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How the Mighty Fall

And Why Some Companies Never Give In

By Jim Collins
15-minute read
Audio available
How the Mighty Fall: And Why Some Companies Never Give In by Jim Collins

In How the Mighty Fall, influential business expert Jim Collins explores how even successful companies can suddenly collapse, especially if they make the wrong decisions. He also offers leaders advice to prevent them from making the same mistakes.

  • Students majoring in business
  • Anyone unsure which businesses to invest in
  • Start-up CEOs looking to grow their business long term

Jim Collins is a best-selling business expert and author, having written the highly successful works Good to Great and Built to Last. He contributes to Harvard Business Review, Fortune and Businessweek, and he advises business leaders in the social and corporate sectors.

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How the Mighty Fall

And Why Some Companies Never Give In

By Jim Collins
  • Read in 15 minutes
  • Audio & text available
  • Contains 9 key ideas
How the Mighty Fall: And Why Some Companies Never Give In by Jim Collins
Synopsis

In How the Mighty Fall, influential business expert Jim Collins explores how even successful companies can suddenly collapse, especially if they make the wrong decisions. He also offers leaders advice to prevent them from making the same mistakes.

Key idea 1 of 9

Every company and institution, no matter how great, is vulnerable to decline.

In the first few centuries after the birth of Christ, the Roman Empire dominated Europe and the Middle East. It was massive, stretching from Portugal in the West to Iran in the East. Among those alive back then, there would have been no doubt: this gigantic, all-powerful empire would last forever. Alas, it did not: within just a few centuries it was gone, banished to the trash heap of history.

The decline of the Roman Empire shows that, no matter how vast or successful something is, it will always be in danger of collapsing.

But what causes decline? What can make a huge entity come crashing down?

The decline of a large organization is always self-inflicted: collapse isn’t the fault of outside factors or bad luck; it’s the direct result of mismanagement.

Remember how everybody had a Nokia phone 15 years ago?

In the years since, the company has gone from being the market leader to having a mere 3 percent market share. Why?

While their competitors, such as Apple and Samsung, were researching and innovating in smartphone technology, Nokia’s management decided to innovate in other, less profitable areas. Thus, when smartphones became popular, Nokia was completely out of the race.

At this point, it’s important to point out that we’re not talking about laziness. Successful firms very rarely collapse because they fail to act: usually it’s because they act in the wrong way. In fact, failing firms often show very high levels of innovation and energy.

Bank of America is a great example of this: in the 1980s, the bank was eager to update outmoded practices. They hired a young, energetic CEO, they closed huge swathes of loss-making branches and they ended the practice of hiring people for life. Yet throughout this period, the company posted some of the most spectacular losses in banking history.

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