Read this article on my blog.
Jim Collins’ latest book, How The Mighty Fall: And Why Some Companies Never Give In, is his best yet. His data-driven approach to business analysis is refreshing in a genre dominated by anecdotal, “common sense” approaches. Collins identifies five stages in the fall of once great companies, and as in his previous studies, he compares the fallen companies to similar companies in the same industry that did not fall, effectively demonstrating that decline was due to choices made by the business leaders, not to market forces outside their control.
Rather than summarize the five stages and fail to do them justice, I will just say this: Read this book. Anyone who leads an organization can benefit from its insights. The biggest surprise was finding that companies rarely fall from doing nothing. Instead they enter a period of frenetic activity characterized by innovation, restructuring, re-inventing, and loss of connection to core values. The key seems to be the loss of cohesive vision. A company that recovers its vision can often pull out of its dive and return to greatness.