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Three Crises Hiding Inside Growth
Zook and Allen found that about 80% of a company's biggest value swings trace back to one of three internal crises, not external markets. Overload hits fast-growing firms like Norwegian Cruise Line, where Freestyle Cruising outran the systems built to support it. Stall-Out crept into The Home Depot as centralization stripped store managers of authority. Free Fall struck Charles Schwab during the dot-com bust, forcing a replacement of over 70% of top management to survive.
What Founders Do That Managers Forget
Three habits separate companies that keep growing from those that stall. Yonghui Superstores built an insurgent mission around fresh produce sold at prices no legacy grocer could match. At the Oberoi Group, luxury hotel staff solve guest problems on the spot rather than escalating them, embodying a front-line obsession. AB InBev cultivates an owner's mindset, teaching employees to act like restaurant owners who notice the empty table, not waiters who simply deliver orders.
Refounding a Business in Free Fall
When a business model collapses, incremental fixes won't save it—only a refounding will. Charles Schwab replaced over 70% of his leadership team because the people who authored a failing strategy rarely abandon it. Jørgen Vig Knudstorp rescued LEGO by shedding theme parks, clothing lines, and video games to refocus everything on the brick. Kent Thiry turned near-bankrupt Total Renal Care into DaVita by rebuilding its culture around the idea of a shared village.