Good to Great - Collins studies its contrast, failure. Specifically, he endeavors to divine why some companies/organizations fail, and, of these, why/how some recover and become even stronger than before. In so doing, he identifies a five-stage process of decline, a model in which the re-ascendant avoid the dreaded and irreversible fifth stage. I won't give away the stages, but suffice it to say that when you read about them, their relevance in personal assessment will be immediately obvious.
It's this dual applicability (i.e., on both the institutional and individual levels), in fact, that is the book's greatest contribution, though the 5-stage model is also compelling and uniquely useful. This being said, the book's not perfect (as none is). In particular, Collins could have dedicated more time/focus to describing the process of recovery and re-ascension. He addresses it, but not in great depth and primarily via three examples described not in the text of the book but in separate appendices at its end.
This is a minor quibble about an otherwise absorbing and insightful work. I recommend this book to anyone who is interested in either organizational or personal performance and suggest that we all adopt his suggestion to use its model as a sort of checkup, looking for markers (as he calls them, borrowing a medical term) of the stages to afford us the opportunity to choose to change proactively (and, thereby, to avoid a far more challenging and damaging trip through the stages). It's also not exactly light reading, but it is written more peppily than most business-oriented books, so readers more interested in the individual applicability aspects may be pleasantly surprised by its accessibility.
In this book, rather than studying greatness as he had in his previous two classics of the business genre - Built to Last (with Jerry I. Porras) and Good to Great - Collins studies its contrast, failure. Specifically, he endeavors to divine why some companies/organizations fail, and, of these, why/how some recover and become even stronger than before. In so doing, he identifies a five-stage process of decline, a model in which the re-ascendant avoid the dreaded and irreversible fifth stage. I won't give away the stages, but suffice it to say that when you read about them, their relevance in personal assessment will be immediately obvious.
It's this dual applicability (i.e., on both the institutional and individual levels), in fact, that is the book's greatest contribution, though the 5-stage model is also compelling and uniquely useful. This being said, the book's not perfect (as none is). In particular, Collins could have dedicated more time/focus to describing the process of recovery and re-ascension. He addresses it, but not in great depth and primarily via three examples described not in the text of the book but in separate appendices at its end.
This is a minor quibble about an otherwise absorbing and insightful work. I recommend this book to anyone who is interested in either organizational or personal performance and suggest that we all adopt his suggestion to use its model as a sort of checkup, looking for markers (as he calls them, borrowing a medical term) of the stages to afford us the opportunity to choose to change proactively (and, thereby, to avoid a far more challenging and damaging trip through the stages). It's also not exactly light reading, but it is written more peppily than most business-oriented books, so readers more interested in the individual applicability aspects may be pleasantly surprised by its accessibility.
March 26, 2021
This was my first dive into Collins' work. This was an interesting read as too often we focus on how companies are successful versus what led to their decline. There were times that this work was presented as an "apology" of sorts for reviewing now defunct companies in his previous works. Alas, that is the cycle of business: some are great and some fall.
The work outlined what should be the obvious five states of decline but are qualities I think we so often overlook. Success-induced hubris can lead to thirst for power and more success that cannot be sustained. Left unchecked, this can lead to a downward spiral that leads to overreaching to try to overcompensate, denial and/or passing the blame, or grasping for salvation which may potentially lead to more catastrophic choices. Through humility and willingness to see the whole picture, there is a possibility for salvation and bounce back.
As a small business owner, I found the work informative as I was able to reflect on my business and where it's at. I also found the appendix notes and (copious) citations for further reading and context quite helpful.
The work outlined what should be the obvious five states of decline but are qualities I think we so often overlook. Success-induced hubris can lead to thirst for power and more success that cannot be sustained. Left unchecked, this can lead to a downward spiral that leads to overreaching to try to overcompensate, denial and/or passing the blame, or grasping for salvation which may potentially lead to more catastrophic choices. Through humility and willingness to see the whole picture, there is a possibility for salvation and bounce back.
As a small business owner, I found the work informative as I was able to reflect on my business and where it's at. I also found the appendix notes and (copious) citations for further reading and context quite helpful.
March 20, 2018
I thought I was going to be disappointed when Jim Collins mentioned in his introduction that this was originally supposed to be the size of a magazine article and not a large expanded book. After reading it, I believe he hit a proverbial home run. The size is perfect for the content.
As I write this review, Toys R Us has declared Chapter 11 bankruptcy and is facing liquidation while General Electric, with a new CEO, is trying to recover. These two companies were in the forefront of my mind when I read this. What Collins wrote about his five stages is exactly what is happening with these two companies and will happen to more of them if they aren't aware of which stage they are in.
The fact that his five stages are applicable today for those who pay attention to business and watch as some companies rise and others fail, goes to show that it is a useful tool for current and future business leaders. Consequently, I have no choice but to give it a five star rating.
As I write this review, Toys R Us has declared Chapter 11 bankruptcy and is facing liquidation while General Electric, with a new CEO, is trying to recover. These two companies were in the forefront of my mind when I read this. What Collins wrote about his five stages is exactly what is happening with these two companies and will happen to more of them if they aren't aware of which stage they are in.
The fact that his five stages are applicable today for those who pay attention to business and watch as some companies rise and others fail, goes to show that it is a useful tool for current and future business leaders. Consequently, I have no choice but to give it a five star rating.
March 7, 2018
I am not a business graduate nor do I own a business, but reading about it did add to my existing perspectives. The references will obviously make more sense to a person who is in the respective field, but you sure can apply the same principles to anything that you are currently working on. Jim Collins creates space for life lessons among those meant for growing or in this case, saving a company.
This would be a great read for someone starting out as an entrepreneur, someone who has been in the industry for a good set of years or for some who has finished their own of cycle whether they worked for any company or owned one. The language is simple and the ideas well recorded and articulated. Collins has a lot to show for his work in terms of his research and case studies.
This would be a great read for someone starting out as an entrepreneur, someone who has been in the industry for a good set of years or for some who has finished their own of cycle whether they worked for any company or owned one. The language is simple and the ideas well recorded and articulated. Collins has a lot to show for his work in terms of his research and case studies.
December 25, 2017
This was an excellent look at how companies can fall from greatness to non-existence -- and what can be done to resurrect the company, if caught in time. As with Collins' other books, he draws on thorough research and presents his conclusions simply and compellingly.
In addition to leadership/management nerds, this book would be of interest to anyone interested in "success" or "failure" writ large, as many of Collins' conclusions are transferable outside of business to life: your church group, soccer team, sewing circle, etc.
In addition to leadership/management nerds, this book would be of interest to anyone interested in "success" or "failure" writ large, as many of Collins' conclusions are transferable outside of business to life: your church group, soccer team, sewing circle, etc.
November 3, 2019
For a book that promises data and research-based analysis of corporate performance, this was really thin on that, and generally useless. Additionally, in the cases used where I knew a reasonable amount due to other books, research, or firsthand experience, the analysis was incorrect (mostly due to having only very superficial data). This feels like the author milking a (dumb to begin with) franchise for more money.
May 17, 2023
A fantastic follow up to "Good To Great".
Jim Collins explains in this book how no company is impervious to failure - especially those that at one point become great.
The study in this books shows how an attitude of arrogance born out of previous success, combined with the loss of discipline in decision-making are the key for any success story to turn into a case study of failure.
Jim Collins explains in this book how no company is impervious to failure - especially those that at one point become great.
The study in this books shows how an attitude of arrogance born out of previous success, combined with the loss of discipline in decision-making are the key for any success story to turn into a case study of failure.
September 28, 2012
Wonderful!
January 25, 2013
പഴയ പാമ്പു കഥ തന്നെ ...
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