Collin's previous books, Good to Great and Built to Last have become classics in leadership circles. How the Mighty Fall seems to dovetail with both Good to Great and Built to Last in that it focuses on what may happen if companies do not incorporate (over time) the message of these first two books.

In the main narrative of the book, Collins includes the five stages of pending disaster. By understanding these passages of decline, business leaders can significantly reduce their chances of a total demise of their organization. Following are the five stages of decline as described by Collins:

Stage 1: Hubris Born of Success describes the cultural tipping point when hard work and focus to earn the business turns into a sense of entitlement to future success.  This is the death of Level 5 Leadership as mentioned in his previous books.

Stage 2: Undisciplined Pursuit of More—The next stage, which builds on Stage 1, involves leadership chasing goals that take them away from their core and competitive advantage, all in the name of growth strategy.

Stage 3: Denial of Risk and Peril—When a company is pursuing opportunities that are not part of the core, there is a failure to see problems and/or blame the problems on the outside world. In this stage leadership is typically blind to the distasteful facts regarding the impending decline.

Stage 4: Grasping for Salvation—This stage is often manifested in grasping for a form of the silver bullet. Typically, the visionary leader, in effort to save the company continues to be drawn away from the core (or, as Collins calls it, the Flywheel), leading to further decline.

Stage 5: Capitulation to Irrelevance or Death—This is typically the final demise where there is a tendency to give up hope and throw in the towel. This is the terminus of the lifecycle and, according to the author, is usually not a place from which a company can recover.

Collins examines each of these five stages and suggests what lessons can be learned from companies that failed as well as other companies that fell and then rose again. For example, he explains how ten of the eleven great companies featured in Good to Great "fell [to Stage 2] despite showing behaviors contrary to complacency": Addressograph, Ames, Bank of America, Circuit City, HP, Merck, Motorola, Rubbermaid, Scott Paper, and Zenith. He then explains how each of the ten "grasped for salvation" in Stage 4.

By understanding the five stages of decline discussed in these pages, leaders can substantially reduce the chances of falling all the way to the bottom, tumbling from iconic to irrelevant. According to Collins, decline can be avoided. The seeds of decline can be detected early. And as long as you don't fall all the way to the fifth stage, decline can be reversed. In essence, the mighty can fall, but they can often rise again.

Researcher George Barna asserts in his new book, The Seven Faith Tribes, that in the United States an attitude of self-interest has overtaken one of shared interests and is causing a spiral toward the country’s destruction.  Thankfully, the author adamantly presents the opinion that it’s not too late for the country to reinvent itself. While Barna is known for his Christian research work, he clearly states that this book doesn’t aim to convert anyone to any particular religious view or bent. In fact, he proffers that it is crucial for all “faith tribes” to work with one another.  That said, he does include a chapter specifically targeted to the readers sharing his Christian faith. From analyzing more than 30,000 interviews with U.S. adults, Barna has determined that Americans, while belonging to more than 200 different religious affiliations, belong to primarily seven faith tribes: “Casual” Christians (67 percent); “Captive” Christians (16 percent); Jews (2 percent); Mormons (1.5 percent); pantheists, mostly Eastern religions (1.5 percent); Muslims (less than 1 percent); and skeptics, including atheists and agnostics (11 percent). The author includes thorough information regarding each group’s religious beliefs, political perspectives, and self-conceptions.  The author concludes that if we can get beyond our differences to embrace what Americans generally hold as similar, we could be on the road to a national change for the better.  Some of the twenty common shared values include:  Represent the truth well, Be forgiving, Practice self restraint, Invest in young people, Treat others as you want to be treated, Cultivate civility, Respect life, and Honor the elderly. Barna includes chapters on influences in our recent history that undermine these shared values. His chapter on the media is especially provoking, as Barna considers (usually negative) media exposure one of America most widespread and serious problems.  A second chapter I found very interesting was the author’s description of the abdication of sound parenting; specifically, in that there is a trend for parents to “outsource” much of the responsibility of this role and the resultant impact on America is widespread. Barna includes a call to action that may cause consternation for some and please others.  In summary, I found the book readable, interesting, and factually viable.  I especially enjoyed the primer describing the seven main faith tribes—it was educational, but not judgmental or overly academic.

Specifics can vary, even within companies, but our research delivered six important traits that identify “the right people.”

The right people fit the company’s core values
Great companies build cultures in which those who don’t share the institution’s values are surrounded by anti-bodies and ejected like viruses.  People ask: “How do we get people to share our core values?”  The answer:  Hire people already predisposed to them - and keep them.

The right people don’t need to be tightly managed
When you feel the need to tightly manage someone, you may have made a hiring mistake.  The right people don’t need a lot of time being “motivated” or “managed.”  It’s in their DNA to be productively neurotic, self-motivated, self-disciplined, and compulsively driven to excel.

The right people understand that they do not have “jobs” - they have responsibilities
They grasp the difference between their task list and their true responsibilities.  The right people can complete the statement, “I am the one person ultimately responsibility for…”

The right people fulfill their commitments
In a culture of discipline, people view commitments as sacred - they do what they say they’ll do, without complaint.  This means that they take great care in saying what they will do, careful never to over commit or to promise what they cannot deliver.

The right people are passionate about the company and its work
Nothing great happens without passion.  The right people display remarkable intensity.

The right people display window-and-mirror maturity
When things go well, the right people point out the window, giving credit to factors other than themselves; they shine a light on others who contributed.  Yet when things go awry, they do not blame circumstances or other people; they look in the mirror and say, “I’m responsible.”

The following was heard last November on the daily broadcast over hundreds of radio stations and bears repeating, with comments at the end.

Racing dogs are trained to chase a mechanical rabbit that always goes a little faster than the fleetest dog. Presumably this causes them to run faster than they otherwise would.

Companies that annually set overly ambitious performance objectives for employees employ this greyhound principle. To a point, it works. Most people achieve more when expectations are set high.

The strategy turns negative, however, when firms chasing Wall Street’s rabbit continually set “no-excuses” double-digit growth goals without regard to market realities (including multiple competitors driving toward the same goals) or systemic understaffing (part of the “do more with less” philosophy). Consequently, many corporate leaders are caught up in a ceaseless upward spiral of stress.

Yes, the financial rewards for such success are ample, but the driving motivation is usually not greed, and certainly not job satisfaction -- it’s toxic fear. This can often morph into desperation, a dangerous mindset that in turn can spawn imprudent short-term decisions and outright cheating.

It’s unwise and unethical to ignore the business and moral implications of aggressive growth strategies that put executives under unprecedented, unrelenting, and unreasonable pressure.

On one level, it’s a matter of values. Work-life balance should be more than a rhetorical ideal. A good company cares about its people. The path to career success should not be littered with the ruins of failed marriages and neglected children.

On another level, it’s long-term self interest. Without an abundant and replenishing pool of talented and committed leaders, no company will succeed for long. The organizations that will pull away in the next decades are those who can attract and retain the best talent because they’re places where those people want to work -- and that’s going to take a lot more than money.

This is Michael Josephson reminding you that character counts.

Bruce Dingman's comments on Michael Josephson's article

One of the quickest and most negative ways to change an organization’s value and culture is to have very unrealistic goals.  It often happens; a board wants the company to grow substantially so they hire a CEO promising impressive growth.  The CEO imposes his goals on the team members.  If someone pushes back saying that 8% growth in a down market is a very ambitious goal but CEO’s desire of 20% just isn’t achievable, the CEO fires them and hires someone who says they’ll achieve it.  When the desired results are not met, the CEO tells the board the wrong person was hired and gets someone else.  The second time the unrealistic goals are not met; the board doesn’t believe the CEO and replaces him.

It’s a tragic scenario.  The best people leave the organization and the people who stay are either anemic or afraid.  The culture has become directive, top down and original values are ignored.

A variation on that theme is the publicly-held company whose leadership is so riveted on what Wall Street wants that the sole focus is on “what have we produced in profits this quarter.”  Some companies are now giving push back to Wall Street; Wal-Mart no longer gives quarterly earnings reports for that reason.

The best leadership combines realistic expectations for the short, medium and long term and is not exclusively focused on either the short or long term.  The best leadership values feedback from multiple sources and evaluates that input before setting goals.

First and foremost, the best leaders are wise and secondly ambitious.  Above average results don’t happen if one reverses the two.

Email your comments to bruce@dingman.com