The Counterintuitive Reason the Biggest Risk of Failure is Success (and How to Stop It)

Most business owners imagine that success occurs in a series of steps. They believe that each new level of success will set them up to then reach the following level. While it’s generally true that you need to build upon previous successes in order advance your business to new heights, what’s often overlooked is that each new achievement also creates counter-productive forces that can cause your business to crumble if you don’t manage them correctly.

The problem is that success can lead to complacency and arrogance. Depending on your business and the personalities of your team members, one or both of these negative side effects of success could become problematic as your business grows. Either way, they cause you to forget what made you successful in the first place, which is how they undermine your future.

Here is a more detailed look at how complacency and arrogance lead to you forget what made you successful, and some ways you can try to prevent it from happening at your company.

Complacency: When a business gets complacent, it starts to cut corners. The company acts as if its track record for success is all it needs to actually achieve success in the future, and that the foundation responsible for driving the company to its current position is no longer important. This may not be intentional, and most often it’s not intentional, but either way that’s how the business begins to behave when it gets complacent.

Unfortunately the following scenario is a common one. A business is looking to hire a consultant or a firm to help them on a project. The consultant delivers an outstanding pitch and proposal, gets the job, and then follows up with a strong first deliverable. But after that things change. The consultant starts to let deadlines slip, and the quality of work starts to deteriorate. It’s like the consultant put all of his or her effort into getting the work, thinking that was the hard part, when the true hard part is not just getting the work but keeping it and not getting complacent.

There are a number of things you can do to avoid becoming complacent. One of them is to make sure the “little things” that are often vitally important to a company’s success are actually documented in its operational procedures. This way, if you or your employees wind up “going through the motions” by thoughtlessly following the company protocol instead of actively trying to over deliver, the critical little things will still get done since they are part of the company’s policies and not left up to chance.

Another thing you can do is find metrics that will alert you to the fact that you may be getting complacent. For example, you could issue quarterly client satisfaction surveys to everyone you work with or send out an email to customers after they purchase from you to get their feedback on your experience. By keeping an eye on these satisfaction scores, you’ll be able to tell if your company is losing its touch and can look for ways to reestablish the foundation that got you where you are today.

Arrogance: Arrogance causes the opposite problem of complacency. Instead of the company acting as if its success is guaranteed and putting in less effort, the company believes that, because it was successful in one area, its success is guaranteed in any other field as well. The company forgets what made it successful by abandoning the core market that it began in and instead chases new markets where the business assumes its success is guaranteed.

Techniques for helping your company avoid a misstep because of arrogance are somewhat more difficult to explain. After all, industries are constantly evolving so your company has to go through some type of change in order to keep from falling behind the times.

When a company makes a drastic change to keep from failing, the term “pivot” is commonly used in the startup community. If a company that is not turning a profit takes a smaller part of its business that has been having success despite the overall failing of the company and separates it from the original business to start a new one, that is called “pivoting.” Some of the most successful startups, like Instagram, have come into existence because of pivots.

A good rule of thumb is that, the larger your company, the slower and more carefully you should change course. With a large company, if you suddenly abandon your current position to enter a new market and it’s the wrong direction, a business that was once generating substantial profits falls apart disappears. In contrast, if a startup fails (which they do all the time) it means that something about the business was so out of line with the market’s needs that it couldn’t turn a profit. In this case, because the business doesn’t have any success to begin with, it’s not risking anything to change direction. If the new approach fails, then that was where the company was headed anyway so there’s no harm in trying something new.

So how does a large business prevent itself from being too slow to change and allowing a startup to disrupt their industry and take a majority of their market share? That’s simple — invest in as many “possible futures” as you can.

There is a great story about General Motors investing $100 million in a new type of motor that turned to be flawed and would never work. Many people thought this was a waste, but the people at GM looked at it differently. What they saw was a $100 million insurance policy to protect a multi-billion dollar business.

If that engine technology did turn out to be the future of the automotive industry, then GM would own the rights and be able to ensure its success for years to come. But they didn’t forget what made them successful and abandon their combustion engine business to adopt this new engine right away either.

The more successful you are, the more you want to keep the core of your business stable while investing and experimenting with as many possible new developments in your field as possible. By having a stake in many possible directions that your industry could head in the future, you help ensure that regardless of where it actually goes you will be in a position to capitalize. And if the industry doesn’t evolve as quickly as expected, then you haven’t forgotten what made you successful, have kept the foundation of your company’s success in tact, and will continue to profit handsomely.

Have you had to overcome organizational complacency or arrogance while growing your business? Tell us how you did it in the comments!