Jim Collins on the 5 stages of decline

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Jim Collins is one of the leading business thinkers of the current age, and his books ‘Build to Last’ and ‘Good to Great’ have become modern day classics among both philosophers of business and entrepreneurs who actively go out into the world and make things happen.

One of his lesser-known works is entitled ‘How the Mighty Fall’ and Collins outlines 5 stages of decline, which he goes into below.

The 5 stages are:

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

The fascinating thing is that these observations do not just apply to businesses; they apply to organizations of all kinds including institutions as small as a partnership and as large as a global empire. Success can often lead to arrogance and complacency, as it is often the case that people can believe that they are better than they really are because the winds of fortune have blown kindly for a certain period of time.

Although when many are in the midst of a ‘purple patch’ of good fortune they never recognize that the signs of decline are completely interwoven with the symptoms of success.

The entrepreneur Ray Kroc once said, ‘As long as you’re green, you’re growing. As soon as you’re ripe, you start to rot.’

This lesson rings out across all ages as those who forget or ignore those words will succumb to the necessary inevitability of self-imposed dilapidation and destitution.

 

Jim Collins – the 5 stages of decline

Speaker: Jim Collins

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