How the Mighty Fall in Business

What a difference a decade makes .... In 2001, business author Jim Collins wrote his seminal book, Good to Great, as a sequel to his other groundbreaking work, Built to Last. Both books were aimed at profiling companies that had "made the leap" to greatness and were "built to last" well into the future. For example, in 2000, Circuit City was outperforming General Electric -- the old-school standard in electronics -- by 6-to-1 in the market. Fannie Mae, the mortgage lender, was beating companies like Coca-Cola in stock value around the same time. Philip Morris was on Collins' list, too, and was still pulling in massive revenues.

Other companies also were basking in the glow of success in 2001. They did not make Collins' list, but they were no less a standard fixture in the conscience and checkbooks of American consumers. You could always rent a movie at your local Blockbuster store or stop in at Borders to browse for books, to name a couple of examples. These companies were firing on all cylinders, and there seemed to be no limit to how far they would go.

Turns out, however, that by 2011, just 10 years later, some of these high-profile companies had made a bigger leap -- all the way off the cliff, where they cratered like Wile E. Coyote. Circuit City, Blockbuster and Borders have all closed. The government had to bail out Fannie Mae. Philip Morris has become a public pariah. Others are following them toward the edge of the abyss.

Now, you could make the case that 9/11, the Internet and the recession all had something to do with these companies and their falls from grace, but that would not be the whole story. Other companies have managed to adapt and survive. In 2009, a contrite Jim Collins wrote a follow-up to Good to Great, aptly titled How the Mighty Fall. Looking back at his research and trying to make sense of what had taken place, Collins proposed five stages that mark the decline of a once-great company. As some have noted, one could draw parallels to the demise of some churches in America.

Stage 1: Hubris born from success. A successful company begins to believe its own press and becomes enamored with itself. The company becomes dogmatic about its products and practices and fails to question their relevance when conditions change.

Stage 2: The undisciplined pursuit of more. The company strays from the disciplined creativity that made it great in the first place, making leaps into places outside the original realm of success and growing so fast that they sacrifice excellence for expediency.

Stage 3: Denial of risk and peril. Leaders begin to deny that anything is wrong, and refuse to hear bad news, putting a positive spin on everything. They blame external factors instead of taking responsibility.

Stage 4: Grasping for salvation. The company begins to look for a quick fix to its problems, and begins grasping at straws to stop the decline. Common "saviors" for a company in this position are the hiring of a charismatic leader, radical restructuring, focusing on a revolutionary new product, or other reactive behaviors and strategies.

Stage 5: Capitulation to irrelevance or death. In this stage, the company's spirit and financial strength have eroded to the point of despair. Leaders and team members give up hope and the institution slides into insignificance and eventual death.

These factors eventually put businesses out of business. Leaders can stop the slide by taking drastic action to call the company back to its core principles, values and practices. The best companies and best leaders are able to make a comeback because they invest in a vision for creating something great. They return to the basics, and they never give up hope.

 

            I leave it to you to ponder what this might mean for the church of today. For those of us who are United Methodist, I leave it to you to consider prayerfully what it might mean for this denomination today.