Summit 2010 - Session 2 - Jim Collins

Never, Ever, Give Up

5 Stages of Decline

Step 1 - Hubris Born of Success
It is not success that leads to failure, but outrageous arrogance that inflects suffering on the innocent
Bad decisions taken with good decision are still bad decisions

Three very different leaders
Darwin Smith - Kimberly Clarke
Had a charisma challenge
Funky looking guy, socially inept introvert
"I was just trying to be qualified for the job."

Anne Mulcahy - Xerox
She was magnetic
She did not expect to become CEO, but was determined to fix the company
She was surprised that she became CEO and never sought it
"I was an accidental CEO."

Herb Kelleher - Southwest Airlines
Not normal
Rents a stadium and resolves a trademark dispute with the CEO of other business with an arm wrestling match.
"When the going gets weird, the weird become CEO."

What do these three leaders share in common?

1. It is not about them
2. They never, ever give up
3. They are level 5 leaders

(What separates the Level 5 Leaders from the Level 4 Leaders is humility of a very special type - it is an absolute commitment to do whatever it takes)


  
Step 2 - Undisciplined Pursuit of More
Hubris leads one to think, "We're really good."
Overreaching is how the mighty fall
Packard's Law (named after David Packard, the founder of Hewlett Packard): "If you allow growth in revenues, growth in scale, growth in new adventures to exceed your ability to have enough of the right people in the key seats to execute on that growth brilliantly, you will fall." If you allow growth."
Do we have all of our key seats filled with fantastic people?
If the answer is no, we must resist expanding until we do.

Step 3 - Denial of Risk and Peril
There start to be warning signs that tell you that all is not right with the world.
The critical thing is that we deny it.
When a culture of denial takes hold, we are fully in Stage 3.
From the outside you really look great, which makes it really easy to deny.
The Stockdale Paradox - Named after Admiral Stockdale, from who we learned it.
He was the highest ranking resident of the Hanoi Hilton
"I never wavered in my faith that I would get out and I believed we would win.
The optimists didn't make it out
The optimists would say "We'll be out by Christmas"
And it would come and it would go and they died of a broken heart
The Faith that you will overcome in the end and that you will Never Give up must come face-to face and stand in the face of  the most brutal facts.
You must never, ever confuse faith and facts.

Step 4 - Grasping for Salvation
In Step 4 we start looking for a silver bullet - a radical break-through that will save the day or a CEO that can swoop in and make it all turn out okay.
Greatness is never a single event, it is an ongoing process.
It does not happen any other way

Step 5 - Capitulation to Irrelevance or Death
How did al of these great businesses survive - they had a reason to endure
Do you have an answer to the question: What would happen if we disappear?
Driven by purpose beyond money or success.
Examples: Apple and Sony
The most enduring enterprises place above all core values they will not compromise.

F. Scott Fitzgerald said, "The ability to hold two opposed ideas in the mind at the same time and still be able to function."

The answer behind any great human system: Preserving something core and stimulating progress.

Ten "To-Dos"
1 - Do your Diagnostics
Good to Great Diagnostic tool: (www.JimCollins.com)
2 - Count Your Blessings
Literally Count them
Do not stop until you hit at least 100.
When we begin to account for all the good things that happen to us that we did not cause, it's humbling.
3 - Examine Your Questions to Statements Ratio
Can you double it in the next year?
Instead of spending so much time trying to be interesting, spend time working on being interested
4 - Examine Your "Bus"
How many key seats are on your bus, how many are filled with fantastic people?
5 - Do the Leadership-Team Dynamics diagnostic from the Summit notebooks
Where is your team? On the Way up or on the way down?
6 - With that Team of Right people, create an inventory of the brutal facts
What are the brutal facts of our position?
7 - Develop the Discipline to stop doing
8 - Define results and demonstrate milestones
9 - Double your reach to young people by changing your practices without changing your values
10 - Set a B-HAG (Big Hairy Audacious Goal)