Success breeds success. Or so people say. It seems logical. The better or more adept that an individual or an organization becomes at a specific task or activity, the easier it should become to repeat the process with increasingly successful outcomes. With repetition comes mastery. And with mastery comes positive outcomes and success. But is this success curve an ever-expanding linear equation or can the curve flatten and pose potential risks to the individual and the organization?
For individuals, we can find empirical data that in fact success does breed success. In a 2014 study led by Stony Brook University(1), researchers found that early success bestowed on individuals produced significant increases in subsequent rates of success, in comparison to the non-recipients of success. However, the study also demonstrated that there was not a proportional relationship between the quantity of initial success and subsequent later success. In other words, there may be a flattening of the yield curve when the factors contributing to success are viewed as an initial investment.
In business, success can be a double-edged sword. Financial success can provide the necessary resources for continued investment. When invested strategically, prior success funds future continued corporate success. But a legacy of corporate success can also contribute to a culture of complacency and a believe that the organization is “too good or too big to fail”. The business landscape is littered with corporate titans thought to be invincible. Eastman Kodak, Pan Am Airways, Motorola, Compaq. I am certain you could easily add another 10-15 names of your own. The industries may differ, the competitive situation and financial dynamics may vary between the examples, but common themes run through all these case studies in epic corporate failure. A corporate strategy of “rinse and repeat” and a belief that the competitive moat was wide enough and deep enough to last forever.
In an article published in the Harvard Business Review, “Why Leaders Don’t Learn from Success”, Francesca Gino and Gary P. Pisano examine how success can breed failure by hindering learning at both the individual and the organizational level(2). The authors identify three barriers to this critical organizational learning:
- Fundamental Attribution Errors – put simply, the belief that success is driven solely by talent, strategy and execution with no room for acknowledging the business environment and pure random good fortune.
- Overconfidence Bias – otherwise known as the “if it ain’t broke, don’t fix it” strategy.
- Failure to Ask Why – think of which sales representative gets asked the hardest questions, the one that made quota or the one that missed quota. Organizations tend to not drill deep into the metrics and factors of successful business results.
Continued success for a business takes true leadership, a culture of empowerment, and a willingness to embrace risk and break things. The most successful organizations are the ones that also have “big ears”. They demonstrate a willingness to listen internally to their employees, outside with their customers and to seek the counsel of third parties for a neutral external perspective.
At Northpoint, we do not believe in a single stand-alone approach to driving sustained and profitable revenue growth. We recommend a focus on the revenue growth value stack. Continuing the momentum is the objective, so that the enterprise is sustainable and strong. This involves an annual process we call GUBA (Goals, Unintended Consequences, Barriers and Assumptions). This model provides a disciplined process and input to help clients reset their objectives each year.
If you are interested in learning more, please contact Northpoint for an initial consultation. We are very interested in your perspective and learning more about your organizational challenges.
1 = A. van de Rijt, S. M. Kang, M. Restivo, A. Patil. Field experiments of success-breeds-success dynamics. Proceedings of the National Academy of Sciences, 2014; 2 = Why Leaders Don’t Learn from Success, Francesca Gino and Gary P. Pisano, Harvard Business Review, April 2011