How Rhythm Can Help Fight Jim Collins' Five Stages of Decline

"No matter how much you’ve achieved, no matter how far you’ve gone, no matter how much power you’ve garnered, you are vulnerable to decline” (How the Mighty Fall, p. 8)

I don't know how it makes you feel, but to me, this is not a comforting thought.

Here are Jim Collins’ 5 Stages of Decline as he outlined in How the Mighty Fall along with some questions to consider whether you are showing any of the signs:

Stage 1: Hubris Born of Success

• Do you think that luck or chance had no role in your successes?
• Do you think there is no need to stay vigilant and plan for the unexpected because you are making the right decisions and doing the right things to remain successful?
• Do you take full credit for your successes and assume the attitude that your company is so great, you can take on anything?

Stage 2: Undisciplined Pursuit of More

• Have you branched out to new areas (products, geographical regions, ventures) that may be outside of your expertise or your ability to execute well?
• Have you grown so much so fast that you are no longer able to take the time to fill the key seats in your organization with the right people?
• Are you growing so fast that you are not able to scale or achieve the same level of excellence that once made your company great?

Stage 3: Denial of Risk and Peril

• Do you find yourself putting a positive spin on ambiguous data or overly emphasizing positive data while downplaying negative data?
• Have your people stopped coming to you with their concerns or voicing disagreement with your decisions?
• Do you feel that external factors are largely responsible for problems in your company?
• Are you unconcerned about the mounting evidence that your company is beginning to fall because you can “explain away” this evidence?

Stage 4: Grasping for Salvation

• Are you looking for a “silver bullet” to get your company back on the right track?  
• Do you believe that your company will recover if you can just find a new charismatic, visionary leader? A new product or a bold new strategy? An exciting new company culture?
• Have you abandoned your disciplined 20 mile march that made you great in the first place in search of a quick fix?

Stage 5: Capitulation to Irrelevance or Death

• Have your repeated attempts to find salvation for your company left you financially depleted and emotionally demoralized?
• Have you given up hope of building a company with a great future? 

If you answered “Yes” to any of these questions, you may be showing some signs of decline.  

Luckily, this does not mean that your company is doomed! Collins is very clear that his research indicates that the stages of decline are reversible. He states, “Most companies eventually fall, and we cannot deny this fact. Yet our research indicates that organizational decline is largely self-inflicted, and recovery largely within our own control” (How the Mighty Fall, p. 25). 

Here is How Rhythm Can Help:

With our Rhythm Think Plan Do methodology, you will have the discipline built in to avoid or reverse some stages of decline. If you stick to a Think Rhythm and follow our process for documenting and testing assumptions for new strategies, always firing bullets before cannonballs, you will have to stay focused on a few strategies that you have pretty good data will pan out rather than falling prey to the “undisciplined pursuit of more.”

Our Plan Rhythm process helps you remain focused on your top 3-5 most important priorities every quarter that are aligned with your strategic goals so that you are not overreaching or trying to do too much and grow too fast. Keeping track of your execution on these priorities in your Rhythm dashboards weekly with Red-Yellow-Green status updates will make it difficult to spin data that should be a red flag. In Rhythm software, you can’t hide from the Reds; your team will have to face the brutal facts and make adjustments when you are tempted to "deny the risk and peril.”

Rhythm dashboards will help you remain accountable to your 20 mile march, and your coach can help you stay disciplined rather than seeking a silver bullet.  Getting in a Think Rhythm where you regularly step outside of the day to day operations of your business and think strategically and following our process to think about external opportunities and threats with your team every quarter will help you stay in a rhythm of being “productively paranoid” and perpetually considering what could go wrong and how you can prepare to avoid or reverse the stages of decline. 

Good luck!