Few authors have demonstrated more impressive research than Jim Collins has in his book How the Mighty Fall. It is an honor to have the permission to reprint Mr Collins model The Five Stages of Decline from his mighty book in my book Sharkonomics.
Mr Collins reveals in his book How the Mighty Fall such corporations as Bank of America, Motorola, Merck, Disney, IBM, HP and others nearly fell by making the wrong moves. In my opinion these corporations felt as unsinkable as the mighty Titanic which sadly ended up feeding the sharks. If there had been any readers of Sharkonomics around at that time, when the mighty were stumbling and making the wrong moves, most of them would never have survived. They simply would have ended up like the Titanic, becoming good-to-great-shark food.
Jim Collins’ model describes the five stages of decline:
1. Hubris born of success.
2. Undisciplined pursuit of more.
3. Denial of risk and peril.
4. Grasping for salvation.
5. Capitulation to irrelevance or death.
In my opinion the model looks like a shark’s dorsal fin.
A good stage to execute an attack is in stage four. At that stage the mighty prey is weak and out of focus. This is the time for the predator to show its dorsal fin above the surface and spread fear and panic in the organization. When the prey is in denial about its mortality, it will not survive in the “grasping for salvation” stage, and will fall victim to a brutal predator attack.
I would argue that most corporations have made a lot of bad moves and nearly been killed themselves in doing so. The only reason why the likes of BP, Toyota, Apple, Microsoft, HD, GM, IBM have survived is due to laziness on the part of their competition!