The annals of corporate history are filled with stories of companies that once dominated their industries but fell into decline. The common reasons cited — staying too close to existing customers, a myopic focus on short-term financial performance, and an inability to adapt business models to disruptive innovation — do not fully explain how the leaders who made these companies successful explain yours. Contact lost.
In this article, we argue that success can lead to failure by hindering learning at both the individual and organizational levels. We all know that learning from mistakes is one of the most important skills in the development of people and companies. Yet surprisingly, learning from success can be even more challenging. To shed light on these challenges, and identify approaches to overcome them, we will draw on our research and the work of other scholars in the field of behavioural decision-making, and focus on three interrelated barriers to learning.
The first is the propensity for what psychologists call fundamental attribution errors. If we are successful, we are likely to conclude that our talents and our current model or strategy are the reasons. We also ignore the role that environmental factors and random events may have played.
The second obstacle is overconfidence: Success increases our confidence in ourselves. Believing in ourselves is a good thing, of course, but too much can lead us to believe that we don’t need to change anything.
The third obstacle is the failure of the problem: the tendency not to systematically investigate the causes of good performance. When leaders and their teams have this syndrome, they are not asking the tough questions that would help them increase their knowledge or change their assumptions about how the world works.