Today I want to introduce the term “trap of success” by
the case of bankruptcy of Eastman Kodak.
“Failure is the mother of success” is a well-known Chinese
saying. However, the idea of “trap of success” argues that success can set the
stage for failure.
Success often leads the growth and growth leads to greater
complexity in business. As this happens, attention shifts away from the
interactions between organisation and the business environment. It is taken for
granted that current relationships will keep successful, and organisation’s attention
is switched to managing the more complex relationships within the organisation.
When organisation’s performance declines, however, managers
may keep adhering to the behaviour that had led success in the past. They pay
attention to “doing things better” and paid poor attention to the potential
benefit of “doing differently” or even “doing different things”. Therefore, the
organisation becomes “learning disabled’. Managers become incapable of looking
outside, reflecting on success and failure, accepting new ideas, and developing
new insights. They may change, but fail to change fast enough to keep pace with
the rate of change in the external environment, and this is the trap of success
that they are falling into.
Kodak used to hold a dominant position in photographic
film industry in the past century. It even developed the first digital camera
in the world. However, due to its slowness in transitioning to the digital
photography, Kodak started its struggle in earning profit in the late 1990s and
filed for bankruptcy protection in the beginning of 2012. Kodak’s story
illustrated the ultimate outcome of the trap of success, which is also called
as the “death spiral”.
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