I wanted to share Jim Collins’s summary of his 5 stages of decline. These stages can cause both personal and professional decline and must be recognized before its too late. Unfortunately, to paraphrase Socrates, the examined life is extremely rare and most people do not take the time to study the scoreboard of life. Here is your opportunity to study Collin’s list and see which area you can improve.

LIFE Leadership is about personal and professional development to launch a leadership revolution. Are you ready for the revolution?

Sincerely,

Orrin Woodward

Our research indicates that organizational decline is largely self-inflicted, and recovery largely within our own control. So long as you never fall all the way to Stage 5, you can rebuild.

While a full exploration of the five stages is beyond the scope of this excerpt, here is a brief summary:

STAGE 1: HUBRIS BORN OF SUCCESS
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (“We’re successful because we do these specific things”) replaces penetrating understanding and insight (“We’re successful because we understand why we do these specific things and under what conditions they would no longer work”), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success—and thereby overestimate their own merit and capabilities—have succumbed to hubris.

The best leaders we’ve studied never presume they’ve reached ultimate understanding of all the factors that brought them success. For one thing, they retain a somewhat irrational fear that perhaps their success stems in large part from fortuitous circumstance. Suppose you discount your own success (“We might have been just really lucky/were in the right place at the right time/have been living off momentum/have been operating without serious competition”) and thereby worry incessantly about how to make yourself stronger and better-positioned for the day your good luck runs out. What’s the downside if you’re wrong? Minimal: If you’re wrong, you’ll just be that much stronger by virtue of your disciplined approach. But suppose instead you succumb to hubris and attribute success to your own superior qualities (“We deserve success because we’re so good/so smart/so innovative/so amazing”). What’s the downside if you’re wrong? Significant. You just might find yourself surprised and unprepared when you wake up to discover your vulnerabilities too late.

STAGE 2: UNDISCIPLINED PURSUIT OF MORE
Hubris from Stage 1 (“We’re so great, we can do anything!”) leads right to Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as “success.” Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence—or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.

Discontinuous leaps into areas in which you have no burning passion is undisciplined. Taking action inconsistent with your core values is undisciplined. Investing heavily in new arenas where you cannot attain distinctive capability, better than your competitors, is undisciplined. Launching headlong into activities that do not fit with your economic or resource engine is undisciplined. Addiction to scale is undisciplined. To neglect your core business while you leap after exciting new adventures is undisciplined. To use the organization primarily as a vehicle to increase your own personal success—more wealth, more fame, more power—at the expense of its long-term success is undisciplined. To compromise your values or lose sight of your core purpose in pursuit of growth and expansion is undisciplined.

STAGE 3: DENIAL OF RISK AND PERIL
As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to “explain away” disturbing data or to suggest that the difficulties are “temporary” or “cyclic” or “not that bad,” and “nothing is fundamentally wrong.” In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsize risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.

Bill Gore, founder of W.L. Gore & Associates, articulated a helpful concept for decision-making and risk-taking, what he called the “waterline” principle. Think of being on a ship, and imagine that any decision gone bad will blow a hole in the side of the ship. If you blow a hole above the waterline (where the ship won’t take on water and possibly sink), you can patch the hole, learn from the experience, and sail on. But if you blow a hole below the waterline, you can find yourself facing gushers of water pouring in, pulling you toward the ocean floor. And if it’s a big enough hole, you might go down really fast, just like some of the financial firm catastrophes of 2008. To be clear, great enterprises do make big bets, but they avoid big bets that could blow holes below the waterline.

STAGE 4: GRASPING FOR SALVATION
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common “saviors” include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a “game-changing” acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.

When we find ourselves in trouble, when we find ourselves on the cusp of falling, our survival instinct and our fear can prompt lurching—reactive behavior absolutely contrary to survival. The very moment when we need to take calm, deliberate action, we run the risk of doing the exact opposite and bringing about the very outcomes we most fear. By grasping about in fearful, frantic reaction, late Stage 4 companies accelerate their own demise. Of course, their leaders can later claim: “But look at everything we did. We changed everything. We tried everything we could think of. We fired every shot we had, and we still fell. You can’t blame us for not trying.” They fail to see that leaders atop companies in the late stages of decline need to get back to a calm, clear-headed, and focused approach. If you want to reverse decline, be rigorous about what not to do.

STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company’s leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.

The point of the struggle is not just to survive, but to build an enterprise that makes such a distinctive impact on the world it touches (and does so with such superior performance) that it would leave a gaping hole—a hole that could not be easily filled by any other institution—if it ceased to exist. To accomplish this requires leaders who retain faith that they can find a way to prevail in pursuit of a cause larger than mere survival (and larger than themselves) while also maintaining the stoic will needed to take whatever actions must be taken, however excruciating, for the sake of that cause.

It was a warm summer day in 1992 and I was shooting baskets in Columbiaville, Michigan. While practicing three pointers, I noticed three middle-school age boys start practicing on the other side of the court. After a few minutes, I assessed the boys playing capabilities – two of the boys could play fairly well for middle-schoolers, but the third one looked like he hadn’t played basketball at all. Nonetheless, rather than continue to shoot by myself, I invited them to play a fun game of 2-on-2.

I chose the inexperienced basketball player as my teammate and called “Ice Adidas” since he was wearing an Adidas hat and one of my favorite players back in the day was George “Ice Man” Gervin. Remember, this was 1992, before I was into leadership development at all. I didn’t listen to positive CDs, didn’t read leadership books, and had no idea what a limiting belief was. Nevertheless, I was about to learn a great lesson on leadership that I want to share.

Because it wasn’t a competitive game, I decided not to shoot unless I was given a layup. Thus, “Ice Adidas” had to carry the main load for scoring our points if we planned on winning. Of course, I had watched “Ice Adidas” practice and I don’t think he was making more than one out of ten. I realized this might not be much of a game, but decided to roll with it and, to entertain myself, I decided to do a play-by-play of the game. The two competent players quickly jumped out to the lead and with me refusing to shoot, it looked like it was going to be a blowout.

Although at first the other two boys laughed at my incessant build up of their friend, “Ice Adidas,” I kept speaking it into existence.  Empowering words like – the player who is smooth as silk; the one who has ice in his veins; and the star who can carry his team – were spoken over and over as I drove to the basket and popped it back out to Ice. He was getting closer to the basket but he was still missing.

Then everything changed. “Ice Adidas” made on of his shots! I poured it on just like the TV broadcasters did stating, “Ice Man” is hot! Watch out! When he gets in a groove he is unstoppable! “Ice Adidas” is on the loose and now the game is now up for grabs. We were playing buckets, which meant if you make a basket, then you get the ball back again. This permits a team that gets behind to come back quickly if they get on a roll and that is exactly what the “Ice Man” did.

I would drive to the hole and pop it back to “Ice Adidas” and he started hitting EVERYTHING! The smile on his face seemed permanent as he proceeded to live up to everything I was saying. I had no idea the power words had to change lives, but I experienced it first-hand that day. His two friends started bickering about who was supposed to cover Ice and said to each other that you can’t leave him open or he will score.

I am not exaggerating, this same kid could barely hit the backboard, not he was hitting layups, jumpers, and anything else he shot up. To make a long story short we won three straight games and when the boys left, they treated “Ice Adidas” with deference. One of the kids asked him where he learned to shoot like that. I was wondering the same myself, but he had told me he had only played a couple of times. I am convinced “Ice Adidas” left that court a changed person. His friends treated him with deference and were amazed at his shooting prowess.

What happened on the basketball court that day? That’s a good question. Especially when one considers that I had practically forgotten about the whole incident until I started studying leadership. After countless CDs, books, and events, I realized that my words to “Ice Adidas” had helped change his beliefs. Although I had not idea what I was doing, my words of encouragement to the young man transformed him from a inexperienced player and into “Ice Adidas”. My belief in George “Ice Man” Gervin abilities became his belief in his abilities. “Ice Adidas” lived up to the words I spoke and played way above his former capabilities.

In fact, this is one of the leader’s main roles – help people see themselves the way the leader sees them. I invest my time seeing the greatness in my leaders and then sharing that greatness back to them. Over time, they replace their limiting views of themselves with a more accurate assessment of their leadership abilities. When this happens, everything changes just like it did for “Ice Adidas.” Information is important, but not until they have been provided the inspiration. The leader provides the inspiration for the people to seek the right information needed to win.

In sum, treat a person as he is and he will act accordingly, but treat a person as he can be and he will move heaven and earth to act accordingly. This is the power of belief. Have you ever experienced the power of changed beliefs in your life? Please share.

Sincerely,

Orrin Woodward: LIFE Leadership Chairman of the Board

Life is interesting. On one hand people say they want better results in life, but on the other, they seem paralyzed to perform the actions they know need to be done to improve. Why is this? Well, after 21 years of leading communities and studying human behavior, I have concluded that until a person changes his limiting belief, he will not change his inactivity.

I know. I know. You are probably thinking: but Orrin, how do you change beliefs? Great question. In fact, this is the topic of one of this months (August)  LIFE Leadership LLR talks. In effect, one must learn to stand outside yourself and honestly look into why you are not doing what it takes to accomplish what you said you wanted. Psychologist call this cognitive dissonance. And, nearly every time, there is a belief system in conflict with the stated goal. If this isn’t addressed and replaced with a better belief system, nothing of significance will change.

For instance, one of the common limiting beliefs for many people is the thought that they have no control over life’s outcomes. So long as someone believe they have no control over the results in his/her life, why would they even try? While it is true that we do not control or influence everything that happens to us (to name just two – natural disasters or health challenges), most people view every area of life like it is random or a game of chance. In sum, whatever will be will be. 

In contrast, a better view of life would be to see it as an exciting rapid-filled river that has never been traversed before. True, we have no knowledge or control over the river’s direction, drops, and dangers, but, thankfully, we are issued a kayak (vehicle), paddle (tool) and mind (thinking). The mind can learn to use the paddle to steer the kayak through life. In fact, this is the goal of LIFE Leadership – to teach people the proper strategies (wisdom) to navigate the rivers of life by utilizing the paddle in the current to propel us in the direction of our dreams.

If someone believes they have no control over the direction life’s river takes them, they, unfortunately, won’t even attempt to use their paddle. Thus, their limiting belief becomes their reality as the kayak bounces hopelessly off the canyon walls and eventually capsizes in the roughest rapids. Limiting beliefs paralyze a person into inaction. In this example, he/she focuses upon what is not within his/her control rather than upon what is. 

The professional kayakers, however, respond differently. They have learned to navigate the rapids even when they have never been on a particular river before. How you ask? Because they have learned to apply river wisdom to recognize repeatable patterns present within rapids everywhere. In a similar way, wisdom supplies leaders with the ability to recognize repeatable patterns within life and apply the proper principle at the right time to navigate successfully.

Seek wisdom and everything else will be added unto you. What are you waiting for? Aren’t you tired of having life happen to you rather than making life happen? Laurie and I certainly were. We discovered Biblical principles applied to our lives and our business made all the difference. Perhaps its time replace your limiting beliefs with the truth so you can live the life you’ve always wanted.

Below is a short segment of this month’s talk.

Sincerely,

Orrin Woodward