"Success is a lousy teacher..."

To the ancient Greeks, hubris referred to extreme pride, ambition, and over-confidence that was so great that it often offended the gods.  In the usual scenario, an overabundance of pride led a hero (think of the greek hero Achilles as one example) to attempt something beyond what mere mortals were capable of achieving and assuming near god-like status as a result .  Of course, this would inevitably offend the gods and lead to a sharp rebuke or punishment and the hero's eventual downfall (see the ancient Proverb, "Pride goeth before destruction").  It's no mere coincidence that pride (hubris) was one of the so-called Seven deadly sins of antiquity, and there are numerous examples of hubris still today (see, for example, the Dunning-Kruger effect or the Icarus complex which describe personality theories involving hubris).


As it turns out, it's not just individuals who are subject to overconfidence, pride, and over-ambition - organizations are also at risk for hubris.  One of the earliest examples of organizational hubris comes from a biblical story in the Old Testament (the book of Genesis, to be more precise) often called the Tower of Babel.  Apparently, a few generations after the Great Flood (see the story of Noah's Ark), all of humanity was united and spoke a single language.  Things were going fairly well for us back then, as you can imagine.  After migrating en masse, all of the world's humans settled in the land of Shinar and decided to build a city and a tower that would be tall enough to reach heaven.  God, seeing how quickly the tower was going up, made it so that the humans couldn't understand each other and scattered them around the world.  The story, which can be found in a number of different religions and cultures, is used to explain why humans speak different languages, but it is also a great example of organizational hubris.  Humans became so overconfident that they felt they could build a tower to reach the heavens!


There are other well-known examples of organizational hubris.  In fact, the author and management guru Jim Collins wrote a book called How the Mighty Fall...and Why Some Companies Never Give In, which is full of anecdotes about companies that led their industries and basically blew it.  Collins proposed five stages of organizational decline (perhaps borrowed from Elisabeth Kübler-Ross's five stages of grief):


1. Hubris born of success
2. Undisciplined pursuit of more
3. Denial of risk and peril
4. Grasping for salvation
5. Capitulation to irrevelance or death


See that?  The first stage of organizational decline is hubris.  Here, an organization becomes so successful, often reaching the top of their industry, that they fall prey to overconfidence and over-ambition.  It's not just that the rest on their laurels, as if to say, "We've always done it this way, which has worked very well for us in the past, obviously, because how else did we become so successful?"  Instead, the organization becomes arrogant - "We are successful because we are entitled to be successful."  "We are the best - we can do anything!"  "Nobody is going to beat us - we are that good."  Bill Gates once said, "Success is a lousy teacher.  It seduces smart people into thinking they can't lose.  And it's an unreliable guide to the future."


Just consider the story of the legendary department store chain, Sears, Roebuck, and Company.  I can remember shopping at Sears all the time during my childhood - either through the catalog (especially the one that came out every Christmas with all of the toys - known as the "Wish Book") or at the local store that was one of the anchor stores at the shopping mall that was a couple of miles down the street from our house.  Sears started out in 1893 as a mail ordering catalog company founded by Richard Warren Sears and Alvah Curtis Roebuck.  It was not until later, in 1925, that the company began opening retail stores as well.  The name "Sears" became synonymous (at least in my house growing up) with the place to purchase appliances (e.g., Kenmore appliances) and tools (e.g., Craftsman tools).  But Sears was so much more than just appliances and tools.  Just consider some of the name brands that either started out at Sears or were once part of the Sears company - Allstate Insurance, DieHard batteries, Discover Card Services, Dean Witter Reynolds Financial Services, Coldwell Banker, Land's End, just to name a few. 



Sears peaked in the early 1970's, after which competition with other retailers such as Walmart, Best Buy, Home Depot, and later Amazon.  The long, slow decline of Sears continued on until it was purchased by Kmart Holdings (another retail chain experiencing its own difficulties) in 2004.  The Kmart acquisition never really took off though, and the decline continued as Sears closed retail stores, sold off different brands and services, and eventually filed for bankruptcy in October, 2018.  It's a shadow of its former self.  The company is no longer relevant. 


There have been a number of different explanations why Sears ultimately failed.  But I think Sears' long slow decline began with organizational hubris.  Just take a look at the Collin's five stages of organizational decline, with Sears in mind:


1. Hubris born of success: Sears was once the largest retailer in America, and many experts felt that they were invincible.  Sears failed to change with the times ("What got us here is what will get us to the future!").  Even after they lost the title of America's favorite retailer to Walmart in the 1990's, Sears failed to recognize what was happening.


2. Undisciplined pursuit of more: Remember that Sears started out as a mail-order catalog company.  They eventually opened retail stores too, but they were known for being a retail chain.  So, why did they enter the financial services (Discover Card Services, Dean Witter Reynolds) and real estate industries (Coldwell Banker)?  Again, you have the "We're so great, we can do anything!" syndrome.


3. Denial of risk and peril: Again, Sears didn't get to flummoxed by the fact that Walmart was taking away their business.  They failed to recognize that they were being disrupted.  The company's leaders just didn't think that they could fail, after all, "We are Sears!"


4. Grasping for salvation: Sears eventually filed for bankruptcy and were then bought by Kmart.  At the time, Kmart was struggling too.  So why did the leaders at Sears think that this was going to be their way to climb out of their hole?


5. Capitulation to irrelevance or death:  The last stage of grief is acceptance.  Here, Sears (and Kmart, among many others) were disrupted by Amazon, which drove the proverbial final nail in the coffin (see "Sears could've been Amazon"). 


So, how can organizations avoid falling victims to their own success (see "Organisational Hubris: Are You Blinded By Achievements?")?  Here are a few suggestions.  First, recognize the patterns in disruptive trends.  Look at what other companies are doing - not just your competitors, but also the smaller organizations that are trying to become your competitors.  Second, avoid "deservation", the concept that "we deserve to win because we are great."  Embrace the mentality that "what got you here, may not get you there."  Recognize that there is a certain amount of luck involved with any successful initiative or product launch.  Third, recognize that innovation does not come from past achievements.  Be ready to embrace change.  Get out of your comfort zone.


It's okay to be proud of your achievements, as an individual and as an organization.  But don't be arrogant.  Recognize that there is at times, there is a fine line between failure and success.  It's okay to be confident, but don't be overconfident.  Be open to change.  Looking at past success is rarely the best way to make decisions for the future.