Jim Collins in his book, How the Mighty Fall summarizes the path of decline for great companies: Hubris born of success; overreaching and the undisciplined pursuit of more; denial of risk and peril; ignoring or minimizing critical information refusing to listen to things we do not want to hear; grasping for salvation by lurching for solutions; capitulation to irrelevance or death.
These five stages feel right to me, particularly number one! When you’re on top it’s so easy to think you’ll never fall!
There are two articles in the current issue of the Economist: TOYOTA Losing Its Shine and Struggling Giants TOYOTA Slips Up that refer to Collins’ book and how TOYOTA is dealing with these issues. Having gone (rapidly) from being the number one car maker in the world to something much less stellar the current CEO (Toyoda, grandson of the founder) believes that TOYOTA is at stage four of Collins’ five stage spiral of death! And the death ‘spiral’ was born of pride.
According to the articles, TOYOTA over-reached. Overreaching is the pursuit of growth accompanied by the neglect of core principles upon which an organization is built. It is about getting larger and larger, more and more expansive, even if it costs the organization its soul. Collins admits that when he started to study organizational decline, he expected to find complacency at the root of most trouble. But he found that he was wrong. Overreaching (in some ways the opposite of complacency) was the real issue.
I couple this with the leader’s ability to create an environment where people feel free to speak their minds. If you ‘spank’ them too often for speaking up (killing the messenger), believe me, the pain you inflict has rapid consequences…people shut up in a hurry and never will speak up again…or until it’s too late. Then they will say, “I tried to tell you…” You end up killing the very things that might have saved you.
This is really a balancing act between listening to (which?) people, even those you may want to dismiss at first. You have to be careful not to shut off this pipeline always looking for the corneal of truth, and then finding the courage, and the will, to act (NOT OVERREACT!).
This is a discipline as a leader: willingness to listen and it action requires reflection, study, more reflection, and a bit of time. If you think you’re drowning, the strong temptation is to thrash around, not tread water until you can figure out what to do. The challenge for leaders is knowing when you have enough information to act! Too little and you make poor choices. Too much and you miss your window of opportunity.
This is an article in Leadership Journal that applies Collins’s principles to a church environment. The author of this article says, “It took me only a couple of months to realize that I knew very little about how to lead an organization of such size, complexity, and woundedness. At age 27, I was in over my head. Somehow I had made it all the way through seminary believing that all one had to do was become a dazzling preacher and an enthusiastic visionary and everything else about church life would fall into place. No one had told me about staffs that required direction, boards that wanted results, and congregations that needed healing.”
This is so true and it’s hard to say this (as an older leader to younger leaders) but there really is no substitute for experience. And, often it takes one or two very difficult experiences to form the foundation of a leader’s future success. My father-in-law likes to say, “Education is expensive.” He’s not talking about formal education but rather the hard knocks required learning the lessons of leadership (and life, for that matter). I can point to several of these in my own experience that continue to shape my approach to leadership to this day.
Max Dupree in his book, Leadership Is An Art says, “The first responsibility of a leader is to define reality.” And, the great business leader, Martin Luther King once said, “Procrastination is the their of time…there is such a thing as being too late!”
And, you’ve also taught me to pay attention to my intuition (read: Holy Spirit in me) and to take risks. It’s a privilege to learn from you Bob.
I ditto Erica’s comment. I’ve delayed reading this post because I wanted to spend some time letting it soak in. Sounds like another good book by Collins, and more principles that many of us can learn from.
That “education is expensive” line continues to ring in my ears, and brings a bit of solace when we are taught one of those life lessons the hard way.