Jim Collin's most recent book "How the mighty fall" reads like a playbook of Bermuda's past, present and future. It's a scarily accurate account of where we are now and where we may well be headed based upon this highly respected author's well researched investigation of the stages great organizations progress through as the go from success to failure. Should we be heeding his warnings or ignoring them at our own peril?
Businessweek gives a good summary of How the mighty fall including the core "5 stages of decline":
STAGE 1: HUBRIS BORN OF SUCCESS
Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.
Only a few years ago people were talking like Bermudians could do anything. If international business left we wouldn't need to worry because we're innovative and destined for success and would create replacement industries with ease. We've always succeeded regardless of the struggle and we will again because we're a brilliant and resilient people. While Bermudians are resilient and brilliant, did we become too entitled in thinking that we could do anything, including pushing international business around, blaming them for our problems and putting onerous requirements upon them to the point that we're seeing jobs leave?
STAGE 2: UNDISCIPLINED PURSUIT OF MORE
Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as "success."
We've witnessed incredible growth. More international business, more companies, more people, more revenues, more, more, more. The problem is that we were so focused on our success we lost track of the implications of growth. Where do we house these people? How can our infrastructure handle it? Can our people handle it? Can we ensure we're providing great service to our customers? What happens to construction when all the office buildings come online and demand plummets? We were too busy with the boom to realize we could be overheating towards bust.
STAGE 3: DENIAL OF RISK AND PERIL
In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility.
Sound familiar? Of late we're seeing more and more negative data being spun like it's no big deal. For the longest time we heard there was no recession, then we heard that Bermuda wouldn't be impacted. What are we hearing now? The data is never really that bad is it? Our budget is just fine. Job numbers have taken a slight decline, nothing to worry about. Tourism is on the cusp of reaching that perennial 'platinum period' and international business has nothing bad to say in person, just ignore what they're saying behind the scenes. The hard numbers tell a different story, but who pays attention to those?
STAGE 4: GRASPING FOR SALVATION
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions.'
Trips to India? A massive new pier? Renovate Port Royal? Music Festival? Love Festival? New Hotels? Gambling? The list goes on. We've pursued a great many radical "game-changing" solutions at the hand of our charismatic visionary leader but how many have produced fruit? How much have we spent vs. seen in visible returns? Are we really saving ourselves or are we grasping for anything we can hold onto? Are we throwing our money away on ventures that seem really great on the surface but in reality don't keep us afloat?
STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spira
l downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company's leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.
Our decline is intensifying as we're showing signs of being in stage 4 and prolonging it. We're grasping for more and more silver bullets as we try to find the next big idea that will fix everything. We're seeing how our small setbacks, expensive false starts and heavily overspent projects truly are eroding our financial strength. Our great charismatic and visionary leader has announced many things and yet we still aren't seeing traction from most anything that yields real income vs. money spent. We're drowning ourselves in debt and are not showing signs that we're taking the steps to save ourselves from destruction. Will we continue to ignore the signs and fail to make the right moves until the eventual moment where Bermuda as it once was, never is again?