Could all of the talk about company culture be a farce? Idealistic, “pie in the sky” fluff? Facebook Toronto OfficeJim Collins research says no. His research for How the Mighty Fall, demonstrates that the right culture approach can “substantially increase the odds of reversing decline before it is too late”. As a matter a fact it can keep decline away altogether. After a recent visit to the Toronto Facebook offices we put Collin’s five stages of decline to the test.

In this blog we’ll outline what Jim Collins calls the five stages of decline and highlight how Facebook has built a culture that avoids decline altogether .

“Goals are not dreamy, pie-in-the-sky ideals. They have every day practical applications and they should be practical.”

Les Brown

Five Stages Of Decline

  • STAGE 1: HUBRIS BORN OF SUCCESS
  • STAGE 2: UNDISCIPLINED PURSUIT OF MORE
  • STAGE 3: DENIAL OF RISK AND PERIL
  • STAGE 4: GRASPING FOR SALVATION
  • STAGE 5: CAPITULATION TO IRRELEVANCE OR DEATH

The first stage of company decline according to Jim is when leaders become arrogant and regard success as an entitlement. Facebook encourages their team members to move fast, they’re ok with failing. Having a belief that failure is ok demonstrates a clear lack of entitlement to success. Surprising, we even heard the story about Mark Zuckerberg almost failing on his mobile strategy for Facebook. Originally betting on mobile web, then changing strategies to completely focus on the Facebook Ap. If Mark or the Facebook team believed that they were entitled to winning because of the success to they had up until that point, they would have continued with the original strategy. Who knows where our favorite blue app would be? If Facebook had a success entitlement they may have been surprised, unprepared and discover their original strategy was the wrong move way to late.

Stage three is one that could tie directly into the previous example. Collins warns organizations in stagInstagrame three to pay attention to the
warning signs, not to make light of bad trends and don’t explain away bad trends. With Facebooks revenue moving from $272M in 2008 to $7.8B in 2013 it would have been easy for them to explain away the positive revenue early on and not invest further. They didn’t, continually looking for innovative new ways to help businesses advertise and launching new advertising opportunities like Instagram and video ads.

If you stick around at the Facebook office too long you could end up in one of their lockdowns. A lockdown at Facebook is a heads down, all hands on deck push the product to the finish line event. With a laser focus on shipping they don’t confuse making “motion” and making progress. Going back to the five stages of decline the opposite is true for organizations that fail, “Investing heavily in new arenas where you cannot attain distinctive capability, better than your competitors, is undisciplined.” Facebook’s lockdown approach to ship ensures they don’t fall victim to an undisciplined pursuit or stage two.

The fourth stage of decline could be Facebook’s “Achilles heel”, Grasping for Salvation. This stage is one where calm, mindful decisions need to happen. Where businesses need to avoid making reactionary decisions and reactionary choices. One of Facebook’s core values is to “Move Fast”. They have a belief that mistakes are ok, trying for opportunities is more important. While it’s there is no question that this has worked for Facebook up until this point. Should they ever fall into a decline this core value should be revisited. But until then, it’s certainly uncovering opportunities.

img_5957

The fifth and final stage of decline is losing sight on the companies mission, or their “why” as Simon Sinek refers to it. To avoid this final stage of decline leaders need to “retain faith that they can find a way to prevail in pursuit of a cause larger than mere survival”. Facebooks objective to “Build Social Value” is the why they drive toward. Not just building a company but to create a world that is more connected and open. They have an expectation of every employee to build real value for the world in everything they do.

Finally, the question we posed in this post now needs to be answered. Is Facebooks culture just “Pie In The Sky” Talk? Certainly not. As we compare their core values, achievements and vision to the five stages of decline there is evidence that they actively avoid five of the four stages while not even in a decline.