Book Notes - How The Mighty Fall

How The Mighty Fall: And Why Some Companies Never Give In - Jim Collins

Stage 1 - Hubris Born of Success
+ Neglect of a Primary Flywheel - flywheel concept
+ What Replaces Why
We're successful because we do these specific things
vs
We're successful because we understand why we do these specific things and under what conditions they would no longer work.
+ Decline in Learning Orientation - the organization stops learning together

Stage 2 - Undisciplined Pursuit of More
+ Leaders who fail the process of succession set their enterprises on a path to decline.
+ Declining proportion of right people in key seats
+ Easy cash erodes cost discipline

Stage 3 - Denial of Risk and Peril
+ Waterline principle - boat, what is above and below - below isn't visible but will sink you
+ Discount the negative - explain away the data
+ Erosion of healthy team dynamics
+ Obsessive reorganizations - preoccupied with internal politics rather than external conditions

Stage 4 - Grasping for Salvation
+ The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.
+ Looking for a series of silver bullets
+ Grasping for a leader-as-savior
+ Confusion and cynicism

Stage 5 - Capitulation to Irrelevance or Death
+ You can be profitable and bankrupt.
+ Organizations do not die from lack of earnings. They die from lack of cash.

Well Founded Hope
"A crisis is a terrible thing to waste." - learn from the decline
The right leaders feel a sense of urgency in good times and bad.
Failure is not so much a physical state as a state of mind; success is falling down, and getting up one more time, without end.

Go ahead and grade yourself.
+ What does your team or org do to learn together?
+ Can you explain what you do versus why you do it and what conditions will make you irrelevant?
+ What do you do with negative data?