If a company as powerful and well-positioned as Bank of America in the late 1970s could fall so far, so hard, so quickly, then any company can. If companies such as Motorola (MOT), Circuit City (CCTYQ), and Fannie Mae (FNM)””icons that once served as paragons of excellence””can succumb to the forces of gravity, then no one is immune. If companies such as Zenith and A&P, once the unquestioned champions in their fields, can plummet from great to irrelevant, then we should be wary about our own success.
Every institution is vulnerable, no matter how great. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall, and most eventually do.
But all is not gloom. By understanding the five stages of decline we uncovered in our research for How the Mighty Fall, leaders can substantially increase the odds of reversing decline before it is too late””or even better, stave off decline in the first place. Decline can be avoided. The seeds of decline can be detected early. And decline can be reversed (as we’ve seen with notable cases such as IBM (IBM), Hewlett-Packard (HPQ), Merck (MRK), and Nucor (NUE)). The mighty can fall, but they can often rise again.