OVERVIEW •
Author and Book Concepts
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Stages 1 - 5
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Critical Review
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Case Studies
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Conclusions and Lessons Learned
AUTHOR AND BOOK’S CONCEPTS
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“Whether you prevail or fail, endure or die, depends more on what you do yourself than on what the world does to you,” – Jim Collins
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Five-stage framework for why companies fall and how they may regain success: • Stage 1: Hubris Born of Success • Stage 2: Undisciplined Pursuit of More • Stage 3: Denial of Risk and Peril • Stage 4: Grasping for Salvation • Stage 5: Capitulation to Irrelevance or Death
STAGE 1: HUBRIS BORN OF SUCCESS •
Excessive pride can bring down those around the leader
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Success focused on luck versus relationships
CONCEPTS: • Level 5 Leadership = Servant Leadership • Authority Compliance: Emphasis on task and job
STAGE 2: UNDISCIPLINED PURSUIT OF MORE •
Unsustainable quest for growth strains teams
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Neglect of the “primary flywheel”
CONCEPTS: • Leader-Member Exchange Theory • Trait Approach
STAGE 3: DENIAL OF RISK AND PERIL •
Ignoring negatives and amplifying the positives
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Delegating blame
CONCEPTS: • Authentic Leadership (Balanced Processing) • Five Major Leadership Traits
STAGE 4: GRASPING FOR SALVATION •
Looking for a “silver bullet”
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Focus on the bigger, better, faster solutions
CONCEPT: • Skills Approach • Path-Goal Theory
STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH • Sink or swim decision for the business • Deciding on the best option for the future CONCEPTS: •
Transactional Leadership
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Transformative Leadership
CRITICAL REVIEW STRENTGHES: • Real case studies and scenarios aided concepts • Academic, yet not pretentious • Key points clearly defined WEAKNESSES: • Collins presents negative aspects of leadership without solutions •
No clear guidance on turning a company around
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No clear definition of Collins’ specific leadership theories or connections to other leadership theories
CASE STUDY: HEALTH AND WELLNESS •
Opened in 1995 and became a very successful weight loss clinic
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Founder sold to Tom McNeely and units grew by an additional 45%
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Now known to be the largest weight loss chain in Canada
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Got a bad reputation on the effective of the project
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Filed for bankruptcy owning $77 million dollars to creditors
WHERE ARE THEY NOW? •
Bay street invest Steve Hudson bought and invested in the company
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Shut down majority of the clinics, and slowly closing them all
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President left to start his own company on Dragons Den, now know to be Massage Addict
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In Stage 5 and Stage 1
CASE STUDY: BE KIND, REWIND •
Thousands of retail locations, millions of customers, massive marketing budgets, efficient operations, dominated the competition and was a ruthless competitor.
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Large part of their earnings were from charging their own customers late fees and other fees related to their business.
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Approached by a company interested in a partnership, disregarded the company and their ideas due to its obscurity.
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Mailed the aforementioned company a kitchen sink after that company initially struggled to compete with them.
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Initially refused to respond to their competitors business model and was unwilling to change their own business model.
WHO? AND WHERE ARE THEY NOW? •
Company "A" is Blockbuster
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Approached by Netflix for a possible merger but disregarded them and refused to respond to them as competitors until it was too late.
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Clearly this example is Stage 1, but Stage 3 is also seen here with the denial of risk from Netflix.
CASE STUDY: A NEW BRAND OF FOOTBALL •
Worldwide Wresting Federation teams up with NBC Universal
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Invest over $100 million to launch a new sport league
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Defined as “smash-mouth football” and a more violent, adult brand
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Secured multi-million dollar sponsors from Spaulding, Champion brands
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First game scores a record viewership of 54 million people
WHO? AND WHERE ARE THEY NOW? •
This was the XFL
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Failed for several reasons: • Not enough fan appeal / viewership • Technical broadcast issues • Poor quality of game • Frequent player injuries • NBC dropped the broadcast after one season
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Moved quickly through each of the Stages before closing in May 2001
CONCLUSIONS AND LESSONS LEARNED •
Bigger is not always better
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Stay true to your “primary flywheel”
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Success or decline is rapid or slow
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Stages are easy to identify
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Businesses can overcome decline
REFERENCES Blockbuster Movies. (n.d.). Retrieved April 02, 2017, from http://www.blockbuster.com/index.html BrightSightGroup. (2009, June 4). Ethical Leadership. Retrieved from: https://www.youtube.com/watch?v=kmA--yq5eq0 Collins, Jim. (2009). How the Mighty Fall and Why Some Companies Never Give In. New York, New York: Harper Collins Publishers, Inc. Dougherty, Tom. "Lessons from the Blockbuster failure". Stealing Share (2013, November 7th) Retrieved from: http://www.stealingshare.com/lessons-from-blockbusters-demise/ Ebersol, C. (2016, December). This was the XFL. Retrieved April 2, 2017, from http://www.espn.com/30for30/film?page=thiswasthexfl Jim Collins.com. (2017). Retrieved March 31, 2017, from www.jimcollins.com Northouse, Peter G. (2016). Leadership: Theory and Practice (7th ed.). Los Angeles, California: Sage Publications. Miller, A. (2015, August 09). Herbal Magic closes stores across the country. Retrieved April 01, 2017, from http://globalnews.ca/news/ 2153754/herbal-magic-closes-stores-across-the-country/ Satell, Greg. "A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To". Forbes.com (2014, September 5th). Retrieved from: https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/2/ #1eb6067ebe4a Netflix Homepage. (n.d.). Retrieved April 02, 2017, from https://www.netflix.com/ Strauss, M. (2014, July 25). Debt-burdened Herbal Magic enters private equity deal. Retrieved April 01, 2017, from http://www.theglobeandmail.com/report-on-business/herbal-magic-deal-poised-to-buy-company/article19786940/ McClellan, S. (2000). XFL Rougher, But A Smash Hit? (cover story). Broadcasting & Cable, 130(32), 24.