“I’ve come to see institutional decline like a staged disease: harder to detect but easier to cure in the earlier stages, easier to detect and harder to cure in the later stages.”
Author Jim Collins from his book “How the Mighty Fall: And Why Some Companies Never Give In”
11:40pm, April 14th, 1912, three bells sound.
“Iceberg, straight ahead!”
The First Officer gives the command “hard-a-starboard”, but it’s too late.
The RMS Titanic strikes the iceberg and begins to sink. Hours later countless lives are lost.
How did this happen?
If it had been almost any other boat in existence, this wouldn’t have happened.
This tragedy could have, and should have, been prevented. The Titanic had been dubbed unsinkable, so there weren’t enough lifeboats on board for all of the passengers. In addition, reports of icebergs in the vicinity hours earlier had been ignored. This is the very same sort of arrogance, and denial of common sense, that author Jim Collins says happens every day in business.
Before tragedy hits your organization, you should be on the lookout for the predictable pattern that often traps companies, and ultimately leads to their doom.
The Fact is – if you’re lucky, your company is or has been successful.
The Problem is – in many cases, this success can create a sense of invincibility and false optimism that can ultimately erode the foundation of your company.
The Outcome is – a culture that falsely believes success will continue indefinitely. Ego begins to take over from common sense on key business decisions.
The Solution is – to constantly monitor your organization for signs of overconfidence, and a decline in the rigour with which you made decisions in the past.
Like those at the helm of the Titanic, it’s easy to believe your company is too great to succumb to failure. Collins argues, however, that this sort of mentality is exactly what gets companies into trouble. Perhaps Intel Chairman Andy Grove had it right when he said “only the paranoid survive”.
Remembering that Collins is also the author of “Good to Great”, it is important to note that great organizations were the by-product of humble, company-focused Level 5 Leaders. In the “fallen” companies, Collins found that they lacked any Level 5 Leadership whatsoever.
The Beacon Group’s Key’s to Recovery and Renewal …
Strive for Greatness – If your organization has strayed from its roots, take time to ensure your leaders have the best interests of the company in mind, that you have selected the very best people, and that you focus on the things you can do better than anyone else.
Don’t Read Your Own Press – While success is never a bad thing, don’t let it go to your head. There is always another company out there trying to unseat you. Worse yet, poor decisions and internal laziness can cause your own downfall.
Have Plenty of Lookouts – If you have the right people, at all levels in your company, they will keep their eyes on the horizon, constantly on the lookout for “icebergs” that may harm you. Trust them when they bring items to your attention. The more eyes you have looking for trouble, the less likely you will be to run into it.
What are the mindsets and practices of excellent CEOs? That is the question posed by McKinsey, and I’m sure you will be most interested