Jim Collins on Falling

You don’t visibly show your decline until stage four.  Like a cancer, it’s hard to detect but easy to cure early.  Conversely, easy to detect but hard to cure later.

Stages of Decline

  1. Hubris Born of Success.  Outrageous arrogance to believe that our success is not at least in part from luck or outside blessings.  The great level five leaders of Kimberly Clark, Xerox, and Southwest Airline are remarkably humble, and sacrificial of themselves for the good of the company.  Humility is the key that separates level four from level five leaders.
  2. Undisciplined Pursuit of More.  Too much growth, too much expansion, too much risk.  If your growth surpasses your quantity of right people, you will fall.  Need data, not just opinions.
  3. Denial of Risk and Peril.  Ignoring feedback we don’t like.  Minimizing the risks.  There needs to be a high question-to-answer ratio for teams to work.  Don’t move forward if you don’t answer the questions.  Faith and facts must go together – never lose your faith in the future, but use your faith to face the brutal facts head on.
  4. Grasping for Salvation.  The peril denied in stage three now takes you.  It’s obvious you’re falling.  Organizations start looking for a silver bullet – new leader, new presentation, new product.  Instead of returning to areas of established intelligence, or looking to leaders raised within, they look to import answers.  Look for 5-10% improvement annually – it doesn’t happen any other way.
  5. Capitulation.   Organizations can come back to greatness from late stage four, but not stage five.  At stage five, you’ve fully expend financial and relational capital; all opportunities available to you. 

Drive to endure – if success or money is enough for you, you won’t face the difficult long-term decisions that will make an enduring impact. 

The most enduring business aren’t as worried about the business end as they are their core values.  Don’t be unwilling to change.  You need change.  But never walk away from your values.  Preserve the core, but stimulate progress.

What to do

  1. Do your diagnostics.  Free tools are available and jimcollins.com
  2. Count your blessings.  When you begin to account for all the good things that happen to us, success that you did not cause, you will stay humble.
  3. What is your question to statements ratio?
  4. How many key seats are on your bus?  How many key seats are vacant?  What is your plan to fill all your seats?
  5. Create an inventory of the brutal facts with your key team.
  6. Have a stop doing list.  Culture of discipline is not just about what you do.  It matters most what you choose not to do.
  7. How can you demonstrate clicks on the fly wheel?  Know what you’re measuring.
  8. Double your reach to young people – change your practices without changing your values.
  9. Set another Big Harry Audacious Goal to illustrate you’re never done.
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