Jim Collins, nationally acclaimed business thinker, serves as a teacher to leaders throughout the corporate and social sectors. Author of the best-selling books Good to Great and Built to Last, he is a student of companies—how they grow, how they attain superior performance, and how good companies can become great companies. His writings, based on groundbreaking research, have been featured in Fortune, BusinessWeek, The Economist, USA Today, and Harvard Business Review. His latest volume, How The Mighty Fall: And Why Some Companies Never Give In, looks at common mistakes of organizations in a state of decline and what leaders can do to reverse negative patterns and flourish anew.
Notes
- Good is the enemy of great.
- Greatness is not a matter of circumstance. Greatness is a matter of conscious choice and discipline.
- To be a great society we must have great organizations in all sectors
- Studied great companies that fell.
- Anyone can fall.
- Found that the mighty fall through a series of stages.
- Just as with health, an organiation can look healthy on the outside but be sick on the inside.
- 5 Stages of decline
- Hubris born of success
- Undisciplined pursuit of more
- Denial of risk and peril
- Grasping for salvation
- Capitulation to irrelevance or death
- Unlike disease, organizational fall is largely self-inflicted.
1) Hubris born of success
- Success does not lead to the fall, but outrageous arrogance.
- Bad decisions taken with good intentions are still bad decisions.
- Examples:
- Darwin Smith, Kimberly Clark, “charisma bypass”
- Anne Mulcahy, Xerox, very charismatic, claimed to be an accidental CEO
- Herb Kelleher, Southwest Airlines, not normal. But would have died for Southwest and its people
- What do they have in common? It’s not about them, and they never, ever give up.
- They are level 5 leaders.
- What separates level 5 leaders from level 4 leaders is humility.
2) Undisciplined pursuit of more
- Overreaching is what brings down the mighty.
- How do you know when you’re overreaching?
- Breaking Packards Law. If you grow faster than you can bring in the right people you will fall.
- First get the right people on the bus, get them in the right seats, then figure out where to drive the bus.
3) Denial of risk and peril
- When a culture of denial takes hold, an organization is fully in stage 3.
- At this stage you look great, so its easy to deny.
- Published guide includes contrasts between organizations on the way up vs those on the way down. Check it out.
- Stockdale paradox (named for Admiral Stockdale)
- He never got depressed because he never wavered in his faith, not only that he would get out, but that I was in the defining time of his life.
- Who didn’t make it? The optimists, the people who said they would be out by Christmas but weren’t. They died of a broken heart.
- Never confuse faith and facts. Never give up faith, but never deny the facts.
4) Grasping for salvation
- Looking for the silver bullet, the leader that could bring salvation.
- Greatness is never a silver bullet or a single break-through.
- Greatness comes from the flywheel effect. Disciplined people taking disiplined steps in the same direction.
- If you become a 10% better leader every year, you’ll be 6.7 times better in 20 years. It doesn’t happen any other way.
5) Capitulation
- You can go into late stage 4 and still rise again, but once you get to stage 5 its over.
Looking at the opposite of capitulation…
- In 1989 selected 18 companies for built to last, all are still stand-alone companies today.
- Why are they still standing and strong? Because they had a reason to endure the struggle.
- If it’s just success or money it’s not enough.
- If you measure your success by money, you always lose.
- What would be lost if we disappeared?
- Separate what you stand for from how you do things.
- The signature of mediocrity is not the inability to change, it’s chronic inconsistency.
- The key to any great system is preserving something core AND stimulating progress.
10 To Dos
- Do your diagnostics. Check out the good to great diagnostic tool at JimCollins.com
- Count your blessings. Literally, count them in a spreadsheet, and do not stop until you get to at least 100. When we begin to account for all the good things that have happened to us that we did not cause, it’s humbling.
- What is your questions to statements ration, and can you double it in the next year. The best leaders know they don’t know the answers so they ask the right questions.
- What are the key seats on the bus? How many are open? How will you fill them with fantastic people?
- Do the way up way down from the booklet.
- Create an inventory of the brutal facts.
- Create a stop doing list.
- Define results and show clicks on the flywheel or milestones.
- Double your reach to young people by changing your practices without changing your core values.
- Set a BHAG
More…
- Peter Drucker wrote 2/3 of his books after 65.
- Never, ever give up on your core values.
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