The Five Stages to Failure

Sam Rainer

July 21, 2009

The Economist recently summarized management guru Jim Collins’ new book, How the Mighty Fail. In this research Collins examines some of the “great” companies highlighted in his previous works, Built to Last and Good to Great, that have since severely declined or failed entirely. Collins identifies five major stages in the process of decline.

Stage 1: Hubris born of success. Firms take on a sense of superiority and fail to question their relevance when conditions change.

Stage 2: Undisciplined pursuit of more. Firms overreach – they venture into areas where their original qualities of success do not apply.

Stage 3: Denial of risk and peril. Though signs of failure appear, previous success is enough to carry the firm. Leaders convince themselves that all is well. Problems are blamed on external factors.

Stage 4: Grasping for salvation. Problems can no longer be ignored. Instead of returning to the principles that got them to previous success, leaders take extreme risks and drastically change strategy.

Stage 5: Capitulation to irrelevance or death. The firm dies or is forgotten.

Church leaders must be careful in applying business research to their congregations, but I believe that leaders can glean some truth from these stages. I can see how any leader within a business, organization, or church can lead a group down this failure spiral. What are your thoughts? What are some other mistakes leaders make to take a church from good to great to gone?

5 comments on “The Five Stages to Failure”

  1. Enjoyed your summary of a great book.

  2. Scott Meyer says:

    I really appreciate Jim Collins book and your summary of it here.

    What I found helpful from Collins five stages is the associated behaviors that he outlines with each stage. The two behaviors that I have seen most demonstrated in churches were 1) the attempt to continually “reorganize”. In churches this typically becomes nothing more than a distracting exercise on paper. 2)The other behavior is to hire the “come-save-us-messiah-senior-pastor” while overlooking capable people already serving in the church.

    Grace & Peace

  3. Sam Rainer says:

    Scott –

    Good additions. The continual “reorg” is something that can be demoralizing for staff. And it can confuse the congregation. Thanks!

  4. Randy Wood says:

    This is so true. As a former pastor I fell prey to the first 4. Toward the end of my 10TH year I tried to “Reorg”. I saw the writing on the wall. I resigned a few weeks ago. I thank God that sinse I have left the Church has taken some ownership of a vison again. I believe that they are healthy and ready for the right pastor to come in and help equip them forward. I also thank God for His grace toward me in all of the stupid decisions I made while there. 🙂

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