In the throes and chaos of an economic meltdown might not be an ideal time to try and get an accurate perspective as to why some companies survive and others collapse. A true perspective evolves and emerges over time, that is unless you bear witness to the implosion and relatively rapid demise of companies like Lehman Brothers, Bear Stearns, and Merrill Lynch.

According to an exceptional new book by Jim Collins, every organization is vulnerable and subject to a decline and potential failure. However, despite the title, How The Mighty Fall, his new read could not be more timely, insightful, and inspiring. It focuses on hope and how by recognizing identifiable “markers”, companies can avoid a decline, and if they find themselves in a tail-spin, how to reverse the direction if they can recognize and effectively react to one or more of 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
• Stage 5: Capitulation to Irrelevance or Death

Although Collins’ book is a reflective look at great companies that have stumbled, nearly failed, failed, or failed and ultimately recovered, there are insightful lessons for any business endeavor, including the hotel industry. The playing field and business scenarios may be familiar and the consequences just as dire, without specific reference to any hotel company.

Yet, as the result of fallout from the current economic Tsunami, it has become almost a daily occurrence that we read of another hotel or organization succumbing to financial pressure through bankruptcy or default. As the performance of the hotel industry continues to decline and operators struggle to stay upright and avoid taking on water by reducing operating expenses, many are having difficulty generating sufficient cash flow to pay debt service. This challenge is only exacerbated by the depreciating value of many hotel properties. One or more of the five stages of decline may sound all too familiar to those hoteliers experiencing the above. However, a little hope, business insight, and sage advice can go a long way during these challenging times; and that’s what Jim Collins new book delivers.

So what is the takeaway that might apply to what we do every day? Here are few:

• The Right People. Collins stresses that the major difference from having the right people (in key positions) and the wrong people is, the former see themselves as having jobs, while the latter see themselves as having responsibilities. By creating a “culture of discipline”, every person in a key seat should respond to the question “What do you do?” not with a job title, but with a statement of personal responsibility. (Pages 57-58)
  
  
• Neglecting Your Strength. According to Collins, great companies are built on a “sustained, cumulative effort” over period of time. He calls this the “flywheel” of your business and warns as to the danger of neglecting or abandoning your core business, and redirecting resources to new ventures than can put a drain on creative energy. Greatness can breed arrogance which can lead to undisciplined growth, which according to Collins, contributed to the demise of Circuit City. (Pages 31-32)
  
  
• Learning Leaders. Here he offers a warning to leaders who tend to “tell”, rather than practice inquisitive listening and learning. He notes “…the best corporate leaders we’ve researched remain students of their work, relentlessly asking questions----why, why, why?” The “knowing people” understand that success can be fleeting and not an “entitlement”. The Learners are savvy enough not to read their own mail during the good times. (Page 39)
  
  
• Humility in Leadership. Although Collins is somewhat skeptical of the single dynamic leader, as he feels the best leaders he has researched have “a peculiar genius for seeing themselves as not all that important.” These leaders build executive teams that create a culture and values that are larger and more important than one “heroic” leader. Collins contends that “no leader can single-handedly build an enduring great company.” Furthermore he cautions that the wrong leader “can almost single handedly bring a company down”. (Page 62)
  
  
• No Silver Bullets. In stages of desperation, “grasping can produce brief improvement, but the results do not last.” Collins stresses, “Companies stuck in Stage 4 try all sorts of new programs, new fads, new strategies, new values, new breakthroughs, new acquisitions, and new saviors.” Collins notes that “mediocrity” does not necessarily develop from reluctance to change, but rather from “chronic inconsistency.” (Pages 91-92)
  
  
• Riding the Storm. Collins contends that companies that have been consistently practicing “the principles of greatness” over long periods, not only have a better chance of surviving “violent change”, they actually may have a better chance of gaining ground. ..”You should get down on your knees and pray for severe turbulence, for that’s when you can pull even further ahead of those who lack your relentless intensity.” (Page 119)

The heart of the book is ironically in the sub-heading- And Why Some Companies Never Give In. For Collins, the difference between the really great companies and those that may be good and successful is that great companies can fall and get back up. And as Collins notes, “great individuals can fall and recover” as well. To Collins, business is about endurance, persistence, and an unrelenting commitment to values and aspirations. This reader is not suggesting that this book has the answer for surviving these turbulent times, but it does offer some good lessons, guidance, and caveats for anyone in business, including the struggling hotel industry. Whether you are a Property Owner, General Manager, Senior Executive or the CEO of a hotel related company, this book offers insight for identifying trends and mistakes that may lead to losing ground, proven realignment that can help lead to recovery, and examples of how to ultimately succeed, even if you fall down along the way.

Collins, Jim. How The Mighty Fall and Why Some Companies Never Give In. New York: Harper Collins, 2009.