How the mighty fall

I was early for my dinner with old friends from Petron of yesteryears. We still get together, about six or seven of us depending on who is in town, to celebrate delayed birthdays and exchange notes on how life has been. With an hour to kill, I found myself in the Serendra branch of A Different Bookstore and finally got a copy of How the Mighty Fall, a book by management guru Jim Collins.

Students and practitioners of management remember Jim Collins as the writer of two bestselling books, Built to Last and Good to Great. His past work focused on corporations that became great icons in the world of business. Collins did not attempt to come up with a formula for greatness but rather, distilled the qualities that elevated some companies to greatness.

But then again, greatness even for corporations can be fleeting. The economic turbulence we have all been experiencing lately had knocked down some of those great names from their pedestals. That didn’t cause Collins distress for having made bad picks. Rather it gave him the excellent reason to do new research on what made great corporations lose their luster and fall along the wayside of mediocrity.

The product of this new research of Collins is a rather thin book entitled How the Mighty Fall. I have read reviews of that book from foreign media but finding a copy was difficult until I dropped by Cat Uy’s A Different Bookstore (branches in Serendra and Eastwood). But no, I didn’t get a discount because I was told the book is already discounted at less than a thousand pesos. At just about the cost of my dinner that evening, it was a good investment.

In his landmark book Good to Great, Jim Collins wrote that “greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice.” That sounds like something good to remember at this time when the world’s economic environment is littered with failed companies once upon a time considered among the great.

In fact, I am tempted to apply that thought to nation building. Marcos promised us greatness many years ago… When I was just 16 and a freshman in college, his campaign slogan was “this nation can be great again.” Again? I am about to apply for a senior citizen card in six months and even a glimmer of national greatness still eludes my generation of Filipinos.

Greatness, Collins wrote, is not a function of circumstance but a matter of conscious choice. He wrote that with corporations in mind. But maybe, in applying that to our country, we, the Filipino people have not made a conscious choice for greatness. Could it be that we have always been happy with mediocrity? Will we ever make that conscious choice to be great as a nation? Or will some of us who can lead us to greatness just give up and migrate to nations that are already great?

For corporations and nations that are already great, what could make them “ungreat”? It depends on the leadership… of corporations and nations. In this regard, Collins writes in his latest book that “in this era of corporate failures, our greatest enemy is smugness…” After these many years under Ate Glue, we know what smugness is all about.

Smugness is a word that describes the current administration perfectly. They no longer care what people think. As such, they no longer care to deliver the goods expected of them. This is why we remain downgraded to Category 2 by the US FAA in terms of aviation safety standards and regulation. This is why the Ombudsman is sleeping on its job of stopping corruption. This is why the President’s son can look smug and dare everyone to sue him as he shrugs off unexplained wealth accusations in a nationwide television interview.

For corporations or for countries, I find the research and conclusions of Collins relevant to our situation today. In the corporate world, as presumably it is in a country, decline or failure to progress is brought about by a leadership’s hubris. Great companies (and managers) can get insulated by success or even by just an exaggerated sense of one’s ability.

Stage 1 towards decline kicks in when people become arrogant and they lose sight of the true underlying factors that creates success… they overestimate their own merit and capabilities and have succumbed to hubris.

Stage 2 is undisciplined pursuit of more than they can handle. According to Collins, companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence or both. When an organization (or a bureaucracy) grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall.

Stage 3 is denial of risk and peril. Internal warning signs begin to mount at this stage but external results remain strong enough to “explain away” disturbing data or to suggest that the difficulties are “temporary” or “cyclic’ or “not that bad.” Leaders in this stage discount negative data, amplify positive data and put a positive spin on ambiguous data.

Stage 4 is gasping for salvation. The cumulative peril or risks of Stage 3 assert themselves, throwing the enterprise (or a country) into a sharp decline. The leadership may respond by taking dramatic action that may appear positive but do not last. In grasping for salvation, they look up to a charismatic leader, a bold but untested strategy, a radical transformation, a game changing move or other silver bullet solutions that may not last.

Stage 5 is capitulation to irrelevance or death. The longer the company (or a country) remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. Accumulated setbacks and expensive false starts erode financial strength and individual spirit so that leaders abandon all hope of building a great future. They sell out or the institution atrophy into utter insignificance or simply die outright.

It is wrong however, to lose hope. The good to great transformation, Collins observed, never happened in one fell swoop. There is this need for consistency and persistence. Again, that’s true for a company as well as for a country.

There was no single defining action that led a company (or a country) to greatness, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, Collins observed that “the process resembled pushing a giant flywheel in one direction, turn upon turn, building momentum until a point of breakthrough and beyond.”

Thus we are told that achieving corporate (or national) greatness involves more of the boring task of managing the day-to-day humdrum of running the business (or the country) with the professional competence, determination and single-minded commitment of one who is about to perform a death defying high wire act, 24/7.

In other words, we have to find daily excitement in crunching numbers, managing people and delivering the services that contribute to the total effort of creating corporate or national greatness… not in the pomp and splendor of high office.

Translating all that into our national situation today, the more exciting, media savvy and flamboyant candidate is likely to be just the person to shun. The seemingly boring man who kept his nose clean and stayed in the shadows of his forebears until his time in the limelight has come is probably just what the nation needs at this time.

Perhaps, in our troubled times, we should look for inspirational good sense in the candidate’s personal life. We are no doubt a nation in decline. But we can arrest that decline with the right attitude and the right leader. We only have to listen to our inner voices telling us to embrace good and reject evil.

Simply, the mighty fall because they let their bad side take over. We simply shouldn’t let that happen.

Thieves

The wife of a Filipino congressman was awakened in the middle of the night by strange noises in the living room of their house in California. Alarmed, she nudged her congressman husband who refused to budge from his deep sleep.

Wife: wake up… check downstairs… there are thieves in the house…

Congressman: huh? Ah… what? Zzzzzzzzzzz

Wife: come on wake up… there are thieves in the house…

Congressman: (still very sleepy) huh? What? Thieves in the house… so what? Not just the house. There are many of them too at the Senate and Malacañang!

Boo Chanco’s e-mail address is [email protected]