Sometimes success, too much success over a period of time is dangerous. We see so much of this now, with the former “darlings” of the VC/PE world. We see similar things with many of the largest, “most successful” organizations, the high performers of Wall Street, NASDAQ, and other global markets
Suddenly, these “successful” organizations start to falter. It may be difficult to recognize. Many continue to be “successful,” but not as successful as in the past. They aren’t scaling or growing at the same rate. Profitability may start to decline, competitors start to catch up, even in some areas overtake them.
Too often, we are too late in recognizing, “What got us here won’t get us to where we need to/want to go!”
What causes is this to happen? How can very successful individuals and organizations fail in such surprising ways?
There are a few categories of reasons.
Sometimes, it’s a fundamental and unanticipated disruption of markets, the economy, or other factor way outside an individual’s or organization’s control. Perhaps, a natural event that destroys all the facilities of an organization, making it impossible for them to recover. These are rare, and, interestingly, very high performing organizations tend to recover from these–even if it takes time.
The two issues I see contributing to this failure tend to be hubris and/or complacency.
Hubris is what arises when an organization achieves rapid levels of success. This generates a feeling they are invincible or superior to anyone or any other organization. These organizations tend to think of themselves as “Masters of their Universe.” As a result, they are blind to the possibility there may be a different way or that things may have changed. The markets are littered with the carcasses of formerly great organizations driven by hubris.
Complacency means we stop paying attention. These individuals/organizations keep doing what they’ve always done, often with the reasoning, “This is what made us successful, why wouldn’t we keep doing it?” And too often, when they look around at others or their competitors, who may be similarly complacent and they become collectively blind.
And, too often, without knowing it, we become prisoners of our own experience. Our benchmarking and continuous improvement efforts focus on looking at ourselves and organizations like us. If we are in the SaaS world, we look at other SaaS companies, copying and emulating each other–and soon we are all doing the same things. Or in professional services, or financial services, or……. We don’t look in other places for ideas on how we might change, adapt, innovate.
I seldom see people leveraging time tested tools to fight complacency (hubris is tougher). We have to be constantly attentive and challenging ourselves. Andy Grove’s mantra, “Only The Paranoid Survive” is helpful in fighting complacency. For decades there have been tools like “red teaming,” “scenario planning,” continuous improvement. We must continually look at innovation, but not just in new products and services. We must innovate in our go to customer strategies, in how we get work done within our own organizations, how we leverage ecosystems to increase our value to the customer, how we think differently about engaging our customers and create value with them.
Nothing in this world is forever. Part of the joy of business and selling is the constant change and innovation. Regardless how successful we may have been, we have to constantly improve and change.