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• Mil 111 In an exclusive excerpt from his new book, Good to Great author Jim Collins pinpoints the insidious (and often invisible) problems that send great companies crashing to earth IN DEPTH • BOOK EXCERPT IN AUTUMN 2004,1 RECEIVED A PHONE CALL from Frances Hesselbein, founding president of the Leader to Leader Institute. '• "The Confer- ence Board and the Leader to Leader Institute would like you to come to West Point to lead a discussion with some great students," she said. ^ "And who are the students?" I asked, envisioning perhaps a group of cadets. '! "Twelve U.S. Army generals, 12 CEOs, and 12 social sec- tor leaders," explained Hesselbein. "They'll be sitting in groups of six, two from each sector—military, business, social-and they'll re- ally want to dialogue about the topic." 'j "And what's the topic?" ̂ "Oh, it's a good one. I think you'll really like it " She paused. "Amer- ica." '! America? What could I possibly teach this esteemed group about America? Then I remembered what one of my mentors, Bill Lazier, told me about effective teaching: Don't try to come up with the right answers; focus on coming up with good questions, 'j I pondered and puzzled and finally settled upon the ques - tion: Is America renewing its greatness, or is America dangerously on the cusp of falling from great to good ? While I intended the question to be rhetorical (I believe America carries a responsibility to continuously renew itself, and it has met that responsibility throughout its history), the West Point gathering nonetheless erupted into an intense debate. Half of the participants argued that America stands as strong as ever, while the other half contended that America teeters on the edge of dechne. 'i History shows, repeatedly, that the mighty can faU. The Egyptian Old King - dom, the Chou Dynasty, the Hittite Empire -all fell. Athens fell, Rome fell. Even Britain, which stood a century before as a global superpower, saw its position erode. Is that the U.S.'s fate? Or will America always find a way to meet Lincoln's challenge to be the last best hope of Earth? 'j At a break, the chief exec- utive of one of America's most successful companies pulled me aside, "r ve been thinking about your question in the context of my company all morning," he said. "We've had tremendous success in recent years, and I worry about that. So what I want to know is: How would you know?" >] "What do you mean?" I asked. <] "when you are at the top of the world, the most powerful nation on earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you're akeady on the path of decline." that 027 how to play it 060 from the book, how the mighty fall and why some companies never give in by jim collins, ©200çbyjim collins may 25,2009 i businessweek in depth 028 question—how would you know?—captured my imagination and became part of the inspi- ration for this book. the dynamics of leadership-team behavidr how managers interact says a lot about the state of a company the silent creep of doom at our research lab, we'd already been dis- cussing the possibility of a project on corpo- rate decline, in part because some of the great companies we'd profiled in the books good to grzat and built to last had subsequently lost their positions of prominence. on one level this fact didn't cause much angst; just because a company falls doesn't invalidate what we can learn by studying that company when it was at its historical best. but on another level i found myself becom- ing increasingly curious: how do the mighty fall ? if some of the greatest companies in his - tory can go from iconic to irrelevant, what might we learn by studying their demise, and how can others avoid their fate? i returned from west point inspired to turn idle curios - ity into an active quest. might it be possible to detect decline early and reverse course—or even better, might we be able to practice pre- ventive medicine? i've come to see institutional decline like a disease: harder to detect but easier to cure in the early stages; easier to detect but harder to cure in the later stages. an institution can look strong on the outside but already be sick on the inside, dangerously on the cusp of a pre- cipitous fall. consider the rise and fall of one of the most storied companies in u.s. business history. in the wake of the 1906 san francisco earth- quake, a.p. giannini, founder of the fledgling bank of italy, found himself at odds with other bankers who wanted to impose up to a six- month moratorium on lending. his response; putting a plank across two barrels right in the middle of a busy pier and opening for busi- ness. "we are going to rebuild san francisco," he proclaimed. giannini lent to the little guy when the little guy need- ed it most, and his bank, later renamed bank of america, gained momentum—little guy by little guy, loan by loan, deposit by deposit, branch by hranch, expanding ever out - ward from san francisco. by 1945 it had surpassed chase national bank as the largest commercial bank in the world, and by the late 1970s it had grown to more than a thou- sand branches in more than a hundred countries. along the way it became admired not just for its size but also for its quality of management. (note of clarification: in iqq8, nationsbank acquired bank of america and took the name; teams on the way down people shield those ¡n power from unpleasant facts, fearful of penalties and criticism for shining light on the rough realities people assert strong opinions without providing data, evidence, or a solid argument the team leader has a very low questions-to-statements ratio, avoiding critical inpul and/or allowing sloppy reasoning and unsupported opinions team members acquiesce to a decision bul don't unify to make the decision successful—or worse, undermine it after the fact team members seek as much credit as possible for themselves, yet do not enjoy the confidence and admiration of their peers team members argue to look smart or to further their own interests rather than argue to find the best answers to support the overall cause the team conducts "autopsies with blame," seeking culprits rather than wisdom team members often fail to deliver exceptional results and blame other people or outside factors for setbacks, mistakes, and failures data: jim collins teams on the way up people bring forth grim fads—"come here and iook, man, this is ugly"—to be discussed; leaders never criticize those who bring forth harsh realities people bring data, evidence, logic, and solid arguments to the discussion the team leader employs a socratic style, using a high questions-to-state- ments ratio, challenging people, and pushing for penetrating insights team members unify behind a decision once made, then work to make the decision succeed, even if they viqorously disagreed with it each team member credits other people for success, yet enjoys the confidence and admiration of his or her peers team members argue and debate, not to improve their personal position but to find the best answers to support the overall cause the team conducts "autopsies without blame," mining wisdom from painful experiences each team member delivers excep- tional results, yet in the event of a setback each accepts full responsibility and learns from mistakes the bank of america described here is a different company than nationsbank.) entering the 1980s, bank of america held a revered posi- tion and was widely regarded as one of the greatest compa - nies in the world. within eight years it would post some of the biggest losses in u.s. banking history, rattle the finan- cial markets to the point of briefly depressing the u.s. dol- lar, watch its cumulative stock performance fall more than 80% behind the general stock market, face a serious take- over threat from a rival california bank, cut its dividend for the first time in 53 years, sell off its corporate headquarters to help meet capital requirements, see the last giannini fam- businessweek i may 25, 2009 030 üy board member resign in outrage, oust its chief executive, bring a former ceo out of retirement to save the company, and endure a barrage of critical articles in the business press, with titles such as "the incredible shrinking bank" and "better stewards (corporate and otherwise) went down on the titanic." anyone predicting such a fall as the decade began would have been viewed as a pessimistic outlier. if a company as powerful and well -positioned as bank of america in the late 1970s could fall so far, so hard, so quick- ly, then any company can. if companies such as motorola, circuit city, and fannie mae—icons that once served as paragons of excellence—can succumb to the forces of grav- ity, then no one is immune. if companies such as zenith and a&p, once the unquestioned champions in their fields, can plummet from great to irrelevant, then we should be wary about our own success. every institution is vulnerable, no matter how great. there is no law of nature that the most powerful will inevitably re - main at the top. anyone can fall, and most eventually do. but all is not gloom. by understanding the five stages of decline we uncovered in our research for how the mighty fall, leaders can substantially increase the odds of revers - ing decline before it is too late—or even better, stave off de - cline in the first place. decline can be avoided. the seeds of decline can be detected early. and decline can be reversed (as we've seen with notable cases such as ibm, hewlett- packard, merck, and nucor). the mighty can fall, but they can often rise again. stages ecline one of our pivotal findings is that companies can appear to be thriving well after the seeds of decline have been sown and taken root. in fact, a company can reach the fourth of the five stages before its deterioration becomes fully apparent. businessweek i may 25,2009 in depth five stages of decline i feel a bit like a snake tbat swallowed two watermelons at once. i 'd started this project as a diversion to engage my pen while completing the research for my next full-sized book on what it takes to endure and prevail when the world around yon spins ont of control (based on a six-year research project with my colleague morten hansen). bnt after my west point visit, the question of how the mighty fall evolved into a topic of passionate curiosity channeled into a research effort that led to this small book. in one sense, my research colleagues and i have been studying failure and mediocrity for years. our research methodology relies on contrast, studying those companies that became great in contrast to those that did not and ask- grasping for salvation capitulation to irrelevance or death • ing: "what's different?" but we had not explicitly delved into the question: why do some great companies fall, and how far can a company fall and still come back ? i began to joke with my colleagues: "we're turning to the dark side." we had a substantial amount of data collected from prior research studies, consisting of more than 6,ooo years of combined corporate history. from this data set, we identified a set of once -great companies that fell and constructed a set of "success contrasts" that had risen in the same industries during the era when our primary study companies declined. our principal effort focused on a two-part question: what happened leading up to the point at which decline became visible, and what did the company do once it began to fall? our comparative and historical analysis yielded a de- scriptive model of how the mighty fall that consists of five stages that proceed in sequence. and here's the really scary part: you do not visibly fall until stage 4! companies can be well into stage 3 decline and still look and feel great, yet be right on the cusp of a huge fall. decline can sneak up on you, and—seemingly all of a sudden-you're in big trouble. even so, i ultimately see this as a work of well-founded hope. with a road map to decline in hand, institutions heading downhill might be able to apply the brakes early and reverse course. we've found companies that recovered- in some cases, coming back even stronger—a/ïer having crashed down into the depths of stage 4. our research in- dicates that organizational decline is largely self-inflicted, and recovery largely within our own control. so long as you never tall all the way to stage 5, you can rebuild. while a full exploration of the five stages is beyond the scope of this excerpt, here is a brief summary: stage 1: hubris born of success. great enterprises can become insulated by success ; accumulated momentum can carry an enterprise forward for a while, even if its lead- ers make poor decisions or lose discipline. stage l kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underly- ing factors that created success in the first place. when the rhetoric of success {"we're successful because we do these specific things") replaces penetrating understanding and insight {"we're successful because we understand why we do these specific things and under what conditions they would no longer work" ), decline will very likely follow. "when="" you="" are="" at="" the="" top="" of="" the="" world,="" the="" most="" powerful="" nation="" on="" earth,="" the="" most="" successful="" company="" in="" your="" industry,="" the="" best="" player="" in="" your="" game,="" your="" very="" power="" and="" success="" might="" cover="" up="" the="" fact="" that="" you're="" akeady="" on="" the="" path="" of="" decline."="" that="" 027="" how="" to="" play="" it="" 060="" from="" the="" book,="" how="" the="" mighty="" fall="" and="" why="" some="" companies="" never="" give="" in="" by="" jim="" collins,="" ©200çbyjim="" collins="" may="" 25,2009="" i="" businessweek="" in="" depth="" 028="" question—how="" would="" you="" know?—captured="" my="" imagination="" and="" became="" part="" of="" the="" inspi-="" ration="" for="" this="" book.="" the="" dynamics="" of="" leadership-team="" behavidr="" how="" managers="" interact="" says="" a="" lot="" about="" the="" state="" of="" a="" company="" the="" silent="" creep="" of="" doom="" at="" our="" research="" lab,="" we'd="" already="" been="" dis-="" cussing="" the="" possibility="" of="" a="" project="" on="" corpo-="" rate="" decline,="" in="" part="" because="" some="" of="" the="" great="" companies="" we'd="" profiled="" in="" the="" books="" good="" to="" grzat="" and="" built="" to="" last="" had="" subsequently="" lost="" their="" positions="" of="" prominence.="" on="" one="" level="" this="" fact="" didn't="" cause="" much="" angst;="" just="" because="" a="" company="" falls="" doesn't="" invalidate="" what="" we="" can="" learn="" by="" studying="" that="" company="" when="" it="" was="" at="" its="" historical="" best.="" but="" on="" another="" level="" i="" found="" myself="" becom-="" ing="" increasingly="" curious:="" how="" do="" the="" mighty="" fall="" if="" some="" of="" the="" greatest="" companies="" in="" his="" -="" tory="" can="" go="" from="" iconic="" to="" irrelevant,="" what="" might="" we="" learn="" by="" studying="" their="" demise,="" and="" how="" can="" others="" avoid="" their="" fate?="" i="" returned="" from="" west="" point="" inspired="" to="" turn="" idle="" curios="" -="" ity="" into="" an="" active="" quest.="" might="" it="" be="" possible="" to="" detect="" decline="" early="" and="" reverse="" course—or="" even="" better,="" might="" we="" be="" able="" to="" practice="" pre-="" ventive="" medicine?="" i've="" come="" to="" see="" institutional="" decline="" like="" a="" disease:="" harder="" to="" detect="" but="" easier="" to="" cure="" in="" the="" early="" stages;="" easier="" to="" detect="" but="" harder="" to="" cure="" in="" the="" later="" stages.="" an="" institution="" can="" look="" strong="" on="" the="" outside="" but="" already="" be="" sick="" on="" the="" inside,="" dangerously="" on="" the="" cusp="" of="" a="" pre-="" cipitous="" fall.="" consider="" the="" rise="" and="" fall="" of="" one="" of="" the="" most="" storied="" companies="" in="" u.s.="" business="" history.="" in="" the="" wake="" of="" the="" 1906="" san="" francisco="" earth-="" quake,="" a.p.="" giannini,="" founder="" of="" the="" fledgling="" bank="" of="" italy,="" found="" himself="" at="" odds="" with="" other="" bankers="" who="" wanted="" to="" impose="" up="" to="" a="" six-="" month="" moratorium="" on="" lending.="" his="" response;="" putting="" a="" plank="" across="" two="" barrels="" right="" in="" the="" middle="" of="" a="" busy="" pier="" and="" opening="" for="" busi-="" ness.="" "we="" are="" going="" to="" rebuild="" san="" francisco,"="" he="" proclaimed.="" giannini="" lent="" to="" the="" little="" guy="" when="" the="" little="" guy="" need-="" ed="" it="" most,="" and="" his="" bank,="" later="" renamed="" bank="" of="" america,="" gained="" momentum—little="" guy="" by="" little="" guy,="" loan="" by="" loan,="" deposit="" by="" deposit,="" branch="" by="" hranch,="" expanding="" ever="" out="" -="" ward="" from="" san="" francisco.="" by="" 1945="" it="" had="" surpassed="" chase="" national="" bank="" as="" the="" largest="" commercial="" bank="" in="" the="" world,="" and="" by="" the="" late="" 1970s="" it="" had="" grown="" to="" more="" than="" a="" thou-="" sand="" branches="" in="" more="" than="" a="" hundred="" countries.="" along="" the="" way="" it="" became="" admired="" not="" just="" for="" its="" size="" but="" also="" for="" its="" quality="" of="" management.="" (note="" of="" clarification:="" in="" iqq8,="" nationsbank="" acquired="" bank="" of="" america="" and="" took="" the="" name;="" teams="" on="" the="" way="" down="" people="" shield="" those="" ¡n="" power="" from="" unpleasant="" facts,="" fearful="" of="" penalties="" and="" criticism="" for="" shining="" light="" on="" the="" rough="" realities="" people="" assert="" strong="" opinions="" without="" providing="" data,="" evidence,="" or="" a="" solid="" argument="" the="" team="" leader="" has="" a="" very="" low="" questions-to-statements="" ratio,="" avoiding="" critical="" inpul="" and/or="" allowing="" sloppy="" reasoning="" and="" unsupported="" opinions="" team="" members="" acquiesce="" to="" a="" decision="" bul="" don't="" unify="" to="" make="" the="" decision="" successful—or="" worse,="" undermine="" it="" after="" the="" fact="" team="" members="" seek="" as="" much="" credit="" as="" possible="" for="" themselves,="" yet="" do="" not="" enjoy="" the="" confidence="" and="" admiration="" of="" their="" peers="" team="" members="" argue="" to="" look="" smart="" or="" to="" further="" their="" own="" interests="" rather="" than="" argue="" to="" find="" the="" best="" answers="" to="" support="" the="" overall="" cause="" the="" team="" conducts="" "autopsies="" with="" blame,"="" seeking="" culprits="" rather="" than="" wisdom="" team="" members="" often="" fail="" to="" deliver="" exceptional="" results="" and="" blame="" other="" people="" or="" outside="" factors="" for="" setbacks,="" mistakes,="" and="" failures="" data:="" jim="" collins="" teams="" on="" the="" way="" up="" people="" bring="" forth="" grim="" fads—"come="" here="" and="" iook,="" man,="" this="" is="" ugly"—to="" be="" discussed;="" leaders="" never="" criticize="" those="" who="" bring="" forth="" harsh="" realities="" people="" bring="" data,="" evidence,="" logic,="" and="" solid="" arguments="" to="" the="" discussion="" the="" team="" leader="" employs="" a="" socratic="" style,="" using="" a="" high="" questions-to-state-="" ments="" ratio,="" challenging="" people,="" and="" pushing="" for="" penetrating="" insights="" team="" members="" unify="" behind="" a="" decision="" once="" made,="" then="" work="" to="" make="" the="" decision="" succeed,="" even="" if="" they="" viqorously="" disagreed="" with="" it="" each="" team="" member="" credits="" other="" people="" for="" success,="" yet="" enjoys="" the="" confidence="" and="" admiration="" of="" his="" or="" her="" peers="" team="" members="" argue="" and="" debate,="" not="" to="" improve="" their="" personal="" position="" but="" to="" find="" the="" best="" answers="" to="" support="" the="" overall="" cause="" the="" team="" conducts="" "autopsies="" without="" blame,"="" mining="" wisdom="" from="" painful="" experiences="" each="" team="" member="" delivers="" excep-="" tional="" results,="" yet="" in="" the="" event="" of="" a="" setback="" each="" accepts="" full="" responsibility="" and="" learns="" from="" mistakes="" the="" bank="" of="" america="" described="" here="" is="" a="" different="" company="" than="" nationsbank.)="" entering="" the="" 1980s,="" bank="" of="" america="" held="" a="" revered="" posi-="" tion="" and="" was="" widely="" regarded="" as="" one="" of="" the="" greatest="" compa="" -="" nies="" in="" the="" world.="" within="" eight="" years="" it="" would="" post="" some="" of="" the="" biggest="" losses="" in="" u.s.="" banking="" history,="" rattle="" the="" finan-="" cial="" markets="" to="" the="" point="" of="" briefly="" depressing="" the="" u.s.="" dol-="" lar,="" watch="" its="" cumulative="" stock="" performance="" fall="" more="" than="" 80%="" behind="" the="" general="" stock="" market,="" face="" a="" serious="" take-="" over="" threat="" from="" a="" rival="" california="" bank,="" cut="" its="" dividend="" for="" the="" first="" time="" in="" 53="" years,="" sell="" off="" its="" corporate="" headquarters="" to="" help="" meet="" capital="" requirements,="" see="" the="" last="" giannini="" fam-="" businessweek="" i="" may="" 25,="" 2009="" 030="" üy="" board="" member="" resign="" in="" outrage,="" oust="" its="" chief="" executive,="" bring="" a="" former="" ceo="" out="" of="" retirement="" to="" save="" the="" company,="" and="" endure="" a="" barrage="" of="" critical="" articles="" in="" the="" business="" press,="" with="" titles="" such="" as="" "the="" incredible="" shrinking="" bank"="" and="" "better="" stewards="" (corporate="" and="" otherwise)="" went="" down="" on="" the="" titanic."="" anyone="" predicting="" such="" a="" fall="" as="" the="" decade="" began="" would="" have="" been="" viewed="" as="" a="" pessimistic="" outlier.="" if="" a="" company="" as="" powerful="" and="" well="" -positioned="" as="" bank="" of="" america="" in="" the="" late="" 1970s="" could="" fall="" so="" far,="" so="" hard,="" so="" quick-="" ly,="" then="" any="" company="" can.="" if="" companies="" such="" as="" motorola,="" circuit="" city,="" and="" fannie="" mae—icons="" that="" once="" served="" as="" paragons="" of="" excellence—can="" succumb="" to="" the="" forces="" of="" grav-="" ity,="" then="" no="" one="" is="" immune.="" if="" companies="" such="" as="" zenith="" and="" a&p,="" once="" the="" unquestioned="" champions="" in="" their="" fields,="" can="" plummet="" from="" great="" to="" irrelevant,="" then="" we="" should="" be="" wary="" about="" our="" own="" success.="" every="" institution="" is="" vulnerable,="" no="" matter="" how="" great.="" there="" is="" no="" law="" of="" nature="" that="" the="" most="" powerful="" will="" inevitably="" re="" -="" main="" at="" the="" top.="" anyone="" can="" fall,="" and="" most="" eventually="" do.="" but="" all="" is="" not="" gloom.="" by="" understanding="" the="" five="" stages="" of="" decline="" we="" uncovered="" in="" our="" research="" for="" how="" the="" mighty="" fall,="" leaders="" can="" substantially="" increase="" the="" odds="" of="" revers="" -="" ing="" decline="" before="" it="" is="" too="" late—or="" even="" better,="" stave="" off="" de="" -="" cline="" in="" the="" first="" place.="" decline="" can="" be="" avoided.="" the="" seeds="" of="" decline="" can="" be="" detected="" early.="" and="" decline="" can="" be="" reversed="" (as="" we've="" seen="" with="" notable="" cases="" such="" as="" ibm,="" hewlett-="" packard,="" merck,="" and="" nucor).="" the="" mighty="" can="" fall,="" but="" they="" can="" often="" rise="" again.="" stages="" ecline="" one="" of="" our="" pivotal="" findings="" is="" that="" companies="" can="" appear="" to="" be="" thriving="" well="" after="" the="" seeds="" of="" decline="" have="" been="" sown="" and="" taken="" root.="" in="" fact,="" a="" company="" can="" reach="" the="" fourth="" of="" the="" five="" stages="" before="" its="" deterioration="" becomes="" fully="" apparent.="" businessweek="" i="" may="" 25,2009="" in="" depth="" five="" stages="" of="" decline="" i="" feel="" a="" bit="" like="" a="" snake="" tbat="" swallowed="" two="" watermelons="" at="" once.="" i="" 'd="" started="" this="" project="" as="" a="" diversion="" to="" engage="" my="" pen="" while="" completing="" the="" research="" for="" my="" next="" full-sized="" book="" on="" what="" it="" takes="" to="" endure="" and="" prevail="" when="" the="" world="" around="" yon="" spins="" ont="" of="" control="" (based="" on="" a="" six-year="" research="" project="" with="" my="" colleague="" morten="" hansen).="" bnt="" after="" my="" west="" point="" visit,="" the="" question="" of="" how="" the="" mighty="" fall="" evolved="" into="" a="" topic="" of="" passionate="" curiosity="" channeled="" into="" a="" research="" effort="" that="" led="" to="" this="" small="" book.="" in="" one="" sense,="" my="" research="" colleagues="" and="" i="" have="" been="" studying="" failure="" and="" mediocrity="" for="" years.="" our="" research="" methodology="" relies="" on="" contrast,="" studying="" those="" companies="" that="" became="" great="" in="" contrast="" to="" those="" that="" did="" not="" and="" ask-="" grasping="" for="" salvation="" capitulation="" to="" irrelevance="" or="" death="" •="" ing:="" "what's="" different?"="" but="" we="" had="" not="" explicitly="" delved="" into="" the="" question:="" why="" do="" some="" great="" companies="" fall,="" and="" how="" far="" can="" a="" company="" fall="" and="" still="" come="" back="" i="" began="" to="" joke="" with="" my="" colleagues:="" "we're="" turning="" to="" the="" dark="" side."="" we="" had="" a="" substantial="" amount="" of="" data="" collected="" from="" prior="" research="" studies,="" consisting="" of="" more="" than="" 6,ooo="" years="" of="" combined="" corporate="" history.="" from="" this="" data="" set,="" we="" identified="" a="" set="" of="" once="" -great="" companies="" that="" fell="" and="" constructed="" a="" set="" of="" "success="" contrasts"="" that="" had="" risen="" in="" the="" same="" industries="" during="" the="" era="" when="" our="" primary="" study="" companies="" declined.="" our="" principal="" effort="" focused="" on="" a="" two-part="" question:="" what="" happened="" leading="" up="" to="" the="" point="" at="" which="" decline="" became="" visible,="" and="" what="" did="" the="" company="" do="" once="" it="" began="" to="" fall?="" our="" comparative="" and="" historical="" analysis="" yielded="" a="" de-="" scriptive="" model="" of="" how="" the="" mighty="" fall="" that="" consists="" of="" five="" stages="" that="" proceed="" in="" sequence.="" and="" here's="" the="" really="" scary="" part:="" you="" do="" not="" visibly="" fall="" until="" stage="" 4!="" companies="" can="" be="" well="" into="" stage="" 3="" decline="" and="" still="" look="" and="" feel="" great,="" yet="" be="" right="" on="" the="" cusp="" of="" a="" huge="" fall.="" decline="" can="" sneak="" up="" on="" you,="" and—seemingly="" all="" of="" a="" sudden-you're="" in="" big="" trouble.="" even="" so,="" i="" ultimately="" see="" this="" as="" a="" work="" of="" well-founded="" hope.="" with="" a="" road="" map="" to="" decline="" in="" hand,="" institutions="" heading="" downhill="" might="" be="" able="" to="" apply="" the="" brakes="" early="" and="" reverse="" course.="" we've="" found="" companies="" that="" recovered-="" in="" some="" cases,="" coming="" back="" even="" stronger—a/ïer="" having="" crashed="" down="" into="" the="" depths="" of="" stage="" 4.="" our="" research="" in-="" dicates="" that="" organizational="" decline="" is="" largely="" self-inflicted,="" and="" recovery="" largely="" within="" our="" own="" control.="" so="" long="" as="" you="" never="" tall="" all="" the="" way="" to="" stage="" 5,="" you="" can="" rebuild.="" while="" a="" full="" exploration="" of="" the="" five="" stages="" is="" beyond="" the="" scope="" of="" this="" excerpt,="" here="" is="" a="" brief="" summary:="" stage="" 1:="" hubris="" born="" of="" success.="" great="" enterprises="" can="" become="" insulated="" by="" success="" ;="" accumulated="" momentum="" can="" carry="" an="" enterprise="" forward="" for="" a="" while,="" even="" if="" its="" lead-="" ers="" make="" poor="" decisions="" or="" lose="" discipline.="" stage="" l="" kicks="" in="" when="" people="" become="" arrogant,="" regarding="" success="" virtually="" as="" an="" entitlement,="" and="" they="" lose="" sight="" of="" the="" true="" underly-="" ing="" factors="" that="" created="" success="" in="" the="" first="" place.="" when="" the="" rhetoric="" of="" success="" {"we're="" successful="" because="" we="" do="" these="" specific="" things")="" replaces="" penetrating="" understanding="" and="" insight="" {"we're="" successful="" because="" we="" understand="" why="" we="" do="" these="" specific="" things="" and="" under="" what="" conditions="" they="" would="" no="" longer="" work"="" ),="" decline="" will="" very="" likely="">