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Book Review

Book Review: by Lang Reid

How the mighty fall

With long faces everywhere in the business world, I saw this latest hard cover book called How the Mighty Fall, with the subtitle And Why Some Companies Never Give In (ISBN 978-0-9773264-1-9, Harper Collins Publishers, 2009) on the new releases shelf at Bookazine. Written by Jim Collins, a well known writer on corporate life, I thought there might be some value in it for the long-faced brigade.
Author Collins writes, “The aim of this piece is to offer a research-grounded perspective of how decline can happen, even to those that appear invincible, so that leaders might have a better chance of avoiding their tragic fate.” He also states that “We do ourselves a disservice by studying only success,” going further that there are more important facts available for scrutiny by looking at failing companies than those available in (apparently) healthy companies. He postulates that organizational decline is largely self-inflicted, and recovery largely within our own control.
Collins asserts that there are five demonstrable stages leading to failure. These 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
He then dissects each one of these stages, with references to companies that have been through the corporate roller-coaster.
He looks at staffing and states that many companies fail because they have the wrong people in key decision making positions. To see whether you have the right people, he says to ask them what they do. If they say they have a “job” and rattle off a job description, they are the wrong people. The right people tell of their personal responsibilities. He also derides bureaucratic systems of rules, because they subvert the concept of freedom and responsibility.
Author Collins explains the system he used to come to the results he quotes. As would be expected from a scholarly work, with some substance, 60 companies were put under the microscope, covering 30 industries.
All the way through the book are small sidebars with some very big statements. Such as, “There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do.”
The latter half of the book covers seven appendices, showing the methodology, criteria for selection and impartiality, then some reference notes and resources and finally a useful index.
This book is much more than the usual ‘self-improvement’ or ‘self-help’ books, but does have some research bona fides. It highlights the fact that some of the biggest ‘names’ can go down, some in the study being over 100 years old and in stable industries. For example, if the entire industry went down, then companies from that industry were excluded. Similarly, if the ‘great’ years were pre 1950, they were also excluded as meaningful statistics were not available.
At B. 750 for a hard cover book, this is not expensive. Being hard cover also means that you can pass it around other members of your organization and hopefully avoid the final phase of Capitulation to Irrelevance or Death!