The Great does fall.As we get older, we live to see the fall of some great companies and stars. During their hay days, it is difficult to see how could they be beaten.  Some fall because of unethical and illegal practices (e.g. Enron), and many falls because of complacency and wrong strategies. They are trapped by their own success.

The most recent case was the story of Kodak chapter 11 filing. Many have written about lessons from Kodak. I think the best answers were given by Clay Christensen’s Disruptive Innovation and RVP Theories. Kodak was first to invent digital photography but they entered it at the wrong end. Instead of pitting new technology at the low end, they used the immature digital technology to compete with the high end of the film camera resulting in digital camera costing $20K to $25K and yet still not as good as the analogue film camera costing 10 times less. This keep them stuck their own film technology and be half hearted pushing for the newer digital technology.

But many other great companies of the past suffered worse fate than Kodak. But such concurrences were predicted 5000 years ago in the Book of Change (i-Ching) of the Ancient Chinese.

There is a Pattern to the Fall
Great Empire, Companies and People do not just fall suddenly. There are patterns and tell tale signs that we can find them. If only they take heed, they could save their pains. The most obvious tell tale sign is stagnation. The progress has stopped. The decline shall begins soon.

We shall look at the wisdom from a particular hexagram, hexagram 12 Stagnation. For details of i-Ching and the hexagram, please refer to Manage Change with I-Ching and 12 否 Stagnation – Don’t Give Up (Registration required). I will just reproduce the summary here:

Summary of #12 否 Stagnation – Don’t Give Up:
Success brings creeping corruption to cause stagnation and decline. Stagnation could be caused by external factors as well, such as  market and technology. The reverse, to revile a stagnation needs initiative orders from the top and support from the righteous people.  There is hope but there must be great effort put in to changing stagnation.

The six stages teachings are summarized as:

1. Pull out the bad and/or outdated practices or people.
2. Watch out for flattery rather than real performance
3. Don’t be shameless. Reveal the bad practices as such – bad practices.
4. The Top must awake and take actions and gather good people to clear the mess.
5. Be careful in executing transformation and get cascaded and aligned support.
6. Beginning is hard, but pursue to the end brings joy. Watch out for the law of degradation.

The first 3 line of wisdom above show us the progressive stages of decline. Firstly, there are bad practices, or outdated practices that are not noticed or taken out. Then, people pay more attention to butter up their bosses rather than really care about performance and customers. Then worse things happen. Good or bad is determined by those bosses, those in power and not by any legal or moral standards. Unless there is a big awakening, the empire, company or the big star, will end in death.

The Transformation

Wisdom line 4, also represent stage 4, tells us the big awakening. The top must be changed or be awakened, and to take steps to transform the company. (I-Ching teaches us much about transformation and break-through in other hexagrams). In a big organization, the CEO cannot do it alone. He must bring in the good and talented people into the organization. Do the reverse of earlier stages, namely, replace bad practices with the up-to-date and good ones. Go on real performance rather than flattery. Restore back the righteous and fair standards.

Line 5 tells the new CEO to continue to cascade the transformation throughout the organization. To link up everything together like a tree (the picture used by i-Ching). Line 6 encourages the CEO that it beginning maybe hard but eventual success will bring great joy and celebration. He that sows in tear will harvest in joy.

Reflections for You

Are you in a job that is involved in turning around a company? Then I encourage you to study i-Ching and learn from it.

Are you working in Google, FaceBook, Apple or other present successful companies, take heed from the teaching of i-Ching and ensure your success is sustainable through time. Build the culture of continued innovation and righteousness within in the organization that you are working for.