Positioning Systems Blog

Not all companies deserve to last. That’s how Collins starts Denial or Hope a sub title to the chapter on Stage 5: Capitulation to Irrelevance or Death. You wish that this book had been completed before the government had issued its massive bailouts.

Collins offers stories on once successful companies that eventually capitulated. Zenith, Scott Towels , previously mentioned Ames Department Store and many others. If you cannot offer an answer to the question, “What would be lost and how would the world be worse off, if we ceased to exist?” Perhaps it is better to allow the business to die. On the other hand if you have a clear and inspired purpose built upon solid core values, the noble course may be to fight on, to reverse decline, and to restore your greatness. 

Company owners and CEO’s often question the need for a core purpose and values. This is especially so when they are fighting to make headway or know they need a specific solution to reverse or resolve a difficult issue. They want to resolve that first then they’ll discuss creating core purpose and values. While I have no problem coaching a company to resolve their challenges, those leaders that question the need for core values and purpose too frequently are the ones that once the current issue of the moment is resolved they are quick to discover another and once again the issue of creating core values and purpose remains on the back burner. 

Collins specifically discusses this and shows the value of core values and purpose as providing the reason to continue when times get tough. There are many more reasons for creating core values and purpose, not the least of which is making sure the people you hire are aligned with them to ensure they are right for your culture and come to your organization motivated by what you do rather than just looking for a paycheck. 

The point of this is that a company without a solid core purpose and values can fade at the first sign of adversity. That’s why it’s so critical that you understand Collins explanation that when a company fades it’s rarely due to circumstances beyond their control. The company’s that Collins describes in his book all had opportunities to reverse their situation had they stayed true to a fundamental strategic discipline. 

The story of Anne Mulcahy, chief executive of Xerox, which she inherited in 2001, and the more personal story of Winston Churchill are two examples Collins gives of people who demonstrated ferocious willpower to save the institutions they believed in. 

Collins believes a company can reverse its course even until Stage 4 provided it has the resources to get out of the cycle of grasping and rebuild one step at a time. 

He also warns that any CEO should beware the temptation to proclaim a crisis. The right leaders feel a sense of urgency in good times and bad. They are obsessed with the creative compulsion and inner drive for progress. Never manufacture a crisis because it creates cynicism. As Collins has mentioned in Built to Last and Good to Great, the right people will drive improvement no matter the circumstances, and no one takes well to being manipulated. 

One side to the coin for How the Mighty Fall is that almost all circumstances that lead to failure are within our control, as long as we recognize the patterns and remain true to our strategic disciplines we can avoid them, we can conquer them.  The other side is if we do fail we can certainly look at no one but ourselves and our failure to recognize the patterns for the outcome. Even that should give one hope, because we can all learn from our mistakes. I recommend you read How the Mighty Fall so you can learn from others how to avoid the mistakes of falling. 

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Positioning Systems helps business owners and entrepreneurs transform their business.   We provide the tools and coaching to help you take control of your business -- rather then having your business control you.