Download - Cam fraser bus_life_cycle_p_pt._slidewhow
The BusinessThe BusinessLife CycleLife Cycle
The BusinessThe BusinessLife CycleLife Cycle
FocalPoint 2010 Conference
EverythingEverythingmoves in moves in
predictable cyclespredictable cycles
Life CyclesLife CyclesLife CyclesLife Cycles
FocalPoint 2010 Conference
Knowing what part of the Knowing what part of the cycle you are in is a cycle you are in is a
prerequisite to choosing prerequisite to choosing effective strategieseffective strategies
Life CyclesLife CyclesLife CyclesLife Cycles
FocalPoint 2010 Conference
LEARNING LEARNING PHASEPHASE
Business Life CycleBusiness Life CycleBusiness Life CycleBusiness Life Cycle
FocalPoint 2010 Conference
GROWTHGROWTHPHASEPHASE
DECLINE DECLINE PHASEPHASE
XXXX Founder’s Trap
Every institutionEvery institutionis is vulnerablevulnerable
no matter how great.no matter how great.
– – Jim CollinsJim Collins
FocalPoint 2010 Conference
There is no There is no law oflaw ofnature nature that the most that the most
powerful will inevitably powerful will inevitably remain at the top.remain at the top.
– – Jim CollinsJim Collins
FocalPoint 2010 Conference
AnyAny business businesscan fail.can fail.
Most do!Most do!
FocalPoint 2010 Conference
FocalPoint 2010 Conference
Bank of AmericaBank of America
The World’s Largest Bank, Admired for its Management
Yet on the Cusp of Catastrophic Decline
From How the Mighty Fall by Jim Collins
600
400
200
0
-200
-400
-800
1972 1976 1980 1984 1987
Net Income 1972-1987 (in $ Millions)Net Income 1972-1987 (in $ Millions)
STAGE 1Hubris Born of Success
Five Stages Five Stages of Declineof DeclineFive Stages Five Stages of Declineof Decline
FocalPoint 2010 Conference
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
From How the Mighty Fall by Jim Collins
Stage Stage 11Stage Stage 11
FocalPoint 2010 Conference
HubrisHubris Born of Born of SuccessSuccess
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Stage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccessStage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccess
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
1.1. Success Entitlement, Success Entitlement, ArroganceArrogance
2.2. Neglect of Neglect of Core Core BusinessBusiness
3.3. “What” “What” replacesreplaces “Why “Why””
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccessStage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccess
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
Diagnostic ChecklistDiagnostic Checklist
4.4. Decline in Decline in LearningLearning OrientationOrientation
5.5. Discounting the Role Discounting the Role of of LuckLuck
Stage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccessStage Stage 1 1 –– Hubris Hubris Born of Born of SuccessSuccess
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
Diagnostic ChecklistDiagnostic Checklist
4.4. Decline in Decline in LearningLearning OrientationOrientation
5.5. Discounting the Role Discounting the Role of of LuckLuck
Stage Stage 22Stage Stage 22
FocalPoint 2010 Conference
UndisciplinedUndisciplined Pursuit of Pursuit of MoreMore
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
1.1. ConfusingConfusing “Big” “Big” with with “Great”“Great”
2.2. Undisciplined Undisciplined Discontinuous LeapsDiscontinuous Leaps
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
3.3. Declining proportion of Declining proportion of right people right people in in key seatskey seats
4.4. Easy cash Easy cash erodes cost erodes cost disciplinediscipline
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
5.5. BureaucracyBureaucracy subverts subverts disciplinediscipline
6.6. Problematic Problematic successionsuccession of powerof power
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
Stage Stage 2 2 –– Undisciplined Undisciplined Pursuit Pursuit of of MoreMore
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
7.7. Personal interests Personal interests placed placed above organizational above organizational interestsinterests
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 33Stage Stage 33
FocalPoint 2010 Conference
Denial Denial ofof Risk Risk andand PerilPeril
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Stage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPerilStage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPeril
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
1.1. Amplify the Amplify the positivepositive, , discount the negativediscount the negative
2.2. Big bets and bold goals Big bets and bold goals withoutwithout empirical empirical validationvalidation
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPerilStage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPeril
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
3.3. Incurring huge downside risk Incurring huge downside risk based on based on ambiguous dataambiguous data
4.4. Erosion of healthy Erosion of healthy teamteam dynamicsdynamics
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPerilStage Stage 3 3 –– Denial Denial of of RiskRisk & & PerilPeril
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
5.5. Externalizing blameExternalizing blame
6.6. Obsessive Obsessive reorganizationsreorganizations
7.7. Imperious Imperious detachmentdetachment
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 44Stage Stage 44
FocalPoint 2010 Conference
GraspingGrasping forfor SalvationSalvation
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Stage Stage 4 4 –– Grasping Grasping forfor Salvation SalvationStage Stage 4 4 –– Grasping Grasping forfor Salvation Salvation
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
1.1. A series of A series of silver bulletssilver bullets
2.2. Grasping for a Grasping for a leader-leader-as-savioras-savior
3.3. Panic Panic and and hastehaste
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 4 4 –– Grasping Grasping forfor Salvation SalvationStage Stage 4 4 –– Grasping Grasping forfor Salvation Salvation
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
4.4. Radical change and Radical change and “revolution” “revolution” with fan farewith fan fare
5.5. HypeHype precedes results precedes results6.6. Initial upswing followed by Initial upswing followed by
disappointmentsdisappointments
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 4 4 –– Grasping Grasping forfor Salvation SalvationStage Stage 4 4 –– Grasping Grasping forfor Salvation Salvation
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
7.7. ConfusionConfusion and and cynicismcynicism
8.8. Chronic restructuring Chronic restructuring and and erosionerosion of of financial financial strengthstrength
Diagnostic ChecklistDiagnostic Checklist
Stage Stage 55Stage Stage 55
FocalPoint 2010 Conference
Capitulation Capitulation to to Irrelevance Irrelevance oror DeathDeath
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
Two Immutable Laws of BusinessTwo Immutable Laws of Business
1.1. A business can be both A business can be both profitable profitable andand bankrupt bankrupt
2.2. Cash Cash is is KING!KING!
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
As a business moves through the As a business moves through the first 4 stages of decline:first 4 stages of decline:
Resources Resources erodeerode Cash Cash tightenstightens Hope Hope fadesfades Options Options disappeardisappear
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
Stage Stage 5 5 –– Capitulation Capitulation toto Irrelevance Irrelevance oror Death Death
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
When youWhen youabandon hopeabandon hope,,begin preparingbegin preparing
for the for the endend
Alternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and Death
FocalPoint 2010 Conference
Well-Founded HopeWell-Founded Hope
From How the Mighty Fall by Jim Collins
STAGE 1Hubris Born of Success
STAGE 2Undisciplined
Pursuit of More
STAGE 3Denial of Risk
and Peril STAGE 4Grasping for
Salvation
STAGE 5Capitulation
to Irrelevance or Death
Recoveryand
Renewal
Recoveryand
Renewal
Alternative to Irrelevance and Alternative to Irrelevance and DeathDeath
Alternative to Irrelevance and Alternative to Irrelevance and DeathDeath
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
Any great company Any great company can can toppletopple
Some Some rise rise againagain
Well-Founded HopeWell-Founded Hope
Alternative to Irrelevance and Alternative to Irrelevance and DeathDeath
Alternative to Irrelevance and Alternative to Irrelevance and DeathDeath
FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins
Success After the FallSuccess After the Fall XeroxXerox NucorNucor IBMIBM
Tex. Instr.Tex. Instr. Pitney Pitney
BowesBowes NordstromNordstrom
DisneyDisney BoeingBoeing MerckMerck
FocalPoint 2010 Conference
““A crisis isA crisis isa terrible thinga terrible thing
to waste!”to waste!”Not by Rahm Emanuel, Not by Rahm Emanuel, Presidential Chief of StaffPresidential Chief of Staff
By Dick Clark, CEO, MerckBy Dick Clark, CEO, Merck