Unlike his previous book ‘Good to Great’, Jim Collins examined how big, great and successful enterprise might fall, what dynamics or markers that drive to complete failure and total collapse. Mr.Collins discussed five stages of gradual, unnoticed, yet fatal free fall to failure. It starts with success arrogance or what he refers to as “Hubris Born of Success“, which cultivates a culture of “Undisciplined Pursuit of More” in non-organized or disciplined planned manner.

Collins noted that companies will sooner get into the third stage of falling; labeled as “Denial of Risk and Peril“, which I like to call the stage of Total Deliberate Blindness! it’s the stage where risks are absolutely obvious, yet, the organization leaderships tend to not see it, no matter how obvious are the warning signs.

It’s at stage four of “Grasping For Salvation” when a visible free fall and “sharp decline” drags enterprises. It’s at this stage, Collins noted, that companies like Xerox have to take courageous decisions to revive. Failing to do so, will bring enterprises to the final stage of “Capitulation to Irrelevance or Death“, Collins indicated.

In this book, Collins discussion of these five stages is insightful and stand as roadmap for organizational self awareness, nonetheless, and as one of the commentators at BusinessWeek noted, these stages could have a “mystical” nature instead of analytical. Public audience still argues whether nowadays economists can still predict, correctly and precisely, the future of corporate and financial world. Nonetheless, I tend to personally believe that the global turmoil had changed the rules of the game, and corporate leadership has to thoroughly examine and watch such warning signs before the worst of nightmares come true.

Collins’ Five Stages of the Mighty Fall are:

Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping For Salvation
Stage 5: Capitulation to Irrelevance or Death

BusinessWeekHave a look to this interesting exert about Collins book at BusinessWeek , or listen to the podcast. Just Click here.

Cheers!

Mouaz

How the Mighty Fall: A Primer on the Warning Signs
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