The Plumber Next Door: Lessons from Jim Collins' How the Mighty Fall

There are only a handful of books that I read regularly. I read Essentialism by Greg McKeown every year during the holidays to eliminate the stuff I shouldn’t be doing that I accumulated throughout the year. The second book I read every quarter. That’s How the Mighty Fall by Jim Collins.

To give you some background, I’ve led high-growth companies since 2007. Five of those companies made the Inc. 500 | 5000 list, a few simultaneously. Those companies have made the list thirteen times in total. Those businesses' average annual growth rate is over 40% per year.

I don’t say that out of arrogance or ego. I say it with humble confidence. There have been countless mistakes on that journey and numerous lessons; documenting them all would be as lengthy as War and Peace. I’m sure I’ll make a million more mistakes, and if I’m lucky, I’ll continue to learn from those, too.

Speaking of luck. I’ve been fortunate. I’ve had great teams and business partners along the way, riding the wave of industry booms, and have often been in the right place at the right time.

I’ve been a growth-oriented entrepreneur since the beginning. It’s just part of being a driven person. However, there is a downside to all this growth. It puts you at risk of failing. The higher you climb, the farther you fall. That’s why I read How the Mighty Fall regularly.

A quick word on risk: Successful entrepreneurs are some of the most risk-averse people around. They push through fear and take action, but we always mitigate risks.

As the great investor Warren Buffett says, “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”

I don’t want you to think we walk around completely fearing failure and never take action. We do. But I always have the Stage of Decline in my mind. See Rule No. 1.

I’ve recorded videos on the stages of decline, but I highly recommend reading the book first. I’ve also created an assessment you can use to identify areas where you may be at risk of decline. You can take that assessment here.

 The Five Stages of Decline

Stage 1: Hubris Born of Success

Stage 2: Undisciplined Pursuit of More

Stage 3: Denial of Risk and Peril

Stage 4: Grasping for Salvation and Stage 5: Capitulation and Death

I encourage you to thoughtfully consider if you are showing signs of Stages 1 through 4. If you are, get with your leadership team and take the reverse course.

To be honest, we are doing some things at EOS Worldwide that show signs of decline. Specifically, State 2, the Undisciplined Pursuit of More. We are in the process of deciding what we are going to stop doing.

If you are running on The Entrepreneurial Operating System® (EOS®), you will avoid most of these stages. But you still need to remain vigilant and focused. Your Vision/Traction Organizer® (V/TO) will help you do that.

The Accountability Chart® and The People Analyzer® will help you ensure that 80% of the Right People are in the Right Seats.

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The views and opinions expressed in this post are solely my own and do not reflect the official policy or position of EOS Worldwide.