The Impact of Pride on Business Success
Jim Collins wrote a great book called Good to Great, one of the best-selling business books this century. If you have not yet read it I strongly recommend you do so. Many people don’t know that Collins went on to write another book called How the Mighty Fall about corporate failure. If you think your business is successful because of how fantastic you are, then this book is a must read.
Collins wrote How the Mighty Fall after facilitating a leaders forum when, during a break, the CEO of a highly successful company asked him how he would know if, despite his company’s current success, it was actually heading for decline. Collins then spent the next four years researching why great companies often lose their way and decline.
In this book Collin’s maintains that because you are currently successful there are no guarantees that you will remain successful. He warns the decline comes when businesses start to believe that they deserve and are entitled to their success. Being in the right place at the right time (luck) plays a huge part in being successful and needs to be acknowledge and understood by business leaders.
Collins identified five step-wise stages of decline:-
Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death
By understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom. Great companies can stumble, badly, and recover.
No matter how stable or great an institution might be it is vulnerable to decline. Declining companies often continue to implement strategies that made them successful thinking they will continue to work, even when conditions around them are changing.
Decline does not have to be a permanent state and usually there are many measures a company can take before it reaches a point of no return. Collins maintains that decline is largely self-inflicted, and the path to recovery lies largely within our own hands. Never give in and be willing to change tactics. Never give up on your core purpose. Be willing to kill of failed business ideas and even close big operations when they fail to produce results.
If you would like to learn how to improve your strategies and tactics contact Andrew Russo now in our Adelaide office on 08 8373 5588 or follow the links below to find the expert nearest to you.