chapter
2
The success trap (and some ideas
how to get out of it)
Why good companies go bad
D
id you know that when you take the list of Fortune 100 com-
panies in 1966 (America’s largest companies) and compare
it with the Fortune 100 in 2006, 66 of those companies
don’t even exist anymore? Another 15 still exist but don’t feature
on the list any longer, while a mere 19 of them are still there.
It pertains to this phenomenon we call the the “success trap”;
ample research and statistics show, for a variety of industries, that
very successful rms have trouble staying successful and adapting
to fundamental changes in their business environments (such as
new competitors, different customer demand, radical new technol-
ogies, or business models, and so forth). Over the years, they have
focused on the thing that made them successful (a particular
product, service, production method, etc.) and as a result became
even better at it. Yet, this came at the expense of other products,
processes, and viewpoints, which were considered much less
important and were often discarded. Hence, the company had
become very good at one thing, but one thing only. This is not a
problem unless, of course, your environment changes. It’s just that
most environments have the nasty habit of doing exactly that . . .
Then, the company is caught off-guard, and has trouble adapting
to the altered circumstances. It is partly a cognitive thing. For
example, how come that, in the early 1980s, IBM so dramatically
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