101
See also: Reinventing and adapting 52–57 ■ Beware the yes-men 74–75 ■
Good and bad strategy 184–85 ■ Avoiding complacency 194–201
Jim Collins
Business consultant, author,
and self-titled “student of
great companies” Jim Collins
was born in the US in 1958.
Collins holds degrees in
business administration and
mathematical sciences from
Stanford University, and
several honorary doctoral
degrees. He has worked
alongside senior executives
and CEOs at corporations of
all types—from health care,
education, and the arts, to
religious organizations and
government. His interest lies
in the difference between
good and great: how do
companies attain such
superior performance?
In 1995 he founded a
management laboratory in
Boulder, Colorado, to do
further research into business
excellence. His books have
sold more than 10 million
copies globally and have been
translated into 35 languages.Key works1994 Built to Last
2001 Good to Great: Why
Some Companies Make the
Leap ... And Others Don’t
2009 How the Mighty Fall:
And Why Some Companies
Never Give In believe their own hype. Internal
warning signs may be present long
before management—buoyed by
seemingly unstoppable success—
notices or chooses to do anything
about them. Hubris, a kind of blind
pride, can shield people from
seeing that a company is already on
the path to corporate catastrophe.
Five stages of decline
Jim Collins identified five stages
of corporate decline. In stage 1, the
business is doing well, perhaps
exceptionally well. Press coverage
is positive, finances are good, and
morale is high. However, as a result
of such success, during stage 1 the
first warning sign appears—the
company’s directors and staff start
to become overconfident. In highly
successful companies there is a
risk that staff members will
become arrogant, and will begin
to regard their success as a right
or entitlement. Managers lose sight
of the underlying factors that
created success in the first place,
overestimating their own strengths
and those of the business.
If stage 1 is a feeling that “we’re
so great, we can do anything!”
stage 2 is characterized by the
feeling that “we should do more!”
Collins calls this stage the
“undisciplined pursuit of more”:
more sales, more stores, more
growth, more of everything. ❯❯LIGHTING THE FIRE
Success breeds
confidence.The worst
disease that
afflicts executives
is egotism.Problems and pitfalls
are swept aside as
irrelevant or mere blips.Greedy for more success,
managers force the
company to overreach.Great success can lead to
overconfidence....it may be too late
to save the company.By the time management
realizes there is a major
problem...This can make managers
blind to changes that
begin to affect the
company.