How the Mighty Fall – Part 2

Yesterday I shared the first stage of decline–hubris born of success–from Jim Collins new book, How the Mighty Fall. This book unpacks five stages of organizational decline based on extensive research from Collins and his team. The second stage is Undisciplined Pursuit of More.

Collins asserts that when leaders and organizations succumb to arrogance and pride, the next step is overreaching. In fact, the research indicates that most companies that fall showed very little evidence of complacency. Instead, “overreaching much better explains how the once-invincible self-destruct…Catastrophic decline can be brought about by driven, intense, hard-working, and creative people.”

Collins warns that when hubris–pride and arrogance–settle into an organization, it can generate brash commitments for more and more growth. Essentially, being big becomes more important than being great. It’s not that growth is bad–in fact stage two is really not about growth, but rather, the undisciplined pursuit of more. Collins sites “Packard’s Law”, named after co-founder of HP, David Packard, who observed that “a great company is more likely to die of indigestion from too much opportunity than starvation from too little.” Collins further says, “Packard’s Law states that no company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company.”

There is some powerful truth in that statement. When the rate of growth exceeds our rate of getting the right people on the bus and sitting in the right seats, we stand on the brink of decline. I’ll share once again Collins’s quote from a previous post: “When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the might fall.”

How have you found this to be true in your setting? Do you fill vacancies on the bus quickly because its easier to have a warm body in a seat than to pick up the slack week after week. While this may create a short-term win it inevitably creates long-term setbacks. What kind of hiring process is in place to insure you get the right people (check out my post on Creating an Effective Hiring Process for additional insight).

The seven markers of the second stage of decline include:
  • Unsustainable quest for growth, confusing big with great
  • Undisciplined discontinuous leaps
  • Declining proportion of right people in key seats
  • Easy cash erodes cost discipline
  • Bureaucracy subverts discipline
  • Problematic succession of power
  • Personal interests placed above organizational interests

Question: What evidence points to discipline in your life, church, and organization? How do you control the undisciplined pursuit of more? What are you doing to intentionally get the right people on the bus and sitting in the right seats?