How the Mighty Fall is one of my most treasured business books. It’s a Jim Collins classic.
The central idea is that companies (even great ones) can and do fall.
The book emerged from his curiosity. How did those who were once invincible, slip from dominance to irrelevance?
It’s an intriguing idea. You’re strong today. Gone (or irrelevant) tomorrow.
Collins calls it the ‘silent creep of impending doom’. He likens it to a disease like cancer. A disease that begins to grow on the inside while you still look strong and healthy on the outside.
The difference he concludes is that organisational decline, unlike cancer, is largely self-inflicted.
It’s something we do to ourselves!
This book is preventative medicine for leaders. It’s why I can never read it often enough.
It reminds me that vigilance (Collins calls it Productive Paranoia) is one of a leaders most valuable attributes.
He identifies 5 Stages of Decline. The early stages are hard to detect but easier to cure. The latter stages are the opposite. Easier to detect but much harder to cure.
Stage 3 interests me the most – the Denial of Risk and Peril.
Here leaders fail to act on key messages and alarm calls.
Negative signals from the workplace and marketplace are discounted. Positive data gets spun and amplified. Setbacks are blamed on others.
What fascinates me is how the Executive Culture enables this.
In Collins’ words …
Here’s where it gets real.
He offers 8 indicators that the Executive Culture is in decline. Here they are …
Teams on the way down
- People shield those in power from grim facts, fearful of penalty and criticism for shining light on the harsh realities.
- People assert strong opinions without data, evidence, or a solid argument.
- The team leader has a very low questions-to-statements ratio, avoiding critical input and/or allowing sloppy reasoning and unsupported opinions.
- Team members acquiesce to a decision yet do not unify to make the decision successful, or worse, undermine the decision after the fact.
- Team members seek as much credit as possible for themselves yet do not enjoy the confidence and admiration of their peers.
- Team members argue to look smart or to improve their own interests rather than argue to find the best answers to support the overall cause.
- The team conducts “autopsies with blame,” seeking culprits rather than wisdom.
- Team members often fail to deliver exceptional results, and blame other people or outside factors for setbacks, mistakes, and failures.
Do you recognise any of these in your team? If so it’s a sign.
An alarm call if you like. Something to urgently attend to and to act upon.
If it’s the team at the top that’s on the ‘way down’ there’s a lot at stake.
The silent creep of mediocrity begins at the top. The ripples of dysfunction make their way into every corner of the organisation.
Seeds of decline are sown in its wake.
It’s why building a healthy organisation – which always starts with the team at the top – is not a nice to have.
It’s mission critical.
Collins also offers 8 indicators for “Teams on the Way Up”.
This is a helpful and practical guide to what a healthy Executive Culture looks like.
You can download both here.
Ultimately How the Mighty Fall reminds me of two important things:
- No company has an automatic right to exist. That right is earned daily. In the end, it’s the marketplace that decides.
- Decline is not inevitable. It is rather, as Collins reminds us, largely self-inflicted. It’s a function of the choices we make, the things we tolerate and the actions we fail to take.
How is your Executive Culture?
Is your team on the way up or the way down?
It’s vital that you know the answer!
- Sean Summers / Biznews interview: Sean is the recently appointed CEO of Pick n Pay. In this telling interview he talks about how this once great company lost its way and what it needs to do to find its way back. Watch here.
- I worked with Jim Collins when How the Mighty Fall was published. Don’t miss the interview I did with him. Click here to read.
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