How The Mighty Fall

After “Built to Last,” which studied the practices of companies that managed to achieve outstanding performance over exceptionally long periods of time, and “Good to Great,” which drew lessons from companies that made spectacular leaps in performance, Jim Collins now takes a look at those which, at the peak of their glory, suddenly collapse.
Far from concluding that this fate is inevitable, this book draws upon four years of research to make recommendations that any company can use to avoid a similar misfortune. The trick is to identify the signs of decline sufficiently early, in order to react before it is too late. The author identifies five successive phases of decline, each requiring a different response. The first is characterized by the arrogance that comes with success, which many will easily recognize. Who doesn’t know people or organizations that seem to believe they are invincible because they have never experienced failure? This is followed by a desire to aim ever higher, pushing companies to grow bigger and bigger until they finally lose control. Then comes denial of impending risk. Isn’t sticking your head in the sand the best way to avoid fear? Surely some sort of savior will come along to pull the company out of the fire, e.g., a charismatic leader, a reassuring miracle project, etc. But do these silver bullets really do the trick? And finally comes capitulation.
A simple little book that is pleasant to read, whose warnings will resonate, along with the conviction that something can be done to avoid this death spiral.