Stage 4: Grasping For Salvation (bloggers book study)

I have to start with an apology. Due to my eye being the color and size of a ripe tomato, a trip to the urgent care, and a frantic search for insurance information across 3 cities my blog feel by the wayside. I apologize!!! Now lets get this thing on track:

  We are in Jim Collins book “How The Mighty Fall.” I read about stage 4 and grasping for salvation. This chapter is about how companies in their failing stages will grasp for anything that seems to bring help and a change to the company. Jim Collins, in this chapter, informs us that this can be disastrous.

HP was a booming and successful company but in the late 90’s it began to take a downward turn. In 98 they “hit a wall” so the existing CEO stepped down and was replaced by Carly Fiorina. “HP had hired the most powerful, glamorous, exciting, magnetic ,superstar female executive in the world” With the hire of Carly it created a media frenzy. “Carly Fever” was everywhere. She vowed a dramatic change for HP.

Meanwhile, IBM was facing struggles of its own. Louis V Herstner Jr. was brought in from the inside to lead out of this mess.  Herstner took a much different approach. His key priorities were restructuring the inside and making sure key people were on board. He studied where change was needed and attacked it. From an outsideres perspective it seemed as though he was doing nothing.

In this end the results were the exact opposite too; and where it really counted- with increased profitability for IBM and unsteady stock for HP. In 2005 Fiorina was let go from the company. Collins expresses that the firing was not solely her fault. She was exactly what the board wanted a quick dynamic outside fix. She was HP’s “silver bullet” Collins warns this can be destructive for any organization.

Collins used an example of when he was mountain climbing as a teenager. He began to fall and then his fear kicked in. He began grasping and let go of his anchor rope. This led to more danger (thankfully his instructor had his backup rope and saved him) Collins says this is what companies will do. In downturn they will grasp for anything.

Collins gives these statistics: 8 out of 11 fallen companies went for an outside CEO. Over 90% of CEOs that led from good to great where from the inside. Collins tells us to get back with a calm, clear headed and focused approach. “Breath. Calm yourself. Think. Focus. Aim. Take one shot at a time”

 Here are some markers for stage 4

- A series of silver bullets

- Grasping for a leader as savior

- Panic and haste

- Radical change revolution with fan fare

- Hype precedes results

- Initial upswing followed by disappointment

- Confusion and cynicism

- Chronic restructuring and erosion of financial strength

 

Be sure to check out Yoel’s blog as the book study rolls on.

Peace and love,

Genie