Critical Book Review: How the Mighty Fall and Why Some Companies Never Give In by Jim Collins

Following his detailed and meticulous statistical review of Good to Great Companies, Jim Collins decided to view the other side of the looking glass in this book, How the Mighty Fall and Why Some Companies Never Give In. This book is a case study of eleven American companies and how they fell from being strong economic bastions of entrepreneurial spirit to almost non-existent or irrelevant organizations.

By identifying and then detailing five stages of decline, he supports his premise with hard facts along with some insightful quotations. Additionally within the Appendices and the Notes, there is even more information.

So how do the mighty fall?

As I read the first stage of decline, I was reminded of this old saying: Pride goeth before the fall. Stage one is all about the birth of hubris or arrogance. The attitudes of "we are too big to fail" to "I can lead this company out of its problems" signal the birth of hubris.

The early Greeks defined hubris as excise pride that brings down a hero or a more contemporary definition by is "outrageous arrogance that inflicts suffering upon the innocents." Beyond the companies that Collins researched, we have experienced the hubris of leaders all the time such as the Anthony Wiener or Bernie Madoff scandals to the falls of Fannie Mae and Freddy Mac.

Hubris happens when organizations fail to remember the purpose of business that being to serve the community. When your products no longer serve the community, you are destined to fall and fail.

Stage Two is the Undisciplined Pursuit of More. Here organizations experience incredible growth by overreaching or through an obsession to grow even more. When this type of growth happens, it sets the stage of Packard's Law that being "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."

In Stage Three, Denial of Risk and Peril, the leaders of the organization ignore reality. As they say, "Da Nile is not just a river in Egypt." Collins discussed the waterline approach as described by Bill Gore regarding taking risks. Making a bet on something that may blow a hole above the water line is Okay, but making a bet on something below the water line spells disaster.

Now stage four happens when management is grasping for salvation. Collins compared Hewlett Packard (HP) to IBM. Both companies had started to decline, but Louis V Gerstner, Jr. CEO of IBM changed the course of decline to one of re-growth and revitalization in both people and stock value.

The final and fifth stage is Capitulation to Irrelevance or Death. In this stage, money becomes very tight, the employees and even the customers lose hope. The opportunity for options becomes very limited.

This is a great book to read because of this one simple fact: Organizations are comprised of people. How the Mighty Fall is just as much about people as it is about businesses.

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Critical Book Review: Designing Your Organization by Amy Kates and Jay R. Galbraith

Since organizations are really a collection of individuals, it makes sense to have both an efficient (doing things right) and effective (doing the right thing) design. Unfortunately, many businesses grow without rhyme or reason as the saying goes. This "loosey goosey" growth potentially creates gaps and misalignment.

In this book, the authors Amy Kates and Jay R. Galbraith, provide an easy to follow design to ensure that the desired results are consistently achieved. This book builds upon their previous work of Designing Organizations.

Even though Designing Your Organization was written to solve organizational design challenges, for me it truly illustrates why many strategic initiatives to performance problems continue to vex leadership. When there is misalignment between strategy, structure, processes, rewards and people, these gaps are counter productive to securing the desired results. Silo solutions are the result of focusing on one challenge without understanding its impact on the other aspects of the organization.

The authors walk the reader through each of these design elements:

StrategyStructureProcessesRewardsPeopleAdditionally, they provided some concrete definitions for the words they used for greater clarity. For example, they defined strategy as a "set of capabilities at which an organization must excel in order to achieve the strategic goals." (pg. 3) Additional defined terms are organizational culture, alignment, competitive advantage and these are just within the first chapter.

Another benefit within this well written book is the inclusion of many simple charts and graphics. As the mind hears or sees words, but thinks in pictures having these visuals helps again to ensure greater clarity and agreement. The simplicity of these graphics only reinforce the basic premise within the 5 Star Organizational Development (OD) model.

Chapter Six takes this model into innovation specific to how to achieve organic growth. Again using the 5 elements, the authors demonstrate how this model can enhance innovation and works with it instead of against it. They also provided a detailed case study to support their approach.

Additional value is provided not only in the Appendix, but in the extensive bibliography and index.

Misalignment creates inconsistencies and those inconsistencies are very expensive in any organization. Having tools to identify those misalignment gaps is necessary. This is why I find the decision tools within the CD-Room to be incredibly helpful. These tools are very user friendly, can be easily adapted to any current organizational challenge and will help you be the be The Red Jacket in a sea of gray suits.

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Executive coach and consultant, Leanne Hoagland-Smith partners with forward thinking leaders who want a NEW status quo. Call 219.759.5601 CDT USA to have a conversation about the results you are seeking.

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Critical Book Review: How Stella Saved the Farm by Vijay Govindarajan and Chris Trimble

Authors for years have used parables to illustrate key points specific to human behaviors and nature. Aesop's fable are probably the best known.

In business, authors such as Kevin McCarthy in his work The One Purpose Person to John Miller in QBQ to B.J. Gallagher Hateley and Warren H. Schmidt in their book A Peacock in the Land of Penguins have also used parables or fables to address business issues from people to change management to innovation and creativity.

Now Vijay Govindarajan and Chris Trimble have joined others in crafting a parable around innovation through what they call "a wild and wooly yarn about making innovation happen."

The story, How Stella Saved the Farm is about two farms one managed by animals and the other by human beings. Both farms (think organizations) are working through change and innovation where the status quo is no longer good enough. Unfortunately Stella's farm is not doing as good as the other farm.

This is kind of like Planet of the Apes working along side Plant of the Humans. Only the creatures being farm animals are a little less threatening and possibly even more comical. The authors also have provided some simple brown and white illustrations which help to reinforce the parable. After all, we see and hear words, but we think in pictures.

Within the story line, the reader is exposed to a variety of issues that happen in business from a leadership void, to doing the same thing the same way to accepting diversity. By having the main characters as animals makes those issues somewhat less bullying, but still very realistic. I am sure we can all relate to one person in an organization who acts like a bull with "It's my way or the highway!" attitude.

Where the incredible value really is, is at the end of the book where there are two sets of questions.

Questions for ReviewQuestions for Deeper Reelection

There are questions specific to each chapter with the implication to apply these questions to what is happening or might be happening within the organization.

For example, in the first set of questions, topics include:

LeadershipOrganizational historyFinancesAttitudesNew product introductionOrganizational chartsFlexibilityMaking tough hiring and promoting decisionsCultural diversity

For the second set of questions, they are the "What If"scenarios. Also, these questions bore down into the feelings of those involved with this movement to save the farm (think business).

For me the first few chapters were a slow read and caused me to put the book down even though it overall was a quick read of fewer than 130 pages. However, after the first couple of chapters, the story line did pick up and I completed it rather fast.

If your organization is facing change or needs an infusion of creativity, then this is a good book to work through some of those changes by identifying them first.

Download this free leadership audit because the real Issue is not "Do they (you) know it," but "Do they (you) want to do it?"

Consider this proven individual diagnostic assessment.

Executive coach and consultant, Leanne Hoagland-Smith supports forward thinking leaders who want a NEW status quo. Call 219.759.5601 CDT USA to have a conversation about the results you are seeking.

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