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The success trap (and some ideas how to get out of it)
misunderstood the emergence of personal computers? How come
Harley-Davidson was all but wiped out of the market by tiny
Japanese entrants like Honda, who made very different motor-
cycles? How come the once dominant Firestone completely
misread the emergence of radial tires and went down the drain?
Laura Ashley, Atari, Digital Equipment, Tupperware, Revlon: the
list goes on and on of once dominant companies that at some
point seem to lose the plot and get into severe trouble.
Some of them recover, some of them go under, arrogantly
assuming that what they always had been doing – and what had
brought them so much success – would always work, only to nd
out, the hard way, and often too late, that they were wrong, and
the world did not need them any longer.
Where in the rst chapter of this book I told you about the
various determinants of many big business decisions, in this
chapter I want to zoom in to one specic yet very inuential
one: success. The experience of success is a huge determinant
of many a rm’s subsequent chosen course of action. But, as
the success trap illustrates, it is not always a positive one. Here
I’ll expose what happens in organizations that fall into the
success trap. I’d also like to tell you about creosote bushes,
give you the analogy of a major operation in World War II,
and share some insights from a Nobel Prize-winning line of
experiments.
In the second part of the chapter, I use these insights to explain
what companies may be able to do to escape a crisis, whether the
crisis is limited to the organization itself, its industry, or when it
concerns a global downturn. I want to tackle the harrowing yet
pivotal question, “Is your company brave enough to survive?”
The Icarus paradox
The success trap is also known as the “Icarus paradox” in business.
Icarus was a gure in Greek mythology. Together with his father,
Daedalus, he was held prisoner in a labyrinth, so obviously had
trouble getting out (after all, it was a labyrinth!). And when they
Business Exposed30
nally managed to nd their way out, they found themselves
stuck on an island. Then, Daedalus had a bright idea. He started
collecting feathers that had dropped from the sky (I can only
assume from over-ying birds, but anything can happen in Greek
mythology) and glued them onto some twigs using beeswax. He
made two pairs of wings.
And he told his son, “Icarus, let’s y out of here!” Initially,
Icarus thought, “Yeah old guy, like that’s going to work; a
pair of wings!” But Daedalus said, “Believe me son, they will
work, just try them”. And Icarus did. He put on the wings and,
cautiously, started apping his arms. Much to his surprise, he
took off!
Icarus was ying, initially quite cautiously but gradually he
grew more condent and started to enjoy his ight. He started
ying higher and higher. His father, Daedalus, shouted, “Don’t
go too high!” but Icarus didn’t hear him (or, more likely for an
adolescent, ignored him) and went even higher. Until he started
ying too close to the sun . . . The beeswax melted, the feathers
popped out, and Icarus fell to earth: dead (the Greeks are no
wimps in their mythology).
This is why we call it the Icarus paradox; the same thing that had
made him successful, that had helped him escape the prison and
y, is what led to his downfall. In his overcondence he had
become blind to the dangers of ying too close to the sun.
And this is what we often see very successful companies do
too; they become very good and successful doing one particular
thing, but this also makes them overcondent and blind to the
dangers that new developments in their business pose to them,
which ultimately may lead to their downfall.
But what causes it? There are various parts to the explanation
but one of them pertains to how the top managers of those
very successful companies perceive the changes in their business
environment. In a way, it is good old tunnel vision, for example
in terms of how top managers interpret the changes in their
business environment.
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