The New Year is just around the corner – hooray! Before we douse ourselves in optimism and egg nog, allow me to share with you insights from a book that’s bound to make you temporarily less cheery. Acclaimed business author Jim Collins wrote How The Mighty Fall “to offer a research-grounded perspective of how decline can happen, even to those that appear invincible, so that leaders might have a better chance of avoiding their tragic fate.” He continued, “It’s a bit like studying train wrecks — interesting, in a morbid sort of way, but not inspiring.”
Clearly this isn’t the subject you’d raise at a New Year’s Eve party, but it’s something every ISV management team should contemplate, even if 2018 was your best year ever. Wait – let me rephrase. You should contemplate these lessons especially if 2018 was your best year ever. Collins writes, “There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do.”
Here are 20 additional insightful excerpts from How The Mighty Fall that I hope motivate you to appropriately adapt your business for next year and beyond:
- I’ve come to see institutional decline like a staged disease: harder to detect but easier to cure in the early stages, easier to detect but harder to cure in the later stages.
- Stage 1: Hubris born of success. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.
- Stage 2: Undisciplined pursuit of more. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall.
- Stage 3: Denial of risk and peril. Internal warning signs begin to mount, yet external results remain strong enough to explain away disturbing data.
- Stage 4: Grasping for salvation. How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place?
- Stage 5: Capitulation to irrelevance or death.
- Organizational decline is largely self-inflicted, and recovery largely within our own control.
- Circuit City left itself exposed by not revitalizing its electronic superstores with as much passion and intensity as when it first began building that business two decades earlier.
- Great companies foster a productive tension between continuity and change.
- There’s nothing inherently wrong with adhering to specific practices and strategies but only if you comprehend the underlying why behind those practices, and thereby see when to keep them and when to change them.
- The best corporate leaders have an incurable compulsion to vacuum the brains of people they meet.
- From 1994 to 1998, Rubbermaid raced through the stages of decline so rapidly that it should terrify anyone who has enjoyed a burst of success.
- Packard’s Law states that 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.
- Any exceptional enterprise depends first and foremost upon having self-managed and self-motivated people — the number one ingredient for a culture of discipline.
- Whether a company sustains exceptional performance depends first and foremost on whether you continue to have the right people in power.
- Reorganizations and restructurings can create a false sense that you’re actually doing something productive.
- The very moment when we need to take calm, deliberate action, we run the risk of doing the exact opposite and bringing about the very outcomes we most fear.
- If you want to reverse decline, be rigorous about what not to do.
- Not all companies deserve to last.
- Never give in, never give in, never, never, never, never — in nothing, great or small, large or petty — never give in except to convictions of honor and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy. Be willing to change tactics, but never give up your core purpose.
Jim Roddy is a Reseller & ISV Business Advisor for Worldpay’s PaymentsEdge Advisory Services. He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as a Retail Solutions Providers Association (RSPA) board member, and one term as RSPA Chairman of the Board. Jim is regularly requested to speak at industry conferences and he is author of Hire Like You Just Beat Cancerand On The Edge with Jim Roddy.