I’ve had a front-row seat to success stories, and to the unravelling of once-great companies. Over the years, I’ve come to realize that decline rarely begins with a catastrophic event. It’s usually quieter. Subtle. It starts when confidence turns to complacency, and when ambition slips into arrogance.
Jim Collins’ How the Mighty Fall resonated with me not just as a framework, but as a mirror. It articulates a truth many of us in leadership have sensed: that greatness is not a permanent state, and the seeds of failure are often sown in the soil of success.
1. Success Can Make You Blind
Collins outlines five stages of decline, each chillingly familiar.
The first stage, Hubris Born of Success, is something I’ve witnessed up close. A company riding high on success begins to believe it has the Midas touch. Strategy turns into dogma, and leaders become more interested in defending the past than building the future.
Years ago, I when I was working for a company that had dominated its market for decades. But when new entrants emerged with leaner models and digital agility, the board brushed them off as “irrelevant startups”. I remember the CEO saying, “They’ll grow up and realize this business is harder than it looks”. They never did. The startups just kept eating market share, and we kept losing ground. The irony is that success should make us paranoid in a healthy way. But instead, it often breeds entitlement.
2. Chasing Growth for the Wrong Reasons
Collins’ second stage, Undisciplined Pursuit of More, is another trap. Growth for its own sake becomes a badge of honour. I’ve seen companies expand into unfamiliar markets, acquire unrelated businesses, or launch products with no clear connection to their core. When asked “why”, the answer is often some version of, “because we can”.
But just because we can doesn’t mean we should.
Focus and restraint aren’t flashy, but they’re powerful. Companies that endure often grow slower, but smarter.
3. Ignoring the Writing on the Wall
The third stage, Denial of Risk and Peril, is perhaps the most dangerous. It’s when internal metrics are rationalized, negative signals are dismissed as noise, and bad news is buried under bravado.
I once worked with a CFO who flagged early signs of trouble in a core business line. His concerns were met with, “That’s just a seasonal dip” and, “The fundamentals are still strong”. By the time the board took it seriously, we were in full-blown crisis mode.
What’s tragic is that decline is often reversible. if caught early. But denial delays action. And in business, time lost is opportunity lost.
4. Looking for a Silver Bullet
Collins’ fourth stage, Grasping for Salvation, is the desperate flailing that follows. Companies look outside for saviours: a high-profile CEO, a big acquisition, a bold new strategy. Sometimes it works. Often it doesn’t.
There’s a tendency to chase “the next big thing” rather than fixing what’s broken. But as Collins notes, dramatic moves rarely work if they’re not grounded in discipline. Reinvention is hard, but it must come from a place of clarity, not panic.
I’ve seen boards hire turnaround experts expecting instant results, only to realize that the real issues were cultural, systemic, and slow-moving.
5. When the Fight Leaves the Company
The final stage, Capitulation to Irrelevance or Death, is sobering. It’s when the spirit of the organization erodes. People stop fighting for the brand. Energy gives way to resignation.
This is the moment when, frankly, the company has lost its will to live.
And yet, Collins reminds us: decline is largely self-inflicted. That’s both terrifying and liberating. Because if we caused it, we can, at least sometimes, correct it.
Lessons That Still Resonate
What stays with me most about How the Mighty Fall is its underlying message: the decline of a company is not inevitable, but it is predictable. And more importantly, it’s preventable.
Three takeaways I often share with boards and leadership teams:
- Stay humble in success. Celebrate wins, but don’t believe your own hype. Success is a trailing indicator, it reflects past choices, not future certainty.
- Stay focused. Growth should be a means to an end, not an end in itself. Know what you stand for, and what you don’t.
- Listen to discomfort. If something feels off, it probably is. Empower dissent. Elevate truth-tellers. And don’t punish the bearer of bad news.
A Final Reflection
Collins’ book isn’t just a study of companies; it’s a study of leadership psychology. When leaders become untouchable, when organizations stop asking hard questions, and when success becomes a shield against scrutiny, the fall has already begun.
So here’s the question I leave you with: What silent signals might your organization be ignoring today?
It’s a question worth asking, not once, but regularly. Because no company is too big, too beloved, or too successful to fall. But the wise ones catch themselves before the stumble becomes a collapse.