Well, Game of Thrones is done (no spoilers past season one!).  And while we wait for its three spinoffs (Game of Thrones: Special Victims Unit, The Thrones Take Manhattan, and Joey), we can reflect on the show’s phrase valar morghulis: all men must die.  In fact, part of the appeal of Game of Thrones early on was that anyone could die, especially if they attended a wedding.  Having a brand name (e.g., Sean Bean) did not guarantee existence.

So too is it with institutions.  In 1996, the fifth most valuable company in the world, with revenue of $16 billion, was Eastman Kodak.  In 2016, they had the same revenues, except with an “m” where the “b” in billion was previously  – a three-zero loss.  Sears lasted for 126 years, practically invented the mail order catalog, owned the world’s tallest building, and declared bankruptcy last year.  Whether you grew up on Woolworths, Oldsmobile, Pontiac, Pan Am, and McCall’s; Toys ‘R’ Us, Blockbuster, Jordache, Kmart, Bear Stearns, Compaq, and Enron; or Yahoo!, AOL, Friendster, GeoCities, Theranos, and Blackberry, the truism holds – all brands must die.

I know personally: my car is a Saturn.

Lest you say it is because these companies made poor decisions, surely that’s it for some of them.  But lauded companies also fail.  Looking back at some seminal business studies, Good to Great and In Search of Excellence companies did slightly outperform the market post-publication.  But they also include companies like Kodak, Wang Labs, Fannie Mae, Circuit City, and Kmart who either no longer exist or have had significant reversals of fortune.

Could that happen here in the nonprofit sector?  All brands must die.  The sector-wide trend is not our friend.  Lest we think this will affect only smaller brands, the Boy Scouts of America has considered bankruptcy.  In 2015, New York’s Federation Employment and Guidance Service, a $250 million nonprofit, closed leaving 120,000 people scrambling for other assistance.  The venerable Combined Federal Campaign has decreased for the ninth consecutive year.  And while it may trigger more schadenfreude than fear, the NRA is undergoing leadership and financial turmoil that may lead to its demise.

Trust in nonprofits continues to fall.  Only 19% of people say they highly trust charities and only 10% say their trust is growing.  This is not an environment where a popular brand will save you for the long-term.

In fact, the thought that we will-be- here- because- we- have- always- been- here fits neatly into Jim Collins’ How the Mighty Fall’s stage three of decline: Denial of Risk and Peril.  The full five are:

1. Hubris Born of Success
2. Undisciplined Pursuit of More
3. Denial of Risk and Peril
4. Grasping for Salvation
5. Capitulation to Irrelevance or Death

If one or more of these stages feels familiar, the good news is that organizations can and have turned around as late as stage four.  Collins talks about the example of Xerox, which had $19 billion in debt and $100 million in cash at one point.  The new CEO, who had been at Xerox over a quarter century, went back to basics, cutting $2.5 billion out of their cost structure of underperforming, non-core efforts.

Those cuts weren’t in R&D, which increased as a percentage of sales.  The goal was to make tough cost cuts and investment in the long-term.  When times were toughest, Xerox looked at the explore v exploit continuum and realized that they had to continue to explore if they wanted to be around for the next decades.  This was part of disciplined leadership focused on core mission that helped them and other companies like Nordstrom and Nucor come out of chaos poised for more success.

So too let it be with us.

Nick