How the Mighty Fall – Jim Collins

When I opened this book for the first time, I prepared myself mentally to be bored to death reading about companies that I had probably never heard of or thought twice about. Companies come and go and I had always assumed it was just part of the natural order of a world in which only the strong survive. Never thinking twice to analyze the reasons for their decline, or the steps that could have been taken to halt or reverse it. Having finished the final chapter of Collins book, my mind churns in thought about what companies today could be entering one of the 5 stages of decline. Do they even realize it? Have the CEO’s read this book? Is my 401K invested in any of them? Collins did an excellent job of analyzing the companies and identifying causes of both their rise to greatness and the fall from it. I, along with any CEO, could learn from this book and be able to look at a company from a new perspective and take measures in order to avoid possible decline.

What’s interesting about hubris is that you don’t see it coming or know it’s there until you look at your situation through hindsight’s microscope. A company at the top of its game and feeling unstoppable justifiably feels that any new ventures embarked upon will generate success followed by more success and so on. But Collins teaches us that there is nothing set in stone to guarantee that success. Without careful research and planning new ventures could collapse an entire organization. Just as detrimental is the unwillingness to transform as industries grow and revolutionize. Hubris can lead to a false comfort zone where you feel insurmountable even as competition stiffens, industries modernize and finances deteriorate.

Stage one seems like it would naturally lead to the pursuit of more. But what is most dangerous about stage two is the lack of discipline. Companies that are successful should crave more expansion and more profits; however, there has to be a disciplined strategy rather than...