Cam fraser bus_life_cycle_p_pt._slidewhow

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Knowing what part of the Business Life Cycle you are in is a prerequisite to choosing effective strategies.

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Cam fraser bus_life_cycle_p_pt._slidewhow

  1. 1. The BusinessThe Business Life CycleLife Cycle The BusinessThe Business Life CycleLife Cycle FocalPoint 2010 Conference
  2. 2. EverythingEverything moves inmoves in predictable cyclespredictable cycles Life CyclesLife CyclesLife CyclesLife Cycles FocalPoint 2010 Conference
  3. 3. Knowing what part of theKnowing what part of the cycle you are in is acycle you are in is a prerequisite to choosingprerequisite to choosing effective strategieseffective strategies Life CyclesLife CyclesLife CyclesLife Cycles FocalPoint 2010 Conference
  4. 4. LEARNINGLEARNING PHASEPHASE Business Life CycleBusiness Life CycleBusiness Life CycleBusiness Life Cycle FocalPoint 2010 Conference GROWTHGROWTH PHASEPHASE DECLINEDECLINE PHASEPHASE XX Founder’s Trap
  5. 5. Every institutionEvery institution isis vulnerablevulnerable no matter how great.no matter how great. –– Jim CollinsJim Collins FocalPoint 2010 Conference
  6. 6. There is noThere is no law oflaw of naturenature that the mostthat the most powerful will inevitablypowerful will inevitably remain at the top.remain at the top. –– Jim CollinsJim Collins FocalPoint 2010 Conference
  7. 7. AnyAny businessbusiness can fail.can fail. Most do!Most do! FocalPoint 2010 Conference
  8. 8. FocalPoint 2010 Conference Bank of AmericaBank of America The World’s Largest Bank, Admired for its Management Yet on the Cusp of Catastrophic Decline From How the Mighty Fall by Jim Collins 600 400 200 0 -200 -400 -800 1972 1976 1980 1984 1987 Net Income 1972-1987 (in $ Millions)Net Income 1972-1987 (in $ Millions)
  9. 9. STAGE 1 Hubris Born of Success Five StagesFive Stages of Declineof DeclineFive StagesFive Stages of Declineof Decline FocalPoint 2010 Conference 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 From How the Mighty Fall by Jim Collins
  10. 10. StageStage 11StageStage 11 FocalPoint 2010 Conference HubrisHubris Born ofBorn of SuccessSuccess From How the Mighty Fall by Jim Collins 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
  11. 11. StageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccessStageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccess FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 1.1. Success Entitlement,Success Entitlement, ArroganceArrogance 2.2. Neglect ofNeglect of CoreCore BusinessBusiness 3.3. “What”“What” replacesreplaces “Why“Why”” Diagnostic ChecklistDiagnostic Checklist
  12. 12. StageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccessStageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccess FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins Diagnostic ChecklistDiagnostic Checklist 4.4. Decline inDecline in LearningLearning OrientationOrientation 5.5. Discounting the RoleDiscounting the Role ofof LuckLuck
  13. 13. StageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccessStageStage 11 –– HubrisHubris Born ofBorn of SuccessSuccess FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins Diagnostic ChecklistDiagnostic Checklist 4.4. Decline inDecline in LearningLearning OrientationOrientation 5.5. Discounting the RoleDiscounting the Role ofof LuckLuck
  14. 14. StageStage 22StageStage 22 FocalPoint 2010 Conference UndisciplinedUndisciplined Pursuit ofPursuit of MoreMore From How the Mighty Fall by Jim Collins 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
  15. 15. StageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMoreStageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMore FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 1.1. ConfusingConfusing “Big”“Big” withwith “Great”“Great” 2.2. UndisciplinedUndisciplined Discontinuous LeapsDiscontinuous Leaps Diagnostic ChecklistDiagnostic Checklist
  16. 16. StageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMoreStageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMore FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 3.3. Declining proportion ofDeclining proportion of right peopleright people inin key seatskey seats 4.4. Easy cashEasy cash erodes costerodes cost disciplinediscipline Diagnostic ChecklistDiagnostic Checklist
  17. 17. StageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMoreStageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMore FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 5.5. BureaucracyBureaucracy subvertssubverts disciplinediscipline 6.6. ProblematicProblematic successionsuccession of powerof power Diagnostic ChecklistDiagnostic Checklist
  18. 18. StageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMoreStageStage 22 –– UndisciplinedUndisciplined Pursuit ofPursuit of MoreMore FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 7.7. Personal interestsPersonal interests placedplaced above organizationalabove organizational interestsinterests Diagnostic ChecklistDiagnostic Checklist
  19. 19. StageStage 33StageStage 33 FocalPoint 2010 Conference DenialDenial ofof RiskRisk andand PerilPeril From How the Mighty Fall by Jim Collins 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
  20. 20. StageStage 33 –– DenialDenial ofof RiskRisk && PerilPerilStageStage 33 –– DenialDenial ofof RiskRisk && PerilPeril FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 1.1. Amplify theAmplify the positivepositive,, discount the negativediscount the negative 2.2. Big bets and bold goalsBig bets and bold goals withoutwithout empiricalempirical validationvalidation Diagnostic ChecklistDiagnostic Checklist
  21. 21. StageStage 33 –– DenialDenial ofof RiskRisk && PerilPerilStageStage 33 –– DenialDenial ofof RiskRisk && PerilPeril FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 3.3. Incurring huge downside riskIncurring huge downside risk based onbased on ambiguous dataambiguous data 4.4. Erosion of healthyErosion of healthy teamteam dynamicsdynamics Diagnostic ChecklistDiagnostic Checklist
  22. 22. StageStage 33 –– DenialDenial ofof RiskRisk && PerilPerilStageStage 33 –– DenialDenial ofof RiskRisk && PerilPeril FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 5.5. Externalizing blameExternalizing blame 6.6. ObsessiveObsessive reorganizationsreorganizations 7.7. ImperiousImperious detachmentdetachment Diagnostic ChecklistDiagnostic Checklist
  23. 23. StageStage 44StageStage 44 FocalPoint 2010 Conference GraspingGrasping forfor SalvationSalvation From How the Mighty Fall by Jim Collins 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
  24. 24. StageStage 44 –– GraspingGrasping forfor SalvationSalvationStageStage 44 –– GraspingGrasping forfor SalvationSalvation FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 1.1. A series ofA series of silver bulletssilver bullets 2.2. Grasping for aGrasping for a leader-leader- as-savioras-savior 3.3. PanicPanic andand hastehaste Diagnostic ChecklistDiagnostic Checklist
  25. 25. StageStage 44 –– GraspingGrasping forfor SalvationSalvationStageStage 44 –– GraspingGrasping forfor SalvationSalvation FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 4.4. Radical change andRadical change and “revolution”“revolution” with fan farewith fan fare 5.5. HypeHype precedes resultsprecedes results 6.6. Initial upswing followed byInitial upswing followed by disappointmentsdisappointments Diagnostic ChecklistDiagnostic Checklist
  26. 26. StageStage 44 –– GraspingGrasping forfor SalvationSalvationStageStage 44 –– GraspingGrasping forfor SalvationSalvation FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins 7.7. ConfusionConfusion andand cynicismcynicism 8.8. Chronic restructuringChronic restructuring andand erosionerosion ofof financialfinancial strengthstrength Diagnostic ChecklistDiagnostic Checklist
  27. 27. StageStage 55StageStage 55 FocalPoint 2010 Conference CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath From How the Mighty Fall by Jim Collins 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
  28. 28. StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins Two Immutable Laws of BusinessTwo Immutable Laws of Business 1.1. A business can be bothA business can be both profitableprofitable andand bankruptbankrupt 2.2. CashCash isis KING!KING!
  29. 29. StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins As a business moves through theAs a business moves through the first 4 stages of decline:first 4 stages of decline:  ResourcesResources erodeerode  CashCash tightenstightens  HopeHope fadesfades  OptionsOptions disappeardisappear
  30. 30. StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath StageStage 55 –– CapitulationCapitulation toto IrrelevanceIrrelevance oror DeathDeath FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins When youWhen you abandon hopeabandon hope,, begin preparingbegin preparing for thefor the endend
  31. 31. Alternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and Death FocalPoint 2010 Conference Well-Founded HopeWell-Founded Hope From How the Mighty Fall by Jim Collins 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 Recovery and Renewal
  32. 32. Alternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and Death FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins  Any great companyAny great company cancan toppletopple  SomeSome riserise againagain Well-Founded HopeWell-Founded Hope
  33. 33. Alternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and DeathAlternative to Irrelevance and Death FocalPoint 2010 Conference From How the Mighty Fall by Jim Collins Success After the FallSuccess After the Fall  XeroxXerox  NucorNucor  IBMIBM  Tex. Instr.Tex. Instr.  PitneyPitney BowesBowes  NordstromNordstrom  DisneyDisney  BoeingBoeing  MerckMerck
  34. 34. FocalPoint 2010 Conference ““A crisis isA crisis is a terrible thinga terrible thing to waste!”to waste!” Not by Rahm Emanuel,Not by Rahm Emanuel, Presidential Chief of StaffPresidential Chief of Staff By Dick Clark, CEO, MerckBy Dick Clark, CEO, Merck

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