RBS, Lehman Brothers, Tesco – new names join the list of stumbling titans every year. Jim Collins, who made his name studying firms that were Built to Last or who had gone from Good to Great, turned his mind to failure a few years back, to powerful effect.
Collins charts five stages in the arc of calamity. These are: 'hubris born of success', 'undisciplined pursuit of more', 'denial of risk and peril' (this may come just when you think you have 'cracked it' for good), followed by 'grasping for salvation', and 'capitulation to irrelevance or death'.
How do you avoid falling into this death spiral? Never settle for what you have achieved. Keep asking difficult questions. Do not ban bad news; on the contrary, seek it out. Explore what is going wrong and encourage a spirit of openness. Do not shoot messengers: reward and encourage them.