I'm currently in the thrall of business writer Jim Collins. I've been reading "How the Mighty Fall", his analysis of how once-powerful companies – like Zenith – have collapsed while others – like IBM – have recovered from near death. I have also been checking out his various articles on line, some related to How The Mighty Fall and his other books such as Good to Great.
Collins traces the path of collapse through five stages. They are:
1. Hubris Born of Success
2. Undisciplined Pursuit of More
3. Denial of Risk and Peril
4. Grasping for Salvation
5. Capitulation to Irrelevance or Death
Instead of Capitulation, some companies manage to recover from stage four instead and enter a period of Recovery and Renewal.
I've found that many of the lessons discussed in the book are applicable to Canada's Liberal Party. There are also interesting parallels to the rise and fall of sports teams, like the Toronto Blue Jays.
In this post, I will primarily discuss Stage Four which currently describes the state of the Liberal party. In future posts, I'll try to map out the analogy more completely.
Stage Four – Grasping for Salvation: In Business
In Stage Four, proud organizations that have fallen on hard times search frantically for a 'silver bullet' that will bring back the glory days.
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
Some of these moves may succeed in the short term but do not address fundamental weaknesses in the organization. Ultimately they lead to a Doom Loop; "Disappointing results lead to reaction without understanding, which leads to a new direction—a new leader, a new program—which leads to no momentum, which leads to disappointing results." Another word for this is panic. It leads the organization inexorably towards stage five.
Grasping for Salvation: The Blue Jays and the Liberals
When their talent pool runs dry, sports teams often use similar strategies, blowing their money on free agents and madly hiring and firing managers and coaches instead of rebuilding their core from within. Think of the Toronto Blue Jays, who, in different eras, added big names like Roger Clemens and Frank Thomas without ever sniffing the playoffs. Clemens' two Cy Young awards with the team would've been enough to lift previous Jays squads over the hump, but in the late 90′s couldn't budge them above third place.
For the Liberal party, the mid-2000s is reminiscent of the mid-1990s Toronto Blue Jays. Many building blocks from the era of success left the team – Roberto Alomar, Paul Molitor and Devon White for the Blue Jays, Alan Rock, John Manley and Brian Tobin for the Liberals. Others who stayed were unable to take the step up from solid supporting player to star: Ed Sprague is to Blue Jays as Stephane Dion is to Liberals.
Instead the party turned to party outsiders who felt like high-profile free agent signings; Bob Rae, Ujjal Dosanj, Ken Dryden, and the supposed second coming of Pierre Trudeau, Michael Ignatieff. Some of these have turned out better than others, and I do not fault any one of them individually. I have no doubt that had Mr. Ignatieff or any of the others been elected in 1993 or 1997, they would have been long serving and productive cabinet ministers as part of a strong and deep team. By 2004, however, that team was hollowed out, and in the years since then, it seems to have become even more so (to be fair, I am not privy to the internal workings of the Liberal party, so I may be making some unfair assumptions).
Approaching the Liberals' current situation from this lens, the current talk about a merger with the NDP, or the quick elevation of a young buck like Justin Trudeau to the leadership, would just be another grasp for salvation and another step down towards irrelevance and death. Instead, the party needs a slow, methodical process towards recovery and renewal.
Recovery and Renewal
In contrast to the Doom Loop of an organization in decline, those on the rise experience the Flywheel Effect. This situation is analogous to pushing a giant wheel on an axle. At first it takes tremendous effort to get it moving, but by continuously pushing that wheel, it starts to turn faster and faster until it pushes fast enough that it is propelled by its own weight and, "You aren't pushing any harder, but the flywheel is accelerating, its momentum building, its speed increasing."
To get to this stage however, requires a process of renewal. In his discussions of recovery and renewal, Collins contrasts the paths taken by IBM under Lou Gerstner beginning in 1993, with HP under Carly Fiorina, beginning in 1999. Fiorina's term began with a bang and ended with a whimper. Under a media spotlight, she pledged to remake the organization and took dramatic moves, including the acquisition of rival Compaq. By 2005, she was forced out.
By contrast, when Gerstner took over IBM in 1993, he told the media they would be "going dark" for a while hey methodically examined the organization's strengths, weaknesses and core competencies before embarking on a slow path to recovery. IBM regained its status as one of the world's great companies.
One clear message that I get from Collins' writing is that in the initial stage of renewal, the organization should not focus on the "what", questions such as what product the company should build, or policy the party should embrace. Instead the organization should get a clear eyed understanding of its own strengths, weaknesses and place in the world. Then it must put the right people in the right positions to succeed.
"Most people assume that great bus drivers (read: business leaders) immediately start the journey by announcing to the people on the bus where they're going—by setting a new direction or by articulating a fresh corporate vision.
In fact, leaders of companies that go from good to great start not with "where" but with "who." They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances."
As the third party in parliament, the Liberals are in the fortunate position of not having to worry about the what right now. They need not select their leader right away, or adopt a policy platform, or election strategy. First they must understand who they are, and the challenges they face. More about this in future posts. Digg
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