Sunday, June 14, 2009

How the Mighty Fall Book Review

I am at the end of week 2 as President and CEO of Nu Horizons Electronics. This puts me at halfway through my first month which I called the "Listen and Learn stage". (Of course that does not mean that I will know it all at the end of the month or that I will stop learning).

I have learned a lot. I do notice that I have a propensity to take action though and find it hard to "hold back" and just listen. I particularly have difficulty when I have an idea that I think can truly add value (my quest is always to add value). But what I need to consider is do I really know the real situation and is my idea really a good one?

I have a high propensity to action and a very high sense of urgency. I think that is one characteristics that helps companies and people succeed.

I have long believed in tracking how I use my time. I do not do it all the time but I do it enough that I know how I spend it.

I read about business author Jim Collins and I feel like I am an amateur. See how he tracks his time in this NY Times article. Also notice though that he not only tracks his time, he knows how he wants to spend it. I think that is the key.

Jim Collin's latest book "How the Mighty fall and Why Some Companies Never Give In" differs from his earlier ones (Good to Great and Built to Last) in that it mostly focuses on companies that fail. I suspect Collins had quite a bit of egg on his face from his previous books where he chose winner and made conclusions why they were great and then many of them went on to fail. So now writing about companies that fail; he cannot be wrong.

I like the title - it suggests persistence pays. Good message in turbulent times.

I like learning from failures. True wisdom is being able to learn from the mistakes of others. Not sure I am truly wise yet as often I need to fail myself in order to learn. And sometimes I am even a slow learner at that and need to fail more than once to get it.

How the Mighty Fall is well researched (as all of Collins books are), well written and thought provoking with actionable ideas.

From an Amazon review of the 5 stages of failure in How the Mighty Fall by Mark MacDonald:

Stage 1: Hubris born of success - describing the cultural tipping point when hard work and focus to earn the business turns into a sense of entitlement to future success.

Stage 2: Undisciplined pursuit of more - building from stage one is people chasing goals that take them away from their core, their competitive advantage all in the name of growth, or the grand strategy. This leads to thinking what before you think about who and abandoning the hedgehog concept in favor the rabbit's pursuit of quick gains.

Stage 3: Denial of risk and peril - now that you are chasing things that are not part of your core, you fail to see the problems or blame the problems on the outside world. In this stage you are blind to the brutal facts.

Stage 4: Grasping for salvation - often in the form of the silver bullet, visionary leader all of which keep your attention away from the core (Flywheel) and lead you into further decline. I lose a culture of discipline, abandoning the flywheel and chase things outside the core.

Stage 5: Capitulation to irrelevance or death - the final demise when people throw in the towel and the cause is lost. This is the terminus of the lifecycle and the one place you cannot recover from.

Good book. Worth reading.


At 9:34 AM, Anonymous Jaky Astik said...

I haven't read the book, but I think mighty fall due to over confidence and greed.

At 11:33 AM, Blogger DarryleHuffman said...

Without failure thier can never be a success. Great leaders learn from thier failures. One of the worst things is to dwell on failure. Learn from it and move forward. Their have been many people who have failed but came back even better than they were before. This past semester at I melted down halfway through the semester did lackluster in the grades. Two B's. I thought about giving up because of it. This semester an A and an A+ Where would I have been if I let the failure got the best of me.

At 11:11 AM, Anonymous Alex Revai said...

Thanks for pointing out Jim Collins' latest book "How the Mighty Fall...?"

It seems, someone actually took the time to research and write up, what, for years, I have been saying (without researching). In parallel to the 5 stages you quoted:

1. Company is doing well. Hunky-dory! There is no limit to what we can do.

2. Focus on growth, for the sake of growth. Empire-bulding. Forgetting why we are in business at the first place.

3. Forget about fixing what's broke. What problems? Fire those negative bastards, who keep pointing out what's wrong with us. Keep the "street" happy!

4. Ooops! Let's fix it quickly. Reorganize: Cut the fat. Cut the meat. Cut the bones. Anything, but admit that we failed all along.

5. Top management takes early retirement, having cashed in during the "good times". Successors are left holding the bag and the pain of dismantling the company.

Is Jim Collins' book going to make a difference? I doubt it. Unless the recession is going to last long enough for us to actually learn from it.


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