Success WILL Lead to Failure, unless...
No, the title is not a typo, and I won't bite my tongue about it. It is a fact of life, and most individuals and organizations alike fall in the “Success” trap; complacency.
Organizational Complacency is a business challenge that is almost inevitable to happen to any experienced and successful organization. It is not considered a personality flaw, but rather a collective feeling of pride and narcissism that is a direct result of repetitive successful tasks, which naturally takes place due to operational perfection developed over time. It is simply taking success for granted.
The dangerous effect of a complacent organization is that it prevents the leadership from moving beyond their status quo, which creates a massive organizational inertia. A paper released by the Stanford Graduate School of Business with the title: “Structural Inertia and Organizational Change Revisited III: The Evolution of Organizational Inertia” in 2002 defines organizational inertia as “a persistent organizational resistance to changing architectural features”. Logically, with inertia comes resistance to change.
In changing times and dynamic environments, organizational adaptation is the only theory that can help companies be efficiently growing into success. Turbulent periods can negatively affect organizations that are continuously less adaptive, if not on the short run then definitely in the longer run. The keyword here is being adaptive, however not passively accepting change only to survive, but rather considering adaptation in an active manner, so an organization can navigate through change in an innovative and effective way rather than merely coping with it, turning change into opportunity.
If companies at this age are not agile at learning how to innovate, they will be very prone to failure. Scott Cook, the chairman of Intuit, said, “It is only a failure if we fail to get the learning” pointing at being adaptive. Contrary to the legacy view of industries, the structure is no more based on few rivals competing in a stable market and simply managing suppliers and customers; it is now a very complex structure which has interdependent ecosystem of organizations, for instance Samsung is the main supplier for the internal parts of the iPhone to Apple, and the main competitor in the smart phone arena at the same time. Nokia relied on experience, market share and economies as their success factor, but Apple in record time stole the leadership. Stephen Elop, Nokia’s former CEO, said “Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem” pointing at the change in the dynamics of the game and sensing change in the out of the ordinary methods. Working in permanent silos and rigid functions as opposed to free communication and matrix modularity will definitely lead to making the company less adaptive, and doomed to failure.
So, success leads to complacency, complacency leads to inertia, inertia leads to less adaptation, less adaptation leads to failure. Does this mean success will lead to failure? Yes, if you don’t break this chain from the beginning and take success for granted. If only I can get a dollar for every time I hear “we are not a technology company” or “this is not what my customers want” or "we have been doing this for years" or "if it's not broken, don't fix it"... Try and fail, then learn from failing, then apply the learning, and finally close the loop by making sure you never fail again. It was not competition that put Kodak out of business, it was their complacency.
