Read the book, but skip over its half-hearted claims of rigor and go straight to the sage advice. You have 1 free article s left this month. You are reading your last free article for this month. Taking risks is something all business leaders will have to contemplate in their careers, especially when their business is struggling. Will the consequences severely hurt the company or will we be able to recover? A good way to understand what risks are worth taking is to consider the waterline principle.
Whether the hole is above the waterline, where repairs can be made, or below it, where water will rush in and sink you, depends on the decision you make. You need to ensure that you only take risks whose damage you can repair, never those that will sink your boat. The general rule of thumb is to never make sweeping changes to how you do things. Risking massive alterations to your business strategy will only lead to instability and lack of focus. Remember HP: it hired a new CEO who made extensive changes to its culture and image, but the changes only led to stuttering performance as the company lost its business discipline.
Instead of making big changes, you need to take small steps. If you have to take a risk, make it a small, manageable risk. Companies in dire straits often feel this way, too, seeing surrender as the only option to their plight. That is: if they act the right way.
The first thing business leaders must do to reverse decline is adopt the right attitude. Winston Churchill is a great example of someone who believed in himself when no else did. Everybody thought he was a spent force. Yet Churchill never gave in and, at the start of the next decade, he was the British prime minister and a war leader. The rest, as they say, is history. Photocopying company Xerox did just that when they realized just how deep the trouble was that they were wading in: their stock value had dropped an incredible 92 percent in less than two years.
Any company, no matter how big and powerful, can experience failure and decline. To avoid this, leaders must stick to good business practices, try to stay calm, and continue to do what the company does best. How the Mighty Fall Key Idea 1: Every company and institution, no matter how great, is vulnerable to decline.
But what causes decline? What can make a huge entity come crashing down? Remember how everybody had a Nokia phone 15 years ago? How the Mighty Fall Key Idea 2: After experiencing great success, companies become arrogant and tend to succumb to hubris. You may or may not be familiar with Greek tragedy. A success which led to massive overconfidence and big mistakes.
Losing this main area of business hit the company hard, and it eventually went to the wall. How the Mighty Fall Key Idea 3: Companies can lose their focus if they chase unsustainable levels of innovation and growth.
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. Mar 06, dreamingatmydesk rated it liked it. 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 I am not a business graduate nor do I own a business, but reading about it did add to my existing perspectives.
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. Dec 25, George rated it it was amazing Shelves: management-self-improvement. 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.
Feb 11, Jose Miranda-alvarez rated it it was amazing Shelves: fiction. 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. Apr 07, Matt Bordenet rated it really liked it Shelves: professional. Entertaining read. Great cautionary tales to help combat hubris creep.
Jul 27, Serene rated it really liked it Shelves: it-s-all-about-the-money. Leaders lose sight of the true underlying factors that created success in the first place -One of the most insidious forms of hubris is arrogrant neglect.
Distracted by extraneous threats, adventures and opportunities, leaders neglect a primary business, failing to renew it with the same creative intensity that made it great in the first places Stage 2: Underlying Pursuit of More -Companies stray Notes: The Five Stages of Decline Stage 1: Hubris Born of Success -Success is regarded as an entitlement. Distracted by extraneous threats, adventures and opportunities, leaders neglect a primary business, failing to renew it with the same creative intensity that made it great in the first places Stage 2: Underlying Pursuit of More -Companies 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 -Any enterprise that becomes complacent and refuses to change or innovate will eventually fall.
Colins' analysis, however, showed that overreaching pursuing outsized growth much better explains how the once-invincible self-destruct Stage 3: Denial of Risk and Peril -Internal warning signs begin to mount, yet external results remain strong enough for leaders to discount negative data. Those in power start to blame external factors for setbacks rather than accept responsibility -Deterioration in gross margins, current ratio or debt-to-equity ratio indicates an impending storm -The enterprise chronically reorganizes, which can create a false sense of doing something productive.
Companies are always in the process of reorganizing themselves, but when an enterprise is in denial when it responds to data and warning signs with reorganization as a primary strategy Stage 4: Grasping for Salvation -The enterprise is thrown into a sharp decline visible to all and the leadership responds by lurching for a quick salvation with a visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, or any number of other silver-bullet solutions -This can produce a brief improvement, but the results do not last Stage 5: Capitualtion to Irrelevance or Death -Accumualted 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 All companies go through ups and downs, and many show signs of Stage 1 or 2, or even Stage 3 or 4, at some point in their histories.
Yet Stage 1 does not inevitably lead to Stage 5. The path to recovery lies first and foremost in returning to sound management practices and rigorous strategic thinking. Sep 17, Geo Paul rated it liked it. This review has been hidden because it contains spoilers. To view it, click here. Quotes I liked: 1. I wondered, What could I possibly teach this esteemed group about America?
Every institution is vulnerable, no matter how great. There is no law of nature that Quotes I liked: 1. Bill Gore, founder of W.
Think of being on a ship, and imagine that any decision gone bad will blow a hole in the side of the ship. But if you blow a hole below the waterline, you can find yourself facing gushers of water pouring in, pulling you toward the ocean floor. To be clear, great enterprises do make big bets, but they avoid big bets that could blow holes below the waterline. When making risky bets and decisions in the face of ambiguous or conflicting data, ask three questions: 1. Can you live with the downside?
The point of the struggle is not just to survive, but to build an enterprise that makes such a distinctive impact on the world it touches, and does so with such superior performance, that it would leave a gaping hole—a hole that could not be easily filled by any other institution—if it ceased to exist.
To accomplish this requires leaders who retain faith that they can find a way to prevail in pursuit of a cause larger than mere survival and larger than themselves , while also maintaining the stoic will needed to take whatever actions must be taken, however excruciating, for the sake of that cause.
This is the very type of leader who finds a path out of the darkness and gives us well-founded hope. And it is to that type of leadership that we now turn. Mar 22, Louis rated it really liked it. Collins nicely describes the 5 phases of decline for a company: Stage 1: Hubris Born of Success Stage 2: Undisciplined Pursuit of More Stage 3: Denial for Risk and Peril Stage 4: Grasping for Salvation Stage 5: Capitulation to Irrelevance or Death He reviews companies that have passed through these phases, and attempted to turn it around but failed, but more importantly those that took the proper steps to stop their decline and remained solvent.
Laser focus on change, reinvention, and shaking things up, usually accelerating their demise. They forget the basics, they go for the hail-mary pass, only to fumble in their final play. It really stands out as a drastic difference from those companies that shift to getting back to basics and just fix the underlying problems.
Maybe not as dramatic, but more important. This book made what could have been a very dry topic very interesting. If you work at a large company, this is a fascinating read if your own company ever hits rough waters. Look for the clues here on if your executives are taking the proper steps to salvage a sinking ship.
Mar 12, Wes F rated it liked it. Another insightful business book by Jim Collins, with a focus on the causes behind great companies who have fallen--some into non-existence, some into bankruptcy, some into irrelevance, some into the history books of ignominy. These 5 phases of going from Great to Naught can happen slowly over many years, or can happen in a flash e.
Lehman Bros in the Crash of And, some have been able--over time--to bounce back. Nov 27, Vivek Gupta rated it liked it. I would recommend the book. Jun 02, Heng rated it really liked it. A company is a dynamic thing. It is always changing and not always changing for the good. It's a book that uses about a third of the pages for appendixes and notes, also it gives a summary of his other book in the appendixes. His theme is his own hedgehog concept: be extremely disciplined in all aspects, be grounded, willing to be boring but has to be solid.
It is really nice that his books are around those major ideas. I like Collins' perspective that the root cause of the company's failure sho A company is a dynamic thing.
I like Collins' perspective that the root cause of the company's failure should be analyzed from the inside, pointing at the mirror, not the window. Another point that I like is that the justification of the existence of a company should be external, whether the company is making the world a better place, and whether the company is providing value to the market. If the answers are no, maybe the company should fail and we should just let it fail.
I just give this book 4 stars because the data and details does not seem to be as meticulous as his previous projects. For example : - For a company to leap from Good to Great, first they need to get the Right people on the bus and after that considering where they're going.
So why a mighty company fall? Because the Right people get off the bus, and the Leader of that company picked the wrong one to derive the succession of power. That's not to say that this's not a good book, it's just to easy to catch the whole idea of each stage in 5 stages, so it's not interesting and astonishing as you might expect.
Apr 30, bibliothekathome rated it really liked it. Basically he had a look on the performance of companies and selected 11 good and bad ones which are identical in terms of playing in the same market. Then Collins puts 5 stages where companies pass through their death. Actually I liked the way he is analyzing companies and for me the study is based on a bunch of data which is carefully selected. Nearly half of the book consists of data and the other half explaining 5 stages of decli After Turning the FlyWheel, this is my second Jim Collins book.
Nearly half of the book consists of data and the other half explaining 5 stages of decline. 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. Search for a book title or author. How the Mighty Fall Jim Collins.
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