1. How the Mighty Fall
and why some companies never give in
Jun 15, 2012
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2. Background…..
• Jim Collins and team researched and published
the first two books –
• Built to Last: Successful Habits of Visionary
Companies
• Good to Great: Why Some Companies Make
the Leap... and Others Don't
• Some of the companies cited in Good to Great
went bankrupt
• Started a research paper on cause for that –
which became the third book – “How the
Mighty Fall….”
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3. Silent Creep of Impending doom
Fall of the Mighty
•Bank of America
•Motorola
•Addressograph
•Ames How would you know?
•Circuit City
•Merck
•Rubbermaid
•Scott Paper
•Zenith
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5. Hubris Born of Success
•Success entitlement, Arrogance
•Neglect of Primary Flywheel
•“What” replaces “Why”
•Decline in Learning Orientation
•Discounting the role of Luck
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6. Undisciplined Pursuit of More
•Unsustainable quest for growth
•Undisciplined discontinuous leaps
•Missing “Right” People
•Cash Erosion
•Bureaucracy
•Problematich Succession to Power
•Personal Interest above Org interest
Augustus Ceasar
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7. Denial of Risk and Peril
•Amplify positive, deny negative
•Big bets/bold goals lacking validations
•Huge downside risk on ambiguous data
•Erosion of healthy confrontation
•Externalize Blame
•Obsessive reorganizations
•Imperious Detachment
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8. Grasping for Salvation
•Series of Silver Bullets
•Grasping for a Leader-as-savior
•Panic and Haste
•Radical Change
•“Revolution” with Fanfare
•Hype Precedes Results
•Initial upswings followed by failures
•Confusion and Cynicism
•Chronic Restructuring
•Erosion of Financial Strength
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9. Capitulation to Irrelevance or Death
•Run out of cash
•Debt Mounts to unmanageable level
•Bankruptcy/Sale/Close down
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10. Well Founded Hope
•Ability to comeback
•Most important – Great team needed
•Level 5 leadership
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