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Jim Collins – How the Mighty Fall – Day 3

Loving Jim’s book, How the Mighty Fall.

The interesting point of this book for me has been realizing that as a whole, our company is doing very well in the areas that Jim outlines. However, as you compartmentalize some of our business segments, you can see elements of How the Mighty Fall creeping in. In Stage 2, Jim explains how a company’s success can create the undisciplined pursuit of more. Through several examples, Jim’s research explains details as company’s struggle to maintain or create accelerated growth. As they strive to acheive this growth, companies can loose focus on the things that made them successful or overstretch and take unnecessary risks with their resources.

I agree strongly with “Packard’s Law” as mentioned by Jim. No company can consistenly grow revenues faster than it’s ability to get enough of the right people to implement that growth and still become a great company. The creates the counter wisdom of a great company is more likely to die from an ingestion of too much opportunity than starvation from too little. It is imperative that you fill key seats on the bus with the right people.

As companies start to fill key roles with the wrong people, a typical response is to add more rules and regulations to control quality. However, this accelerates the downward spiral of the company as the most talented people expect and require more freedom to produce results. A bloated bureacracy drives away the most talented people further compounded the problem. You no longer have to hire quality people to continue growth. You also have to replace talent to maintain past results.

Markers for Stage 2 – Undisciplined Pursuit of More

  1. Unsustainable Quest for Growth, Confusing Big with Great

  2. Undisciplined Discontinuous Leap

  3. Declining Proportion of Right People in Key Seats

  4. Easy Cash Erodes Cost Disciplined

  5. Bureacracy Subverts Discipline

  6. Problematic Succession of Power

  7. Personal Interests Placed Above Organizational Interests

Enjoying Jim’s Material

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