Success Brings Unintended Consequences

Starbucks' battle back from mediocrity is well documented in CEO Howard Schultz's new book "Onward." Pairing it with Jim Collins' 2009 book "How the Mighty Fall" gives ChurchWorld a sobering lesson in how to handle success.

Collins' 5 Stages of Decline begin with "Hubris Born of Success." He describes it in a short paragraph:

Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and the lose sight of the true underlying factors that created success in the first place. When the rhetoric of success ("We're successful because we do the specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do the specific things and under what condition they would no longer work"), decline will likely follow.

Here's what Starbucks' Schultz had to say in looking back to early 2008:

If not checked, success has a way of covering up small failures, and when many of us at Starbucks became swept up in the company's success, it had unintended effects. We ignored, or maybe we just failed to notice, shortcomings.

We were so intent upon building more stores fast to meet each quarter's projected sales growth that, too often, we picked bad locations or didn't adequately train newly hired baristas. Sometimes we transferred a good store manager to oversee a new store, but filled the old post by promoting a barista before he or she was properly trained.

As the years passed, enthusiasm morphed into a sense of entitlement, at least from my perspective. Confidence became arrogance and, as some point, confusion as some of our people stepped back and began to scratch their heads, wondering what Starbucks stood for.

In the early years at Starbucks, I liked to say that a partner's job at Starbucks was to "deliver on the unexpected" for customers. Now, many partners' energies seemed to be focused on trying to deliver the expected - mostly for Wall Street.

Great companies foster a productive tension between continuity and change. On the one hand, they adhere to the principles that produces success int the first place, yet on the other hand, they continually evolve, modifying their approach with creative improvements and intelligent adaptation.

When organizations fail to distinguish between current practices and the enduring principles of their success, and mistakenly fossilize around their practices, they've set themselves up for decline.

By confusing what and why, Starbucks found itself at a dangerous crossroads. Which direction would they go?

Questions for ChurchWorld

• Is your organization locked in on your core values, purpose, and culture?
• Or do you move in first this direction, then that, just to have "success"?

Beware the unintended consequences of success

The Genius of the "AND" in Real Life

In the fall of 2005, I attended the Coast to Coast Multi-Site Conference at Community Christian Church in Naperville, IL. While there I talked with some of the staff members, who shared with me a practical application of "The Genius of the AND."

The following illustrates how Dave Ferguson, lead pastor of CCC, views the concept of multi-site: by comparing them to what goes on in the banking, health care, higher education - and church settings.

Our institutions are growing larger and smaller simultaneously, blending the strength that size offers with the comfort and convenience of smaller, closer venues. This is one example of what Jim Collins in “Built to Last” called "the genius of the AND," the paradoxical view that allows you to pursue both A and B simultaneously.

While developing our multi-site church, we discovered these advantages that all demonstrate the genius of the AND:

Brand new AND trusted brand
We've found a similar dynamic with the multi-site church. It has the upside of what used to be denominational loyalty, which was prominent in yesteryear but now is found in congregational loyalty. The particular congregation is the trusted brand, and the opening of a new site makes it brand new.

Staff with generalists AND specialists
The multi-site church allows you to start a new location with the existing staff in place. Instead of hiring more generalists, you add specialists such as technical arts, administrator, or director of creative arts for children.

Less cost AND greater impact
Financially, a new campus is tremendously cost effective. When we started our north campus (our first) we spent lots of money on staff, equipment, and marketing. When we started our south campus (our second site), we spent less money, added specialists to our existing staff team, and a similar marketing blitz. We had 565 at the first service, but more importantly, after three months we were averaging 360 at our south campus, again 80 percent unchurched. Doing the math, that's 39 percent retention at our first location, and 64 percent retention at our second location. Our second campus cost less money to start, reached more people, and resulted in a greater retention.

New church vibe AND big church punch
Lyle Schaller told us, "The most important thing you offer to this new work is your large church culture." At first I wasn't sure what he was talking about. He meant expectations and excellence. We were able to launch the second site with the same level of excellence that it took us eight years to achieve at our north campus.

Move there AND stay here
Growing churches and real estate have this in common: "location, location, location." Many existing churches, particularly older churches, are located in communities with little growth. These churches look across town where new development is happening and they see the potential. Perhaps many of their members are moving there. After looking at their options, instead abandoning their existing site to move to the booming west side, they can choose to "move there and stay here." That keeps a campus in the downtown neighborhood with an intentional outreach to the community, and allows the launch of a campus in one of the faster growing areas.

More need AND more support
As we think about a new site, we lay out a matrix of about 100 blanks, representing the positions we need to fill in order for us to launch. The increased opportunities create a vacuum that challenges more people to step in to serve in voluntary leadership roles in all areas, such as children's, hospitality, and small groups.

More outreach AND more maturity
While people will drive long distances to join the weekly celebration service at a large church, if they live more than 20 minutes away, their ability to serve and to invite friends is diminished. A multi-site campus allows them to participate in volunteer teams as well as small groups.The multi-site church reaches out to make both more Christians and more mature Christians.

That's the Genius of the "AND" in real life.

How are you going to put it into practice at your organization?

Embrace the Genius...

of the "AND"

Instead of being oppressed by the "Tyranny of the OR," highly visionary leaders - and the organizations they lead - liberate themselves with the "Genius of the AND" - the ability to embrace both extremes or dimensions at the same time.

Instead of choosing between A OR B, they figure out a way to have both A AND B.

Jim Collins first introduced this line of thinking in "Built to Last" in 1994. Intended primarily for the business audience, it wasn't long till perceptive church leaders picked up the idea and ran with it.

For example, here are a few ways it might play out in ChurchWorld:

On the one hand                                 Yet on the other hand
a fixed core ideology          AND        vigorous change 
conserve the core              AND         bold, risky moves
clear vision and direction    AND        experimentation 
leaders steeped in the core AND        leaders who induce change
ideological control              AND        operational autonomy
close-knit culture               AND        ability to change and adapt
long-term goals                 AND        short-term performance

This is not just a balancing act. "Balance" implies going to the midpoint, fifty-fifty, half and half. Visionary leaders lead organizations that seek to have a fixed core ideology and take vigorous change to the extreme.

There's no gray, cloudy, shapeless mass in these organizations. It's a bold attempt to be both "this" AND "that" - at the same time, all the time.

Need a real-life example in ChurchWorld? Come back tomorrow and see how some of the early pioneers in today's multi-site movement used the genius of the "AND" to launch a movement.

Reject the Tyranny...

... of the "OR"

Without a doubt one of the most influential business writers of the past 15 years has been Jim Collins. Some of the most respected leaders in ChurchWorld list his works as tremendously important in the foundation of critical elements of their development - both as individuals and of their ministries.

Level 5 Leadership - First Who, Then What - Hedgehog Concept - Culture of Discipline - The Flywheel - BHAG

If you recognize these phrases, then you are probably familiar with Collins' work. If you don't, I suggest you check out "Built to Last," "Good to Great," "How the Mighty Fall," and "Good to Great and the Social Sectors."

Of all his insightful work, my favorite is the brilliantly simple concept of dualism, referred to in the title. I'll introduce it today, and finish it tomorrow.

The Tyranny of the "OR"

It's easy to understand why leaders - or organizations - subscribe to the rational view that cannot easily accept paradox, that cannot live with two seemingly contradictory forces or ideas at the same time. The "Tyranny of the OR" pushes people to believe that things must be either A OR B, but not both. It makes such proclamations as:

• You can have change OR stability
• You can be conservative OR bold
• You can have low cost OR high quality
• You can have creative autonomy OR consistency and control
• You can invest for the future OR do well in the short-term
• You can make progress by methodical planning OR by opportunistic groping
• You can be idealistic OR pragmatic

Why?

Is there a natural principle at work here like gravity? "That's the way things have always been"; That's the we we've always done it"; "It's always worked that way before, so why change it now?"

I think not.

There is a better way...

The Window and The Mirror

This week I was talking with a church leader and the concepts of Jim Collins' "Level 5 Leader" came up in our discussion.

The conversation triggered a quick revisit to the book, and to this little gem by Collins:

Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck).








At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.




Every leader looks out the window and in the mirror.


What do you see?

We All Fail...

...the key is not failing at it.

James Emery White, in a recent post at ChurchandCulture.org, has made a great case in realizing how not to fail at failing. His six ways churches fail at failing:

• Failure to address your failure though innovation until such innovation is pursued out of desperation and in imitation of existing mainstream innovations
• Failure to address your failure through relocation until that time when relocation is no longer a viable option
• Failure to address your failure through changes in existing staff
• Failure to address your failure through a renewed focus on the mission
• Failure to address your failure by not expanding strategically
• Failure to address your failure by failing to look in the mirror

Do you fail at failing?

In other words, do you fail to do - in the midst of failing - what needs to be done to stop failing?

For more great thoughts on failing, check out:

How the Mighty Fall, by Jim Collins

Failure is not so much a physical state as a state of mind; success is falling down, and getting up one more time, without end.



The Dip, by Seth Godin

All our successes are the same; all our failures, too.

We fail when we give up too soon.

We succeed when we are the best in the world at what we do.

We fail when we get distracted by tasks we don't have the guts to quit.

Failing Forward, by John Maxwell

When you learn to fail forward, you won't ever have to give up.

The Geometry of Choice

Take a look at almost any decision-making reference in a book or magazine and what do you see? Most likely a matrix with one desirable feature across the top and another down the side. Conventional wisdom says you read the matrix in straight lines - you have to choose which feature you're going to favor.

What if you chose both?

I first came across this idea in Jim Collins' book "Good to Great." Since then, many writers have used the phrase "both/and" to refer to decision making that references both issues in a choice. Alan Webber, writing in "Rules of Thumb" states it this way:

We've moved from an either/or past to a both/and future.

One of the skills that defines an entrepreneur and an innovator is the capacity to generate new lines of sight. That mean looking at problems along a new dimension. It means rejecting old either/or choices and finding new both/and combinations.

It's like the game of chess. Most of the plays involve moving pieces forward or backward or sideways. But the bishop? It's a game changer because it moves on the diagonal. Now you have the ability to move across and up on the board at the same time. You have changed the geometry of choice with one move.

How are you going to put into practice the skill of making "both/and" decisions in your organization today?

How the Mighty Fall

Stage 5: Capitulation to Irrelevance or Death

You pay your bills with cash. You can be profitable and bankrupt. Bill Lazier, Stanford Graduate School of Business

There are two basic versions of Stage 5 for organizations: 1) Those in leadership believe that capitulation offers a better overall outcome than continuing to fight; and 2) those in leadership continue to struggle, but they run out of options and the organization either dies outright or shrinks into utter irrelevance.

By the time an organization has moved has moved through Stages 1, 2, 3, and 4, those in leadership can become exhausted and dispirited, and eventually abandon hope. And when you abandon hope, you should begin preparing for the end.

Not all organizations deserve to last. Institutional self-perpetuation holds no legitimate place in the world of scarce resources; institutional mediocrity should be terminated, or transformed into excellence.

If you cannot marshal a compelling answer to the question, “What would be lost, and how would our community be worse off, if we ceased to exist?” then perhaps capitulation is the wise path. But if you have a clear and inspired purpose built upon solid core values, then the noble course may be to fight on, to reverse decline, and to try to rekindle greatness.

The point of the struggle is not just to survive, but to build an organization that makes such a distinctive impact on the world it touches, and does so with such superior performance, that it would leave a gaping hole – a hole that could not be easily filled by any other institution – if it ceased to exist.

Questions for ChurchWorld
John Moore, at Brand Autopsy, has a long-running series of posts about various companies we encounter every day. He posed a simple thought: Would we miss this company if it were gone? Here are his questions - answer them for your church:

• Does my church provide such a unique ministry and experience that our community would be saddened if it didn’t exist?


• Does my church treat its staff (paid and unpaid) so astonishingly well that those workers would not be able to find another place of ministry service to treat them as well?


• Does my church forge such unfailing emotional connections with its members and attenders that they would fail to find another church that could forge just as strong an emotional bond?

I hope you have been challenged by this week's look at "How the Mighty Fall". Jim Collins continues his great work with this book; as with "Built to Last" and "Good to Great" there are tremendous lessons for the church in his research and conclusions. I encourage you to get a copy today and begin asking the tough questions raised in it.

How the Mighty Fall

Stage 4: Grasping for Salvation

I don’t have a sense of crisis. I have a sense of urgency that never changes. Louis Gerstner, IBM

Stage 4 begins when an organization reacts to a downturn by lurching for a silver bullet. They go for a quick, big solution or bold stroke to jump-start a recovery, rather than embark on the more pedestrian, arduous process of rebuilding long-term momentum.

Stage 4 grasping can produce a brief improvement, but the results do not last. Dashed hope follows dashed hope follows dashed hope yet again. Organizations stuck in Stage 4 try all sorts of new programs, new fads, new strategies, new visions, new cultures, new values, new breakthroughs, new acquisitions, and new saviors. And when one silver bullet fails, they search for another.

The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.

Rebuilding greatness requires a series of intelligent, well-executed actions that add up one on top of another. Most “overnight success" stories are about twenty years in the making.

When we find ourselves in trouble, when we find ourselves on the cusp of falling, our survival instinct – and our fear – can evoke lurching, reactive behavior absolutely contrary to survival. By grasping about in fearful, frantic reaction, late Stage 4 organizations accelerate their own demise.

Markers for Stage 4

• A series of silver bullets
• Grasping for leader-as-savior
• Panic and haste
• Radical change and “revolution” with fanfare
• Hype precedes results
• Initial upswing followed by disappointments
• Confusion and cynicism
• Chronic restructuring and erosion of financial strength

The very moment when we need to take calm deliberate action, we run the risk of doing the exact opposite and bringing about the very outcomes we most fear.

Questions for ChurchWorld

• Have you stopped momentum in your church with chronic restructuring and/or as series of inconsistent big decisions?
• Do you sell people on the promises of a brighter future to compensate for poor results today?
• Have you made panicky, desperate moves in reaction to threats that imperil your organization even more, further eroding your resources?
• Have you embarked on a program of radical change, a revolution, to transform nearly every aspect of your organization, jeopardizing or abandoning core strengths?

How the Mighty Fall

Stage 3: Denial of Risk and Peril

We just didn’t have enough conclusive data to convince anyone.
NASA O-Ring Task Force following the Challenger disaster

As organizations begin to move into Stage 3, we begin to see the cumulative effects of the previous stages. Stage 1 hubris leads to Stage 2 overreaching, which sets the organization up for Stage 3, Denial of Risk and Peril.

The greatest danger comes not in ignoring clear and unassailable facts, but in misinterpreting ambiguous data in situations when you face severe or catastrophic consequences if the ambiguity resolves itself in a way that’s not in your favor.

When facing irreversible decisions that have significant, negative consequences if they go awry – what you might call “launch decisions” – the case for launch should require a preponderance of empirical evidence that it’s safe to do so.

One common behavior of late Stage 3 is when those in power blame other people or external factors – or otherwise explain away the data – rather than confront the frightening reality that the enterprise may be in serious trouble.

A final manifestation of denial deserves special attention: obsessive reorganization. Reorganizations and restructurings can create a false sense that you’re actually doing something productive. Organizations are in the process of reorganizing themselves all the time: that’s the nature of growth. But when you begin to respond to data and warning signs with reorganization as a primary strategy, you may well be in denial.

Markers for Stage 3

• Amplify the positive, discount the negative
• Big bets and bold goals without empirical validation
• Incurring huge downside risk abased on ambiguous data
• Erosion of healthy team dynamics
• Externalizing blame
• Obsessive reorganizations
• Imperious detachment

Audacious goals stimulate progress, but big bets without empirical validation, or that fly in the face of mounting evidence, can bring organizations down, unless they are blessed with unusual luck. And luck is not a reliable strategy.

Questions for ChurchWorld

• What’s the upside, if events turn out well?
• What’s the downside, if events go very badly?
• Can you live with the downside? Truly?

How the Mighty Fall: Stage 2

Stage 2: Undisciplined Pursuit of More

An organization is more likely to die of indigestion from too much opportunity than starvation from too little - David Packard, Hewlett Packard

Overreaching, not complacency, much better explains how the once-invincible self-destruct.
Frenetic innovation – growth that erodes consistent tactical excellence – can just as easily send a company cascading through the stages of decline.

Hubris (Stage 1) can lead to making brash commitments for more and more and more.

The greatest leaders do seek growth – growth in performance, growth in distinctive impact, growth in creativity, growth in people – but they do not succumb to growth that undermines long-term value. And they certainly do not confuse growth with excellence. Big does not equal great, and great does not equal big.

Undisciplined Behaviors

Discontinuous leaps into arenas for which you have no burning passion

• Taking action inconsistent with your core values
• Investing heavily in new arenas where you cannot attain distinctive capability
• Launching headlong into activities that do not fit your resource engine
• Addiction to scale
• Neglecting your core business while you leap after exciting new adventures
• Using the organization primarily as a vehicle to increase your own personal success
• Compromising your values or losing sight of your core purpose in pursuit of growth

Any exceptional enterprise depends first and foremost upon having self-managed and self-motivated people – the #1 ingredient for a culture of discipline.

When bureaucratic rules erode an ethic of freedom and responsibility within a framework of core values and demanding standards, you’ve become infected with the disease of mediocrity.
Whether a company sustains exceptional performance depends first and foremost on whether it continues to have the right people in leadership, which introduces the last point in this stage.
Leaders who fail the process of succession set their enterprises on a path to decline. One of the most significant indicators of decline is the reallocation of power into the hands of leaders who fail to comprehend and/or lack the will to do what must be done – and equally, what must not be done – to sustain greatness.

Stage 2 overreaching tends to increase after a legendary leader steps away.

While no leader can single-handedly build an enduring great company, the wrong leader vested with power can almost single-handedly bring a company down.

Stage 2 Markers

• Unsustainable quest for growth, confusing big with great
• Undisciplined discontinuous leaps
• Declining proportion of right people in key seats
• Bureaucracy subverts discipline
• Problematic succession of power
• Personal interests placed above organizational interests

Questions for ChurchWorld:
John Maxwell says everything rises and falls on leadership. The number one warning sign for your organization is a declining proportion of key seats filled with the right people. Here are your 24/7 questions:

• What are the key seats in your organization?
• What percentage of those seats can you say with confidence are filled with the right people?
• What are your plans for increasing that percentage?
• What are your backup plans in the event that a right person leaves a key seat?

Choose your leaders well.

How the Mighty Fall: Stage 1

Today begins a series of posts diving into Jim Collins' latest book "How the Mighty Fall." Continuing in his groundbreaking work in "Built to Last" and "Good to Great", Collins uses meticulous research to document 5 stages of decline. Sprinkled throughout his new work are references to his prior work; if you need a quick Collins primer, see here for introductions to terms like Flywheel, Hedgehog, and First Who, Then What.

Stage 1: Hubris Born of Success

It’s far better to create your own future, repeatedly, than to wait for external forces to dictate your choices - Robert Galvin, Motorola

Hubris can be defined as the excessive pride that brings down a hero or outrageous arrogance that inflicts suffering upon the innocent

Multiple forms of hubris

1. Undisciplined leaps into areas where a company cannot become the best
2. Pursuit of growth beyond what it can deliver with excellence
3. Bold, risky decisions that fly in the face of conflicting or negative evidence
4. Denying even the possibility that the enterprise could be at risk from external threats or internal erosion
5. Arrogant neglect

Great organizations foster a productive tension between continuity and change. On the one hand, they adhere to the principles that produced success in the first place, yet on the other hand, they continually evolve, modifying their approach with creative improvements and intelligent adaptation.

When institutions fail to distinguish between current practices and the enduring principles of their success, and mistakenly fossilize around their practices, they’ve set themselves up for decline.

There’s nothing inherently wrong with adhering to specific practices and strategies but only if you comprehend the underlying why behind those practices, and thereby see when to keep them and when to change them.

The best organizational leaders remain students of their work, relentlessly asking questions –why, why, why – and have an incurable compulsion to vacuum the brains of the people they meet.

Stage 1 Markers1. Success entitlement, arrogance
2. Neglect of a primary flywheel
3. “What” replaces “Why”
4. Decline in learning orientation
5. Discounting the role of luck
Questions for ChurchWorld

1. Does your primary flywheel (mission identity) face inevitable demise within the next three to five years due to forces outside your control?
2. Have you lost passion for your primary flywheel?

If you answer no to both questions, continue to push your primary flywheel with as much imagination and fanatical intensity as you did when you first began. Continually experiment with new ideas, both as a mechanism to stimulate progress and as a hedge against an uncertain future. That does not mean static, unimaginative replication; it means never-ending creative renewal.