Too many high flyers turn out to be like Icarus. They begin by concentrating on their wings, using them to soar. But then they lose or change concentration and their wings fail them. Here are three classic ways it happens.
I cannot fail. Scott Edmunds was the CEO at Chico’s FAS. He delivered quarter after quarter of growth.
But along the way, Edmunds seemed to get the idea that he could do anything. He started several new businesses. He kept opening stores. He bought land and began construction of a new corporate headquarters.
He stopped paying attention to what worked and started chasing growth. Soon, he told analysts that the company was looking to “clarify our focus.” Soon after that the stock that had traded around $50 per share sank to below $10. Icarus had fallen to earth.
We can make it better. Bob Nardelli had been a superstar at General Electric. He was one of three finalists for the CEO job there.
When he didn’t get it, he was snapped up within days by Home Depot. That company had been the fastest growing company in the US for a decade by following founder Bernie Marcus’ mantra to “love the customer.”
Nardelli and the Home Depot board must have figured that their customers loved them too much to leave. So they set about gutting the very things that had made Home Depot successful as they tried to make it more efficient.
Soon the customers were gone and the shareholders were angry. Nardelli went packing (with a suitcase full of money). Icarus had fallen to earth.
I can make my mark. Ron Allen was the inside star that took over Delta Airlines in 1987. At the time Delta was the premier airline for business travel. It had weathered deregulation in good financial condition. And it had some of the best employee relations in the industry.
But that wasn’t good enough for Allen. He wanted to make his mark on the company.
So he changed just about everything. A decade later, Delta had gone from being the premier airline for business travel, with great employee morale and a solid balance sheet, to being just another struggling airline with labor problems.
Each high flyer failed when they stopped thinking about the wings that had helped them soar. Instead they assumed that those wings would work for them without any attention and they could concentrate on other things. And they paid the price.
So Wally,
What do you attribute this to?
Is it arrogance? A lack of humility? Is it the outside pressure (like a new Free Agent ballplayer signing a gazallion dollar contract trying to do too much) or the internal belief of having to do something new, different better to justify their new role?
I think it’s a combination of things, Skip. For starters, some of this seems to me to be natural human wiring. We’re not wired to pay attention for the long haul. And, we value the new and novel out of proportion to their utility. The result is that we find it exciting to abandon effective, but routine and boring things or simple strategies that work but don’t call attention to themselves.
But there’s also the factors you’re asking about. The Greeks called it hubris and in ancient Greek drama it is always followed by Nemesis. We work hard. We concentrate. We get good results. And then we start believing that those results are our natural right, rather than the result of attention and hard work.