Report from World Business Forum, New York
Published on: Tuesday, October 05, 2010
Early Diagnosis and Intervention Leads to Organizational Longevity
"Those who achieve success are not bound by their own story; if you want to predict the future, you create it," said Dow Jones & Company CEO Les Hinton during his introduction of Jim Collins at the World Business Forum, where ExecuNet exclusively reported for attendees. Business is what's ahead, not behind, yet Collins' research in Good to Great, Built to Last
and How the Mighty Fall: and Why Some Companies Never Give In
looks back to determine the characteristics that give companies staying power.
"The answer could not be circumstance. It is first and foremost a matter of conscious choice and discipline," said Collins. "We became fascinated with how great enterprises stumble and how the mighty fall. We wanted to understand how this happens, and it was scary how far they fell."
Collins equates the demise of a company to declining health from disease. Symptoms become increasingly evident and recovery is possible — until Stage 5, where the condition is terminal.Stage 1-Hubris born of success:
"Bad decisions taken with good intentions are still bad decisions," said Collins and the antidote is for leaders to have a special brand of humility and extreme ambition for the cause - not themselves. Stage 2-Undisciplined pursuit of more:
"Everybody loves you for your overreaching until you fall," and Collins warned that great enterprises are more likely to die of indigestion than starvation.Stage 3-Denial of risk and peril:
Never mistake faith for facts, as the optimist is at risk of dying of a broken heart.Stage 4-Grasping for salvation:
Even with the aid of a heroic leader on a white horse or a game-changing magic bullet, many companies still fail in this stage. The antithesis, said Collins, is building a culture of discipline, by consistently pushing in an intelligent direction without stopping. "There's not one big push, but overnight successes are about 20 years in the making."Stage 5-Capitulation to irrelevance or death:
Companies can fall into late stage 4 and come back when leaders emerged and broke the cycle of despair, but you cannot come back from stage 5, warned Collins. "Would we leave an unfillable hole if we left the planet? If you don't have the answer, you will go away.
"Every truly great company had a set of values not open to negation - not defined by what you do but what you stand for. The signature of mediocrity is not a resistance to change but chronic inconsistency of values, purpose or some overall idea."