
Think about the city in which you live. Think about your country, your company or your family. Now jump in your Marty McFly time machine, rev up your flux compaciter and travel back 100 years. You'll notice that there is nearly 100% turnover in your city, country, company and family. The institutional names may be the same, but the people representing those names are completely different. This is really quite amazing if you think about it. The most successful families, companies, cities and countries over the last 100 years have maintained their success despite turning over their "management" at least 1-2 times. For example, United States founding fathers, Ben Franklin, George Washington, John Adams, Thomas Jefferson and James Madison amongst others have all been dead 200 plus years yet we continue to be successful under the U.S. banner.
We know to some extent that success breeds success. Children coming from wealthy households are much more likely to earn above average incomes than children from underpriviledged households. This is due to a variety of reasons; education, experiences, development and environment to name a few. So if my great grandpa, whom I've never met was wealthy, I then have a better than average shot of being wealthy myself. Okay, maybe heredity then plays a role. However, heredity can't explain the continuned success of companies, cities and countries. Members of the U.S. Congress have never met James Madison or Abraham Lincoln, yet the United States continues to see success. Out of the 8+ million people living in New York City, not one inhabited that city in 1900. Yet the city continues to be thriving and strong. Which 007 do you prefer, Sean Connery, Timmoth Dalton, Pierce Broznan or Daniel Craig? Doesn't matter, the success continues.
My question is at what point does success stop breeding success and start breeding apathy? Surely decadence and fortune can bring lethary - this is why salespeople are compensated on commision as opposed to high based salaries. We know that "fat cats don't hunt." As I read through historical examples on both a macro and micro level I began to see patterns of success beginning to give way to oppulence and ultimately failure. Let's start at a macro level and work our way backwards.
The Roman Empire dominated much of the eastern world for centuries. They ruthlessly expanded their territory through brute military force which necesitated increased taxation to lay the infrastructure of a large republic. That said, the sheer scalability of Rome could not divert its inevitable collapse. Rome experienced tremendous growth and success for hundreds of years through many generations. Success bread success for what seemed would be an eternity, but that success came to an end. Why?
Philosopher Glub Pasha studied the rise and fall of many of the worlds empires. He noticed that each followed a similar life cycle:
1. The age of outburst (pioneers)
2. The age of conquests (expansion)
3. The age of commerce (economic development)
4. The age of affluence
5. The age of intellect
6. The age of decadence
7. The age of collapse
Some of these stages are self explanatory. Each preceeding stage inevitably overlaps and leads to the next. Post pioneering, conquests of territory take place either through force (Rome) or through commerce (Louisiana Purchase). Ultimately, this leads us into the commerce stage where less emphasis is put on military and geographic expansion and more focus is directed at econmic growth. As our commerce focused world yields affluence, we begin putting up barriers to protect our wealth; note the Roman Emperors Hadians Wall, the Great Wall of China, even the Maginot line of 20th century France. These barriers allow the focus to remain internal where powerful empires then assemble universities to stimulate the minds of their people. The growth in intellect ultimately leads to the questioning of how and why the empire has reached such heights. People begin to reject their foundational values and morals as the age of decadence begins. People begin worshipping false Gods; celebrities, athletes, political leaders as opposed to religious Gods or military and business leaders of the past. The moral decay, brought on by oppulence, greed and comfort ultimately lead to apathy and thus collapse.
We know to some extent that success breeds success. Children coming from wealthy households are much more likely to earn above average incomes than children from underpriviledged households. This is due to a variety of reasons; education, experiences, development and environment to name a few. So if my great grandpa, whom I've never met was wealthy, I then have a better than average shot of being wealthy myself. Okay, maybe heredity then plays a role. However, heredity can't explain the continuned success of companies, cities and countries. Members of the U.S. Congress have never met James Madison or Abraham Lincoln, yet the United States continues to see success. Out of the 8+ million people living in New York City, not one inhabited that city in 1900. Yet the city continues to be thriving and strong. Which 007 do you prefer, Sean Connery, Timmoth Dalton, Pierce Broznan or Daniel Craig? Doesn't matter, the success continues.
My question is at what point does success stop breeding success and start breeding apathy? Surely decadence and fortune can bring lethary - this is why salespeople are compensated on commision as opposed to high based salaries. We know that "fat cats don't hunt." As I read through historical examples on both a macro and micro level I began to see patterns of success beginning to give way to oppulence and ultimately failure. Let's start at a macro level and work our way backwards.
The Roman Empire dominated much of the eastern world for centuries. They ruthlessly expanded their territory through brute military force which necesitated increased taxation to lay the infrastructure of a large republic. That said, the sheer scalability of Rome could not divert its inevitable collapse. Rome experienced tremendous growth and success for hundreds of years through many generations. Success bread success for what seemed would be an eternity, but that success came to an end. Why?
Philosopher Glub Pasha studied the rise and fall of many of the worlds empires. He noticed that each followed a similar life cycle:
1. The age of outburst (pioneers)
2. The age of conquests (expansion)
3. The age of commerce (economic development)
4. The age of affluence
5. The age of intellect
6. The age of decadence
7. The age of collapse
Some of these stages are self explanatory. Each preceeding stage inevitably overlaps and leads to the next. Post pioneering, conquests of territory take place either through force (Rome) or through commerce (Louisiana Purchase). Ultimately, this leads us into the commerce stage where less emphasis is put on military and geographic expansion and more focus is directed at econmic growth. As our commerce focused world yields affluence, we begin putting up barriers to protect our wealth; note the Roman Emperors Hadians Wall, the Great Wall of China, even the Maginot line of 20th century France. These barriers allow the focus to remain internal where powerful empires then assemble universities to stimulate the minds of their people. The growth in intellect ultimately leads to the questioning of how and why the empire has reached such heights. People begin to reject their foundational values and morals as the age of decadence begins. People begin worshipping false Gods; celebrities, athletes, political leaders as opposed to religious Gods or military and business leaders of the past. The moral decay, brought on by oppulence, greed and comfort ultimately lead to apathy and thus collapse.
As the generations turn over and wealth, comfort and decadence become a right as opposed to a priviledge the empire begins to fall. There seems to be a point of dimishing returns. Where is the U.S. right now? That may be the subject for another blog. Let's continue the analogy.
The Roman Empire story is essentially retold in the form of Detroit, Michigan albeit with a shorter life span. Detroit is a city who rose to power in the early part of the 20th century through economic expansion brought about by the demand of military goods. Detroit prospered by manufacturing goods for World War I and World War II. The next generation in Detroit evolved (age of commerce) into the automobile manufacturing capital of the world. The wealth in Detroit continued to grow. Detroit's next generation, the grand children of the successful military manufacturers grew apathetic toward innovation and ingenuity. As process improvement took hold in the business world (TQM, Lean, Six Sigma), Detroit was passed by the speeding German and Japaneese cars that were lower cost and higher quality. The city of Detroit has still not recovered and likely never will see the glory days of the past. An American industry and city fell on the laurels of their past.

This evolution has been seen countless times within companies. In the 1950's the Fortune 100 list was populated with giants like US Steel, Easmark and Union Carbide. Companies like IBM have been a victim of what we call "creative destruction." What happens in these organizations who saw continued success under many generations? The book "Innovators Dilemma" offers some insight as to why many of these monstrous organizations fail. As success continues, large organizations invest in "sustaining" technologies or advancements. Many of these advancements don't actually add value to the product because consumers are unaffected by them. For example, at a certain point you don't notice the processing speed of your computer increasing. Likewise, at a certain point additional computer storage is no longer of benefit for you (my Ipod can hold 20,000 songs- I own about 5000). In the golf world, you don't notice that a carbon driver head is slightly more sturdy than a titanium head. Yet, the longstanding successful organizations innovate these changes and try to charge a premium for them (age of affluence). This opens the door for what "The Innovators Dilemma" dubs "disruptive technologies." These products, or technologies are introduced to the market as a cheaper, easier and more consumer friendly alternative. Think about the personal computers from Apple and Dell that helped make IBM obsolete. Disruptive products or technologies have slayed many great companies of the past. It was their comfort in success that lead to a culture apathy in innovation which manifested itself collapse.
How many generations of extreme success within a family does it take bring about a sense of entitlement? The old wives tale is that the third generation generally screws up a successful family business. One of my favorite new TV shows starring Will Arnett is called "Running Wilde," a story of a rich spoiled son of an oil executive who lives a life of luxury and ignorance. He is the perfect example of what generations of continued oppulence and success can do to a persons internal drive. Should we have expected the fall of Paris Hilton by making her analogous the Roman Empire? I think there is truth in that.

I've always said if it happens once, its an anomaly - if it happens twice (or repeatedly) its a pattern. The story of Rome, Detroit, IBM, US Steel and the ficticious "Wilde Oil," are stories of human behavior. People, families, companies, cities, countries and empires rise to power and prominance. At some point, the values that helped them to reach elite levels gives way to contentment, lethargy, entitlement and apathy all of which precipitates the decline. History may say that arming yourself with this information will do little to deviate the impending outcome. It is a cycle perpetuated by our biological brain waves. I refuse to believe that to be the case.
Sure, 100 years from now my company will have an entirely new workforce most of whom will probably never have heard of me. The U.S. population will be between 300-500 million people, none of which probably are alive today. My immediate family will be lead by my unborn grandson who will likely have kids of his own trying to make their own mark on the world. Turnover happens. It is the connective tissue between generations, leadership, countries etc that determines whether success breeds success or ultimately failure.
"Empires" blinded by perpetual success are eventually exposed and left naked in the cold.