By Gayle Watson

I just finished reading Jim Collins’ new book, How the Mighty Fall:  And Why Some Companies Never Give In.  Collins’ hopes the book will equip leaders with knowledge about the stages of decline, so that they may reduce their chances of falling all the way to the bottom.  I particularly liked it because Collins’ research provides more evidence that values-based leadership is a differentiating factor between successful companies and those that fail.

Collins identifies five stages of decline, all important to understand, but I was most interested in the first two stages because each involves leaders who fail to stick with core values in their decisions and behaviors.  In the first stage, Hubris Born of Success, leaders become arrogant and lose sight of the true underlying success factors.  Collins discusses the concept of “arrogant neglect,” where leaders believe success will continue almost automatically and therefore divert their attention from the core business, culture, and values.

If hubris is not checked, it eventually leads to stage two, Undisciplined Pursuit of More.  In this stage, leaders become obsessed with growth to the point that it is unsustainable.  One of the mistakes leaders make in this stage is to take actions, such as mergers and acquisitions, which are inconsistent with core values.  Another mistake is failing to place enough right people in key seats.  Ultimately, Collins finds the best leaders are those who have humility, recognize the need to build an executive team, and build a culture based on core values.

For more information, go to http://www.jimcollins.com/