In Jim Collins book, “How the Mighty Fall”,
Bank of America surprised the world with its new CEO Pick, something forbes Magazine compared to picking a new pope. Though they ended up picking a very young, vigorous and articulate leader, this did not stop Bank of America from losing more than 600 million dollars of its net income from 1985 to 1987, which was at that point the largest losses in the banking history.The solution to decline according Jim Collins is not always change or due. Bank of America change, and nearly kill itself in the process.
The five stages are
Stage 1: Hubris born of Success;
This is when people and leaders lose sight of How and why they became successful in the first place. When arrogance set in and success begin to look like an entitlement and leaders begin to look like an entitlement and leaders begin to overestimate their own merit and capabilities.
Stage 2:- undisciplined pursuit of more:
When company’s begin to leap into areas they can’t be great, while forgetting the disciplined creativity that made them great in the first plaice. When an organization can’t fill its key seats with the right people because they want to scale more, gow more as that is what those in power see at success.
Stage 3: Denial of Risk and Peril:
Stage 4: Grasping for Salvation:
At this stage, it’s clear to everyone that the company is in trouble as decline is now visible to all. At this point the company knows it need a charismatic visionary leader, bold and untested strategy, acquisition, a game-changing product or any silver bullet solution.
Stage 5:- Capitulation to irrelevance or Death:
At this stage, the company is simply allowed to die, sell outright or pushed to irrelevance.
While some companies can move from stage 1 to 4 others spend more time in a particular stage, and some stages can overlap other stages. While you can’t come out from stage 5 you can tumble into the grim depths of stage 4 and climb out.