How the Mighty Fall

Jim Collins wrote How the Mighty Fall to answer a brutal question: How do organizations that once looked unstoppable end up fading into irrelevance—or vanishing entirely?

Rather than spotlighting best practices from winners, he flips the lens and studies breakdown. His claim is simple: if you understand how decline actually happens, you’re more likely to spot the early drift in your own company and interrupt it before it becomes a free fall. The research he describes compares companies in the same industry, looking for patterns shared by the ones that deteriorated versus the ones that held steady. He’s careful to say this approach shows patterns that line up with failure—signals and correlations—more than it “proves” a single cause. Still, he argues the sequence is common enough to be useful as an early-warning system.

Collins’s tone isn’t just doom-and-gloom. The book is meant to be both a warning for organizations that have gotten comfortable and a rallying cry for those already sliding: decline isn’t fate, and you can fight your way back—if you recognize what stage you’re in and respond with discipline instead of drama.

The Central Idea: Companies Usually Don’t Die Suddenly

A key theme is that collapse rarely arrives like a lightning strike. It more often resembles erosion. A decision here, a cultural shift there, a missed signal, a risky bet, a frantic pivot—until the organization can’t explain what it stands for, can’t generate consistent results, and can’t fund its own recovery.

To make that slow unraveling visible, Collins outlines five phases that frequently show up in corporate decline:

He also notes two important nuances: companies don’t always pass through every stage, and the stages don’t always appear in perfect order. But knowing the “usual suspects” helps leaders detect trouble earlier than they otherwise would.

Phase 1: Overconfidence That Quietly Turns Into Arrogance

Decline often begins right after success—when a company starts believing its own hype.

In this first phase, leaders stop treating success as something fragile that must be re-earned. Instead, they behave as if success is now a permanent property of the organization, like a brand tattoo that can’t be removed. The organization’s identity shifts from “we work hard to win” to “we’re the kind of company that wins.” That shift sounds subtle, but Collins treats it as dangerous because it changes how people interpret feedback, risk, and reality.

He describes two common ways this phase appears:

1) The organization becomes cocky and starts acting invincible.
The company begins making big moves with a casual confidence, as if normal rules no longer apply. Leaders dismiss threats, assume customers will stay loyal no matter what, and treat competitors as annoyances instead of legitimate dangers. In Collins’s examples, this arrogance shows up as strategic stubbornness: leaders cling to a path because “we’ve always been right before.”

2) The organization loses respect for the engine that made it great.
Collins uses the idea of a company’s core momentum driver—the central business system that reliably produces results and keeps the organization moving forward. When leaders get distracted by shiny ...