I have spent two decades observing the same pattern.
Unstoppable companies. Brilliant leaders. Continuous double- or triple-digit growth. Expansion into new areas. Strong visibility on social media and in the press.
Often it takes just one shock. Or for what is hidden to come to light. For the fall to begin.
The silent enemy is already at work. It does not appear in financial statements or metrics, yet it destroys from within every decision. And it lays the groundwork for an irreversible situation.
Ego usually awakens in moments of "success." When sales grow, when recognition arrives, when the market applauds.
It is natural. It is human. And it is not as intuitive as we imagine. Nor as detectable.
We stop listening. We spend less time learning. Speed begins to outpace validation. What we once questioned becomes certainty. There is no time--we need to scale. Opportunities multiply.
I consider myself an expert in crisis.
Many companies call on me to accompany them when they realize that scaling has turned into free fall.
And in a great number of cases, it is not the business model that fails, nor the execution, nor the product. It is the capacity to accept and manage uncomfortable information.
Warnings were ignored. Critical voices were dismissed.
Bad decisions multiplied as focus was lost: overinvestment, expansion without a solid base, projects defended more out of desire or obligation to "scale" and "seize opportunities" than out of sound business logic.
Ego transforms necessary lessons into repeated mistakes.
It does not only damage businesses. It breaks bonds. It fractures partnerships through the need to "be right" (or to defend unsustainable decisions). It corrodes culture.
Valuable teams are the first to perceive it. And the first to leave.
Or worse, they buy into the narrative and multiply the ego. They embrace the story of invincibility and prop up the founder.
When social capital--that network of trust and collaboration that sustains every business--is broken, no amount of financial capital can compensate.
In August, we worked at Scalabl Books on How the Mighty Fall by Jim Collins.
This book provides a brilliant framework for describing the phenomenon.
Collins describes five stages of organizational decline. And although he speaks of large corporations, any of us can recognize ourselves in them.
1. Hubris born of success. Everything starts here. Right when the ego begins to feed itself: achievements become a sense of invincibility. We stop asking "why did our strategy work" and take for granted that it is the exclusive result of our decisions or, worse, our "genius." I see this in many entrepreneurs who, after their first success, once the money starts flowing, stop validating and cling to intuition. But also in established business owners. It is far stronger in entrepreneurs with a repeatable model, who assume it will repeat forever.
2. Undisciplined pursuit of more. Ego demands expansion. More markets, more products, more offices, more people. But as Collins warns, it is not growth that destroys--it is the lack of discipline in that growth. Not only multinationals; many SME owners fall into this trap: they decide to open multiple branches following a rigid plan, expand the factory projecting linear or exponential growth, multiply product launches, "strengthen" the structure to professionalize in anticipation of future growth. The Packard Law that Collins presents is unforgiving: no company can grow faster than its ability to develop people capable of sustaining that growth.
3. Denial of risk and danger. When problems emerge, ego disguises them. Numbers are reinterpreted optimistically, external culprits are sought, resources are wagered on distraction projects. A narrative of invulnerability is built to make it easier to ignore them. And a culture of not questioning. It is self-deception in action. Collins mentions the classic case of Motorola with Iridium, rigidly following the plan, ignoring market evolution and the fact that their value proposition no longer made sense.
4. Grasping for salvation (searching for a hero). When the decline is evident, ego panics. "Silver bullets" appear: hiring the "savior CEO," betting everything on a miracle product, merging without criteria, acquiring a company in another industry. Anything but returning to the core, facing the real problem, beginning to make a continuous stream of sound decisions. It is trying to escape bankruptcy by playing roulette. Wanting to recover in a single hand. Corporations launch frantic reorganizations to "show action" while losing their essence. Or SMEs deepen the fall amid family arguments over which desperate move to pursue. An interesting point is that Collins clarifies that recovery is still possible up to this stage. By returning to his concept of the flywheel (a wheel of inertia, turned gradually with small continuous decisions in a clear strategic direction, first with enormous resistance, and then accelerating with its own generated energy).
5. Capitulation to irrelevance or death. The final stage arrives when neither energy nor resources remain. The organization disappears, is sold, or subsists without relevance. And although it may seem extreme, I have seen small businesses reach that point far sooner than they imagined.
If what you are thinking is: I practice humility, others matter to me, I do not think I have an ego problem, I simply rely on the data from reality about what works--let me share something very important:
Ego is not solely about placing yourself at the center or feeling more important than others.
With the global expansion of Scalabl in 2018, I experienced firsthand the stage of "hubris born of success." We opened in 20 countries in person within 2 years and were preparing to reach 50 in the third. We were enormously profitable. The model was bulletproof. I was applying our own methodology, focused on reducing risk.
Business literature tends to take for granted that you should accelerate once the model scales and repeats profitably. But it was written for another era--it does not anticipate major shocks or disruptions.
Two major partnership crises and a pandemic showed me that expansion and growth carry enormous risks.
An important insight: Hubris, as Jim Collins calls it in English, is better translated as excess rather than arrogance. It is essential to keep validating always and never lose focus. To work with resilient or antifragile business and operating models.
I have dedicated myself to developing that new theory ever since.
Collins's book confirms that the fall is not due to unavoidable external factors, but to internal, human, avoidable decisions.
Ego can mislead us, especially at our best moment. It may be doing so right now. It can devastate what we have built. And what matters most to us beyond the company.
