lead.
Nik Gowing, London, UK
Foreword by Prof. Dr. Peter May
Leading expert on family businesses and strategic consulting for owner-led organizations.
Business people love a success story: a story of victory, of rags to riches, of making it. We are fascinated by entrepreneurial legends, no matter whether they hail from the digital or the industrial age. The path travelled from a one-man operation to the hundred-million-turnover “hidden champion” in one or two generations or the rise of a regional player to a global multinational—these are exciting role models that invite and inspire imitation.
But how certain can we be about the factors that lead to such an ascent? In hindsight, the reasons for a successful development almost always appear obvious: timely reengineering, cost management, well-thought-out strategies, the right product, the power of innovation—all these factors are repeatedly cited as reasons for extraordinary success. And they are correct—at least at first glance.
Over the years, the collective wisdom of business administration has assembled a framework of knowledge upon which, in its eyes, proper and effective business should be conducted. With specialist areas such as cost management, accounting, marketing, and human resources, this framework provides the academic tools on which real-life business success is widely assumed to depend. Stick to the rules of bookkeeping, profit-making and numerous other systems of prescribed business wisdom and everything will remain on the right track. But if this is true, why do so many companies fail? We’re all familiar with cases in which everything has been done exactly by the book, yet a business has still disappeared without trace. And such scenarios are not choosy: they can strike the mid-sized engineering company or the multibillion-dollar corporation just as readily as the small business around the corner. Failure happens despite adherence to the generally accepted rules.
It is testimony to the merits of Andreas Krebs and Paul Williams that they have written a new chapter in the narrative of entrepreneurial thinking. In The Illusion of Invincibility, the writers engage with two fundamental constants of human endeavor: success and failure. They have the courage to transcend the comfortable boundaries of an isolated specialist discipline and to expose overarching links and relationships, revealing valuable parallels and insights for everyone active in the business world. They place fundamental questions in a new context: Why and under what conditions do systems triumph, become resilient, and have the ability to expand their sphere of activity? What triggers turning points and what causes decline?
Conventional thought on management brings only a limited supply of answers. Though the practice of management has undergone countless refinements and improvements since the publication of Peter Drucker‘s magnum opus Concept of the Corporation in 1946, it has, at a basic level, perpetuated “the company” as a universal frame of reference. This book goes further. It draws new links in precisely the places where they appear to be of highest potential benefit and interest. It enriches our leadership knowledge with historical perspectives and with an insight into the general principles of rise and fall, an approach that is both exciting and indispensable for modern business management. Furthermore, it is certainly no accident that Krebs and Williams regularly refer, for their overarching perspective, to the fate of the Incas, as the South American empire exemplifies both sides of the story—the rise and the fall.
The rise of the Incas lasted for centuries. In today’s wording, that translates to a success story with more to offer than the usual reflections on short-term management—and even the decline of the Incas (as a result of the invasion of the Spanish conquerors and the fraternal strife of two rulers) provides valuable additions to our current management know-how. In pre-Columbian times, the Incas’ knowledge of management and expansion was far superior to that of other peoples of the time; highly developed agriculture, a network of transport routes and an efficient communications system were the central pillars of a state system which, thanks to an effective combination of negotiation, cooperation, and the exercise of power, was readily able to expand its sphere of activity. Placing this in the context of companies, we would speak of international expansion, increased turnover, and market share gains.
The success of the Incas endured as long as they were successful in reconciling the individual interests of the powerful with those of other stakeholders in the ever more complex system and in taming the destructive forces that worked from within. However, the growth momentum which was generated by this carefully managed balance of power did not last forever. Seemingly small changes led first to destabilization before finally ushering in the Incas’ ultimate demise.
Putting aside for a moment any attempts to relate these directly to business, we can recognize a number of system laws that appear to have stood the test of centuries. One of these, it would seem, is that the seeds of failure are inherent in any enduring success, because the responsible leaders become increasingly blind to new and unknown threats. New and emerging technologies can destroy the value of established management practices in a short space of time and necessitate the development of alternative approaches. The excessive egotism and nepotism of a system’s key actors push it into the danger zone and accelerate its decline. Now, all these years later, the distance of centuries creates a clarity that enables us to draw parallels between that time and the present. Today, we are also experiencing radical upheaval—the cavalry and weapons of the Spaniards were the unknown, disruptive technologies at the time of the Incas; for us it is digitization and robotization. Back then, the Spaniards’ techniques of rule and war were the sources of massive uncertainty for the Incas, while for us, it is the loss of continuity and reliability in politics and the accelerating change of social values on both a micro and a macro scale. What’s more, people with excessive ego still exist, as do unnecessary conflicts, nowhere more so than in business.
This book should provide an opportunity for each of us to reassess where we stand. We should review our routines, cease to simply accept established knowledge as a permanent solution, and sharpen our perception of the forces acting inside and outside the system. Only then will we be able to influence the dynamics in our favor and create what we collectively need: a conscious and well-guided transition into a new age.
Prof. Dr. Peter May, Bonn-Bad Godesberg, Germany
The Unexpected Outcome of a Trip to Peru
This book is not about the Incas, but without the Incas, it would never have been written. It’s a book about the rise and fall of organizations and the key factors influencing their successes and failures. It’s about good leadership, honest and perceptive self-management, inspiring visions, high-quality people selection, trustworthy values, credible corporate governance, and organizational focus for long-term survival. It’s also about the mistakes, many of them self-inflicted, that often occur in each of these areas and cause organizations, large and small, to stumble and fall. This book will help you to lead your organization better; it will help you manage yourself better, as well as understand your boss and your colleagues better. Oh, and it will make you think, smile, and maybe even shudder, sometimes all at the same time. But above all, it will help prevent you from falling victim to the illusion of invincibility.
How It All Began…
I don’t often go to Peru on business. In fact, it’s happened just once, but that one trip was enough to light the fire under me to write this book.
When one of my clients—a Swiss company—decided to appoint a new general manager for their subsidiary in Peru, the SVP of international business operations called my office in Germany. “Paul,” the director said. “Would you be Rosa’s coach as she prepares to take over the new position? You’d be her sparring partner, if you will.” Then came the unexpected part of the offer: while most of the coaching would take place either in Zürich or in my
