Falling or Flying: What’s Your Company Doing?

Falling or Flying: What’s Your Company Doing?

Enron. AIG. Circuit City. Greece. We’ve all seen the news and know the fallout of a company (or country) that is failing. But it’s not always the money—or lack thereof—that leads to a company’s demise; oftentimes, the underlying factor is the leadership.

During a recent simulcast of the Chick-Fil-A Leadercast, author Jim Collins outlined these insights from his new book “How the Mighty Have Fallen” detailing the “Five Stages of Falling Companies” as:

• Stage 1: Hubris Born of Success
  Hubris (or pride) allows leaders to overestimate their competence, leading to arrogance
• Stage 2: Undisciplined Pursuit of More
  This unbridled desire for “more”—more work, more money, more benefits/perks—stretches a company’s resources and staff thin.
• Stage 3: Denial of Risk and Peril
  Overlooking the warning signs can make a company’s leaders miss the edge of a cliff before it’s too late.
• Stage 4: Grasping for Silver Bullet Solutions
  Having stepped over the edge, a company’s leaders look for anything to save themselves, from “quick fix” hit products to flashy marketing.
• Stage 5: Capitulation
  Hitting the bottom means a company is no longer relevant to its audience, rendering it as failed.

What Collins does best is not dwell on the falling but on what can start a company flying again. He reminded the audience that “most overnight successes are 20 years in the making” and offered these insights for building great leadership:

• “Good is the enemy of great.”
  One of the best tasks we can do is create a “not to do” list to keep us focused on what really matters—for our companies, our staff, and our resources. Little decisions matter.
• “Humility is the difference between good and great leaders.”
  The signature characteristic of the greatest executives is their humility. Their passion was for the company, the cause, the ideas and deflecting praise from themselves to their team.
• “Great leaders have the discipline to confront the most brutal facts.”
  As leaders, we should surround ourselves with good people who are not afraid to tell us the cold, hard truth, while being receptive to receive the truth and respond accordingly.
• “Greatness is never built with a single event or leader.”
  It’s about preserving the core values of your company to stimulate progress. Below is a diagram of the Hedgehog concept—finding the intersection of our passions, our skills, and the drivers for business.
  
• “Stand firm in your belief that you will prevail in the end.”
  Yes, we all make mistakes and our companies can suffer for them. But great leaders know how to steer the ship through stormy weather and see the land ahead.

Trust in your values, your team, and your vision to bring you bring your company from falling to flying.

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