m-cause

You wanted growth — faster. We want to slow down Umair Haque, Gen M Manifesto

In the latest book “How the Mighty Fall” Jim Collins delves into the reasons why promising organizations and countries fall.  Collins outlines one stage of decline that particularly stands out for me, in light of our current economic plight–the “undisciplined pursuit of more”.  Below are the key stages of decline that an organization or nation experiences before the mighty fall, according to the book.

Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death

Once leaders start believing that their organization’s success is due primarily to their own personal efforts and smart moves (stage 1) the slippery slope to irrelevance gets steep in a hurry and stage 2 begins–the undisciplined pursuit of more.

Sloppy Greed:

Greed is a natural outgrowth of hubris.  As people around an organization become enamored with their own successes, inevitably they must prove themselves again in order to meet shareholder demands.  And, believing they can do anything, they tend to overreach in an undisciplined way to prove their mettle once more.

What is interesting about stage 2, as Collins points out, is that most people would think that stage 2 in the decline of a company would stem from complacency or laziness.  This is not the case.  Instead, Sloppy Greed most often leads to stages 3 & 4.

Sloppy Greed manifests itself in calls for more scale, more growth, more acclaim, more & more of whatever, with a complete lack of discipline.  Companies in Stage 2 stray from their sense of a larger purpose.

As I read the book, one example from Collins that was particularly poignant came from Merck. In 1995, Merck decided to pursue a “growth at all costs” strategy–calling out growth as its number one organizational objective.  Lusting for Über growth, Merck bet on Vioxx without fully investigating potentially worrisome data on cardiovascular risk.  Merck ultimately pulled Vioxx , but the incident led to a huge drop in market cap for the company. Merck learned that when you are willing to grow at almost any cost, you tend to look past your original purpose or reason for being.

Growth of a different sort

Later in the book, Collins observes “The greatest leaders do seek growth - growth in performance, growth in distinctive impact, growth in creativity, growth in people - but they do not succumb to growth that undermines long-term value. And they certainly do not confuse growth with excellence. Big does not equal great, and great does not equal big.

Notice that Collins never mentions top line or bottom line growth in the above paragraph.  Instead, he calls for companies to think about growth differently, focusing on distinctive impact, people, performance and creativity.  By focusing on these areas in a disciplined way, the top & bottom lines should both benefit.

At the individual level:

The undisciplined pursuit of more can be applied to the individual level as well.  Many of us have probably experienced a time when we fell victim to stage #2.  Inevitably, this starts after we begin “eating our own dog food” (stage #1) without ever pausing to consider the purpose or rationale behind our actions.  As always, humility is needed in big quantities to avoid reaching beyond our capacities and falling into decline.  Being overly ambitious is simply not balanced.

Check out the book & let me know what you think.

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