5 things companies need to watch out for to avoid failure

From Sony to Microsoft, Adidas to Alcoa, and Billabong to Lego, many companies have lost their mojo at one time or another. The question is why some companies manage to avoid failure. 

One researcher has tracked 500 brands and organisations over the past five years in an effort to understand why some maintain their edge and avoid failure, while others fall behind. Over the course of this close study, five common factors emerged as contributors to the demise of almost every iconic business, brand, institution or idea

1. The intoxication of success

In the late 1980s, senior vice-president of Bank of America, K. Shelly Porges, observed, “The greatest challenge we have as we become successful is not to rest on our laurels – never feel like we’ve done it. The minute you feel like you’ve done it, that’s the beginning of the end.”

The pages of business history suggest that Porges observation is right on the money. Success can be a dangerous thing. It tends to erode a healthy appetite for invention and innovation. Success creates a sense of satisfaction with the status quo and spurs complacency, which dulls our motivation to grow and to keep learning.

2. The tyranny of tradition

Things around us are changing faster than ever before, and we must run faster and faster just to keep up. While we might naturally be creatures of habit, those who are committed to building and maintaining momentum must resist every urge to get stuck in patterns and routines from the past. After all, what has served us well yesterday might prove to be a shackle tomorrow.

3. The baggage of bureaucracy

Red tape, over-regulation and bureaucracy are the unholy trinity of inefficiency. In order to maintain momentum, and avoid failure in the long term, organisations need to engage in ruthless pruning of red tape. This might be unpopular, but it’s necessary to achieve long-term agility, responsiveness and momentum.

4. The fatigue of monotony

Most businesses and individuals start off with an inspiring vision for the future. But over time, as things settle into a routine, sober realism begins to replace optimism. The inspiring ‘big picture’ gets crowded out and lethargy, despondency and numbing monotony become the default. Naturally, there are always going to be days and seasons where we feel a bit dry and uninspired. However, when this becomes the norm – watch out. Purposeless productivity is soul destroying, and emotionless motion is exhausting.

5. The seduction of immediacy

In our modern ‘seize the day’ age, where the pressing concerns of the current quarter, financial year or funding cycle can dominate our thoughts, it is critical that leaders avoid short-term thinking. It’s an essential mindset to adopt in order to avoid failure. Momentum is never an overnight thing; it takes time to build, whether we like it or not. You can try and shortcut it, but all you’ll do is shortchange yourself in the long run.

Momentum is a powerful force to guard and preserve at all costs – once it is lost and working against you, turning things around can be an enormous uphill battle. Beware of these five common traps and you’ll be well on your way maintaining a healthy mojo for years to come.