Book Review: How The Mighty Fall

Jim Collins set out to write an article on how successful companies fail. For some reason, probably commercial, he decided to turn it into a short book.

He should have stuck with the article idea.

While the ideas presented are certainly interesting, there is nowhere near enough material to justify R290. Almost half the book is “appendices” covering, very weakly, some of the victims of the financial crisis and providing background data and information that gave rise to the conclusions reached.

I usually quite like the idea of having all the information available so the conclusions don’t have to be taken on blind faith. I just don’t see why these couldn’t be provided for free on the web or something.

I was also very disappointed to not see a greater distinction drawn between failure of large, geared financial services firms that take on too much, poorly understood risk and other enterprises with very different reasons for failure. I’m starting to doubt how much Jim Collins even knows about financial services firms and what led to the recent troubles!

Read it for sure, but read it quickly and make sure you’re reading a borrowed copy from some mug like me who actually paid full-book-price for a long article.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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