Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them

Book Description

Will Your Organization Still Be Here in Ten Years?

It's a familiar story: A company rises to become an industry leader. Competitors try to emulate it. Analysts rave about it. The CEO's picture is splashed across magazine covers. Then the company stumbles, profits erode, and the stock plummets. How does this happen? Why do good companies so often go bad? More important, what can you do to prevent it from happening to your company?

In Revival of the Fittest, Donald N. Sull takes a provocative look at corporate failure and proposes a practical new model for effecting change that can vastly increase your organization's lifespan. Ironically, argues Sull, leaders sow the seeds of failure during a company's most successful times, when they make a set of commitments-whether to a core strategy, a key customer, or an innovative manufacturing method-that constitute the company's success formula. Managers become so married to the formula that they can't divorce themselves from it when the competitive situation changes. They respond to the future by doing more of what worked in the past-a phenomenon Sull calls "active inertia."

Based on extensive global research into successful and failed transformations across many industries, Revival of the Fittest introduces a three-step model for making transforming commitments-actions that prevent managers from reinforcing old behaviors in the face of change. Sull identifies five areas in which transforming commitments can be anchored-strategic frames, processes, relationships, resources, and values-and provides diagnostic tests, hands-on tools, and real company examples to show how managers can:

Gauge their company's susceptibility to active inertia

Determine which commitment is right for a specific situation

Appoint the best person to lead the charge

Ensure that the new commitment sticks

Avoid common mistakes that can sabotage the transformation effort

Weigh the personal risks associated with leading corporate change

In an unpredictable marketplace, commitments can make and break a company. But Sull shows that corporate demise is not inevitable. Through transforming commitments, revival of the fittest is possible-and managers can make the difference.

Donald N. Sull is Assistant Professor of Business Administration in the Entrepreneurial Management area at Harvard Business School.

Customer Reviews:

the leadership commitment dilemma.......2005-07-03

Donald Sull is Associate Professor of Management at London Business School.

Leadership is about making commitments and seeing them through.

There are two dangers with commitment making. The first danger is that the commitments fail. Sull argues that the second danger is that the commitment succeeds. A series of successful commitments can be bundled up in what Sull calls a company's success formula. In an every changing world, leaders must guard against being prisoners of their own success formulas.

The most interesting part of this book is his creative pairing of similar companies in similar industries who took different paths of either honoring or destroying their success formulas. The stories of Firestone versus Goodyear in the tire industry have extraordinary value for us today and are well worth reading.

What does this mean for those who serve on Boards of Directors?

BOARDS WANT TO HIRE CHAMPIONS

Boards want to hire champions. Champions are bred to be decisive and self-confident. They love making commitments and seeing them through.

As Donald Sull argues, when champions make commitments you have a double edge problem. It is predictable that champions will have difficulty admitting that their commitments no longer fit the times. Indeed this trait is so predictable I called it the LBJ Effect in honor of the American President who escalated commitment to a failing war once it became clear that the war could not be won.

LESSONS FOR REVIVAL OF THE FITTEST FOR BOARDS OF DIRECTORS.

1. Good CEOs are champions. Champions believe in themselves and their commitments.

2. In the absence of a strong countervailing force, some CEO Champions will rigidly hold on to what Sull calls the success formula when it ought to be thrown away. We even take the more extreme position that in the absence of a strong countervailing force, champions will pour more resources into an inappropriate success formula.

3. This strong countervailing force is called the Board of Directors.

SETTING THE RIGHT CULTURAL TONE

At a cultural level, the LBJ Effect can be fought by the board insisting on a culture where it is acceptable to fail, to learn from mistakes, and to try again. It is a culture where "mid course correction" is not necessarily a sin and "stick-to-itness" is not necessarily a virtue.

Perhaps the most famous example of a corporate culture that supports this notion is Johnson & Johnson. On the desks of most executives within the J&J organization is a framed one-page document called, "Our Credo."

The J&J Credo is a series of principles that govern management decisions:

When there was a concern that a batch of Tylenol had been poisoned, a division manager unilaterally ordered all bottles of Tylenol off the U.S. market. That action was taken without consulting corporate headquarters. It was justified to management on the basis of the credo. Senior management at J&J backed the local manager and the employees were enormously proud of it.

This use of a corporate values statement is not unique at J&J. We have consulted at other companies with credos. And some of these companies had problems as severe as the Tylenol crisis. But in no other company would a middle level manager make a major decision based on an esoteric company principle. With respect to failure, the J&J Credo states:

"Employees must feel free to make suggestions and complaints....We must experiment with new ideas. Research must be carried on, innovative programs developed, and mistakes paid for."

In other words, failure is not "bad." It is part of the necessary price for being innovative.

Board Influencing Tactics

Boards seeking to influence CEOs to make mid-course corrections have a semantic problem. Leaders must be convinced that mid-course corrections will not be labeled as "indecisive" or "waffling." Such negative words are inconsistent with a positive sense of self. On the other hand, adaptability in the face of changing circumstances is consistent with a positive self-concept.

Some CEOs deride Sarbanes Oxley as an example of legislative overkill. They say that it will move the board/CEO relationship into an adversarial stance. Such a stance will only harm shareholders and waste resources. Sull's perspective is powerful people are only too human. And they are all too human in predictable ways.

A valid checks and balances system should keeps the LBJ Effect from getting out of hand and help companies decide when it is time to destroy their own success formula before competition does it for them. Maryanne Peabody and Laurence J. Stybel,Ed.D. are co-founders of Board Options, Inc. Its mission is to increase Board effectiveness through the application of practical behavioral Science.

Successful Second Acts.......2004-01-26

F. Scott Fitzgerald wrote in 1940 that there are no second acts in American Lives. Professor Sull's witty, crystalline prose in Revival of the Fittest offers a rebuttal. Sull's case-studies of corporate rebounds and managerial reinventions provides a global array of second acts.

Contrary to the following review, Sull's wise reflections, his acute hindsight, on what separates mid-course corporate successes from failures is full of insights, though not quick-fixes or one-size-fits-all makeovers.

Rather, Sull provides an array of diagnostic tools for managers, helping them isolate the "active inertia"--a term he has coined and that is gaining currency among business theorists--and sift through the vast horizon of possibilities and risks managers in crisis must face.

A multi-disciplinary work with a global perspective, Revival of the Fittest is both informative and potentially transforming.

Disappointing - lots of hindsight with no insight.......2004-01-22

Not very impressed.

This book is based upon many interviews and observations with over 2 dozen companies around the world. However its all observation based upon hindsight of 'what' happened, with no real revelations into 'why'.

The selections are not convincing.

There's plenty of reference to Asahi Breweries in Japan who literally bet the whole Company on one idea about creating a market for Dry Beer. It paid off, but such a venture was very dangerous. Other Companies are studied that also bet everything yet didn't pay off; but there's no real insight into why the outcomes were different.

The index is poor; many Companies mentioned in the text don't appear in the Index. Compaq appears indexed under both 'failed transformations' and 'successful transformations' - so I re-read the relevant pages. It's the same anecdote, simply saying that what they did was a success 1991-98, but then caused their failing post-98? So what should they have done? If following the same action is deemed a 'fail' over 10 years, is it appropriate to still call it a 'success' over 8 years?

It's a history lesson, but with no real tools & techniques to take away for the future.

The strong shall become weak, and the weak strong again.......2003-11-27

At some point in a great battle between good and evil, at least as portrayed in pop culture, we can expect the villain to gloatingly assert: "It is your very goodness that will make you weak and fail." Professor Donald Sull is no super-villain but makes a similar, though rather more developed, claim about the best businesses. Rather than blaming the failure of a previously excellent company on incompetence, corruption, laziness, or lack of imagination, Sull locates the problem of stumbling giants in active inertia: the tendency of management to respond to disruptive changes by accelerating activities that succeeded in the past. In Revival of the Fittest, Sull analyzes this barrier and helps managers tackle the demanding task of overcoming it.

To overcome active inertia, Sull recommends neither evolutionary nor revolutionary change typically prescribed for faltering champions. Instead he explains the power of transforming commitments. Commitments matters, he explains, in that they both enable effective management and can disable it when they no longer fit what is needed. Managers select, make, honor, and less often remake commitments or binding actions by investing capital, making personnel decisions, exiting a business, making public promises, making public promises, forging relationships with resource providers, writing contracts, or by manipulating information. Commitments are a powerful tool for creating the desired future but they also become cognitive, cultural, and structural shackles that prevent a company from changing - even when the need to change is clear to all.

Companies take shape at the beginning of the "life cycle of commitments" through defining commitments consisting of strategic frames, resources, processes, relationships, and values. The character of the organization hardens over time as managers make reinforcing commitments large and small. The best companies develop a "success formula" that becomes the envy of competitors and the source of best practices for writers and consultants. This story takes a tragic turn when, eventually and inevitably, a gap opens and widens between the nature of the company and the business environment. The only way out - if one exists at all - is through transforming commitments that require boldness, prudence, and tenacity.

Sull uses pairs of companies to show how some have spiraled down while others successfully made and kept their transforming commitments. IBM's justly famous transformation under Gerstner exemplifies the latter, though this is only one of a wide range of illuminating examples in the book. Sull casts light on the active inertia trap which can arise from the basis of any of the original defining commitments. He follows this with eight risk factors to check for and some diagnostic tests to administer. If transforming commitments fit your situation, you must then choose the right anchor. This may be a new strategic frame but may also be new resources, processes, relationships, or values. The right anchor needs to be worked on by the right person who gives the transforming commitments traction by making commitments credible, clear, and courageous.

Since commitments are powerful tools, Sull's cautious advice includes an unflinching look at seven common mistakes that can lead transformation efforts off-track. Neither does Sull allow managers to anticipate the benefits without also appreciating the personal costs. The book does not try to delve deeply into every relevant aspect of each stage, allow the book to convey vital points while remaining slim enough for busy executives to actually read.

Refreshing look at the rise, fall, rebound of companies.......2003-11-20

This is an excellent, pragmatic, and thoroughly engaging book on how successful companies can find themselves at risk for failure due to what Sull coins as "active inertia". This concept is illustrated with a great set of corporate examples which are different from the ones used in many other business texts -- and this is a key feature which sets the book apart from its competitors. Sull walks the reader through some very useable steps for how companies can transform themselves and avert obsolescence. A great book, greatly written.

[Re]focus. (Marginal).(Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them)(Book Review): An article from: Automotive Design & Production

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[Re]focus. (Marginal).(Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them)(Book Review): An article from: Automotive Design & Production
Gary S. Vasilash
Manufacturer: Gardner Publications, Inc.
ProductGroup: Book
Binding: Digital

Industry | Automotive | Nonfiction | Subjects | Books
ASIN: B0008DTXZW
Release Date: 2005-07-31

Book Description

This digital document is an article from Automotive Design & Production, published by Gardner Publications, Inc. on July 1, 2003. The length of the article is 603 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: [Re]focus. (Marginal).(Revival of the Fittest: Why Good Companies Go Bad and How Great Managers Remake Them)(Book Review)
Author: Gary S. Vasilash
Publication: Automotive Design & Production (Magazine/Journal)
Date: July 1, 2003
Publisher: Gardner Publications, Inc.
Volume: 115 Issue: 7 Page: 6(1)

Article Type: Book Review

Distributed by Thomson Gale

Book Description

A BRIEF HISTORY OF THE ORGANIZATION is a captivating chronology of the thought leadersÂ—from Plato to Rousseau, Sir Isaac Newton to Stephen Hawking, Weber to Drucker, McGregor to Peters and HammerÂ—who have identified the fundamental pillars of organization effectiveness and thus have broken the barriers that cause organization gridlock and loss of human commitment. Lynn Bentley highlights their theories and practices plus groundbreaking accomplishments: Levi-StraussÂ's penetrating insights about the interworkings of prehistoric clans, Immanuel KantÂ's formulation of a basic scientific method, August ComteÂ's development of Sociology, Elton MayoÂ's eye-opening discoveries resulting from The Hawthorne Study, Fredrick HerzbergÂ's thought provoking new work model known as Job Enrichment. Weaving centuries of organization evolution with current corporate CEO case studies and the discussion of a highly workable organization effectiveness model, Bentley artfully makes the study of the organization part of the panorama of history.

Marcia Dunn, Associated Press, reports that the new shuttle director is leading the change to the NASA environment to insure that workers aren't afraid to voice recommendations or be proactive. The Columbia accident investigators blasted the agency for use of autocratic management methods that created a culture where workers were too afraid to raise issues.

Unfortunately, it required the replacement of the two top leaders to set this needed change process in motion. The new program manager was selected to lead the agency because he can nurture and develop a team. Current and past leadership can now look back and trace the slow destructive culture change from the one that existed in the '60s and '70s. Most of the agency team are committed to carry out all 29 recommendations made by the investigators while some still deny that much needs to be fixed.

Most of us have witnessed or experienced the fallout caused by ineffective organizational leadership and recognize that fundamental management initiatives are within our sphere of influence. It was this recognition several years ago that motivated me to write my book, A Brief History Of The Organization and commit a key portion of our consulting focus to executive leadership development.

Customer Reviews:

New Motorola CEO Uses Organization EffectivenessTechniques.......2004-04-27

The Chicago Tribune reports that Motorola's new CEO is getting rave reviews from employees and customers. As a Motorola vendor and satisfied reader of this book, I was amazed at the proof the article provided that Bentley's effectiveness model is correct. He challenges readers to conduct studies that would prove or disprove his theory that there are four primary forces that drive organization success ( Purpose, Participation, Performance Management, Precision )

Motorola's stock is up 40% since Edward Zander's first day 3 months ago. His leadership is driving change to management processes, corrective action with difficult cultural issues and the revamping of the 5 year business plan.

Needed change is being implemented as a result of the assessment completed, the way he measures and motivates his team and how he drives discussion and decision making (Performance Management). The first move was to change the compensation system which will now be directly linked to total company performance versus the individual's business unit. The primary success measures are operating earnings, cash flow, quality/customer satisfaction, revenue growth and teamwork(Precision).

His vision for the company has been discussed with a major cross section fo the "rank and file" during town hall meetings at most major global locations. Employees and customers find him engaging and open and his leadership has stimulated a new style of decision making(Participation). Zander intends to refocus the entire company on a return to the original Motorola culture: smart people figuring out things fast where everyone shares accountability, execution, a sense of urgency, customer delight and healthy competition(Purpose).

This account is very similar all of the CEO case studies included in Chapter 7 of this book. I encourage readers to read the book and draw their own conclusions

Very Timely Book.......2003-10-20

A recent Associated Press report in the Miami Herald reinforces the timeliness of this book. A new shuttle director is leading the change to the NASA environment to insure that workers aren't afraid to voice recommendations or be proactive. The Columbia accident investigators blasted the agency for use of autocratic management methods that created a culture where workers were to afraid to raise issues.

Unfortunately, it required the replacement of the two top leaders to set this required change in motion. The new program manager was selected because he can nurture and develop a team. Current and past leaders have looked back and now recognize that a slow destructive change took place over the past 20 years.

For those who have experienced or witnessed the fallout caused by this type of negative environment and would like to deal with root causes, this book offers very practical methods to lead needed change efforts.

A Brief History Of The Organization is timely and pragmatic........2003-06-15

This book is both a very interesting historical review of organization dynamics and an effective "how to" for modern organization leadership. It successfully weaves a pragmatic connection between physical and social sciences that is easily understood. The book references many popular, recently published books that cover a wide range of related topics (e.g. cosmology, history, organization theory, fiction).

The prologue sets the tone with a account of Issac Newton as a successful general manager that proceeds to a historical review beginning with prehistoric clans as the first organization unit to early philisophical and scientific beliefs. Each chapter highlights the study of organization dynamics during succeding historical era's.

The reason Newton was used to begin the book becomes obvious with Bentley's linkage of physics to a model for organization effectiveness. This "common sense" theory passes the basic scientific method and practical application test. He also challenges readers to test the theory.

One of the most interesting chapters includes 5 CEO case studies that demonstrate many basic organization leadership applications (e.g. Citigroup,Pfizer). These highly successful executives have not applied any current highly popular methods but stick to a few fundamentals. They reinforce the organization effectiveness model that most readers can easily apply and test.

This is an interesting non fiction "page turner" that those interested in history and what makes organizations work will enjoy!

Book Description

This book traces the history of Buena Vista, an estate located in the southern foothills of Puerto Rico's central mountain range. Now a popular living history museum, Buena Vista flourished in the nineteenth century—first as a farm that furnished food for the city of Ponce and surrounding plantations, later as a producer of corn and cornmeal ground at the estate's water-powered mill, and finally as a coffee plantation.

Drawing on an impressive range of primary sources, Guillermo Baralt portrays the estate's history as a series of overlapping changes: from slavery to salaried labor, from primitive processing techniques to the latest in mill technology, from Spanish rule to American control, and from hard-scrabble country life to life as part of the world marketplace. Richly illustrated and written in a lively narrative style, Buena Vista paints a compelling portrait of an era, an island, a family, and an estate, bringing a period in Caribbean history to vivid life.

Customer Reviews:

Buena Vista: Life and Work on a Puerto Rican Hacienda, 1833-1904.......2006-11-05

Historically, factual, fascinating, a wealth of information culturally, and a must read (required) for all Puerto Ricans, Newyoricans, and ANYONE interested in the history of the founding fathers of the New World!...I found this book, while researching the archives online at the New York Historical Society's Library. But, it only showed the original, which was written in Spanish. The history and clarity of the subject matter contained in this book is long overdue, and covered the subject spectrum 100%!

After speaking with my brother, whose first visit to Puerto Rico (at a ripe old age of 49), included a visit to 'Plantation Buena Vista,' he told me about the rich history that he saw there, and that he was totally fascinated by it! I again, researched this book online at [...], and saw, that it was redone in English, so that, I could read it!

If I were asked to contribute anything to this book, I would just say, that I would have liked it to be broader to include more chapters! Perhaps, a sequel to this book can be written! Or, maybe even, it should be made into a TV Series...muchas, Alex Haley's TV miniseries, "ROOTS!"

The ongoing saga of the Buena Vista Plantation, rich cultural history of the Vives Family and Puerto Rico after the turn of the century, is equally, and, even more, compelling a story!

Thank you Amazon for providing this book, as it filled in the facts that not being able to read comprehensively in Spanish has cost!

Excellent History Reading on Life in P.R. Hacienda.......1999-09-22

I received this book on Saturday and finished it Sunday . An excellent, detailed account on life in a Puerto Rican Hacienda. Wonderful illustrations of people of the time and details of sophisticated equipment used in those time. A true picture of how life was then. My grandfather was a farmer and worked on a plantation so this gives light to some of the stories he told me about. An excellent books for anyone that wants to know about their roots and is especially interested in the Ponce area although this was probably typical of all plantations. A must read!!!

100% must read........1999-07-01

If your really into history Colonial days you should really put your hands on this one. It takes you on a drive full of feeling to that era. Im Italian and it made me recall my grandparents village in Palermo... I give Gullermo A. Baralt an A+

Excellent.......1999-06-29

(From Planeta journal): This new English-language translation of an established Caribbean classic traces the history of the Buena Vista estate in the foothills of Puerto Rico's central mountain range. Now a living history museum, Buena Vista gained its initial success producing food for the town of Ponce, proving that raising crops for local consumption could be as profitable as sugar or coffee for export. The text spans almost a century -- a time in which slavery ended and technology expanded at a phenomenal rate. This is an exceptional book, one that any visitor to Puerto Rico should read before making an obligatory visit to the island's Living Museum of Art and Science.

BUENA VISTA: LIFE AND WORK ON A PUERTO RICAN HACIENDA, 1833-1904. Translated by Andrew Hurley.

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BUENA VISTA: LIFE AND WORK ON A PUERTO RICAN HACIENDA, 1833-1904. Translated by Andrew Hurley.
Guillermo A. Baralt
Manufacturer: UNC Press,
ProductGroup: Book
Binding: Hardcover
ASIN: B000N7I3HM

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Customer Reviews:

Great review-text for NYS biology.......2004-12-01

I had the opportunity to review "Let's Review - The Living Environment" for inclusion in our district's textbook library. I found it to be a superior resource both for students and for teachers. This title is way out in front of other review-texts for this course and will help students to get through the New York State Regents exam in fine shape.

Global History and Geography Power Pack (Regents Power Packs)

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Global History and Geography Power Pack (Regents Power Packs)
Martin & Streitwieser Lefton
Manufacturer: Barron's Educational Series
ProductGroup: Book
Binding: Paperback

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ASIN: 0764173685

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Barron's unique two-book combinations in these Regents subjects offer a savings off the cost of the books when they are purchased separately. Power Packs in both subjects consist of a Barron's Regents Exams and Answers book, and a Barron's Let's Review book. Together, each two-book Power Pack offers high school students comprehensive drill, review, and exam preparation in both Global Studies and U.S. History and Government.

Customer Reviews:

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Barron's Regents Power Pack Biology: Barron's Regents Exams and Answers/Barron's Let's Review

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Barron's Regents Power Pack Biology: Barron's Regents Exams and Answers/Barron's Let's Review

Manufacturer: Barrons Educational Series Inc
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ASIN: 0812083679

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Biology: The Living Environment (Regents Power Packs Series)

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Biology: The Living Environment (Regents Power Packs Series)

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Binding: Paperback

General | Science | Subjects | Books

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Great Review.......2003-07-03

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