How the mighty fall: and why some companies never give in. (2009)

“Hubris born of success is the first of five stages of corporate decline.”

Jim Collins, author, leadership & management practitioner, former Stanford University academic.
Published by Collins Business Essentials.

“If companies such as Bank of America, Motorola, Circuit City, Zenith A&P and Fannie Mae – icons that once served as paragons of excellence – can succumb to the forces of gravity, then no one is immune.

“(But) by understanding the five stages of decline … leaders can substantially increase the odds of reversing decline before it is too late…as we’ve seen with notable cases such as IBM, Hewlett-Packard, Merck, and Nucor.”

Collins’ four year research project identified five stages of decline:

Stage 1: Hubris born of success

Stage 2: Undisciplined pursuit of more

Stage 3: Denial of risk and peril

Stage 4: Grasping for salvation

Stage 5: Capitulation to irrelevance or death.

“Decline, it turns out, is largely self-inflicted, and likewise the path to recovery lies largely within managers’ own hands… The mighty can fall, but they can often rise again.”

Buy the book here: How the mighty fall

Read a preview here: A primer on the warning signs