Why have the great corporations, both in North America and elsewhere, fallen into such disrepute, and failure? Some very well known and once invincible bastions of our capitalism system have either failed or are in trouble.

Jim Collins, author of Good To Great, and of his new book, How The Mighty Have Fallen, gives us a glimpse into the reasons for the fall.

Collins outlines the five stages of corporate decline as: hubris born of success (arrogance) the undisciplined pursuit of more (greed), the denial of risk and peril; grasping for salvation (being a victim); and capitulation to irrelevance or death.

Collins poses a critical question: is the U.S. or even North America, on the brink of decline? Is it possible that the predominant paradigm of capitalism practiced so well in the U.S., may actually be the cause of our economic problems?

The kind of leadership we have in organizations is critical to the decline of the corporate world. Collins outlines the characteristics of teamwork that's gone sideways in organizations as : leaders asserting strong opinions without any evidence; team members passively accepting decisions but not actively trying to make the decisions work; team leaders asking few questions and avoiding critical input; team members seeking individual credit and self interest rather than the team's interests; teams blaming someone when things go wrong; and teams failing to deliver results.

In contrast, Collins points to the kind of leadership that has helped companies remain successful even through the recession: the truth is told by everyone in the organization to leaders; evidence supports decisions; teamwork is marked by extensive questioning and feedback; team members make decisions work once they're made; team members credit each other for success; failures are seen as learning experiences, and no one is scapegoated; each team member is accountable for results and delivers them without excuses.

Collins provides a bright side to the picture by observing that the real courageous leaders in organizations don't dwell on what's gone wrong, or act like a victim, but rather these leaders see failure as a state of mind and when states mind are changed, reality changes.

 

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