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 office near Cologne, he suggested that I travel to Peru toward the end of the process to run a workshop for Rosa and her new leadership team.
One evening, about three weeks later, I found myself sitting around a campfire with two friends who’d both lived and worked in Latin America for a number of years. I told them about my recent phone call, and their reaction was highly enthusiastic.
“Peru!” the first said. “Wow! It’s one of my favorite countries in the world. Oh, the food, the culture, the people—the Incas!”
“You’ve got to see this, you’ve got see that, you must go here, you must go there,” the other exclaimed. “And, Paul,” he continued, “above all, what you absolutely must not do is spend three days in the Lima Hilton and then come straight home again!”
“Hold your horses, guys,” I said. “I don’t speak a word of Spanish, and I’m not one for adventuresome holidays. And if I did take a trip around Peru, I would never consider doing it on my own. I’d want to do it with my wife, or with some good friends, or—”
“We’ll come with you!” they interrupted.
And that was that. On a sunny November afternoon in Lima, six months later, I walked out of the hotel after the workshop and a mini-bus was waiting for me across the road. The man behind the wheel was a local—one of our guides. In the passenger seats were six tourists with familiar, smiling faces, including the two friends from the campfire. And one of them was Andreas Krebs.
We thought we’d properly researched the highly developed Inca culture of the fifteenth and sixteenth centuries. We were wrong: In the breath-taking landscape at 3,500 meters above sea level, what we gathered from our Peruvian guides made us pause to think much further. In Tipón, located about eighteen miles northeast of Cuzco, and assumed to be a former agricultural research center of the Incas, we learned more about how, in just a hundred years, the Incas created an empire stretching almost five thousand kilometers along the Andes, from what is now Ecuador in the north to present-day Chile in the south. They efficiently organized and held together a kingdom that was home to some two hundred ethnic groups; they created surpluses through clever agricultural techniques, established food storage facilities and cared for their