Seduced by Success

About the Author

Robert J. Herbold served as Chief Operating Officer of Microsoft Corp. from 1994 to 2001. Before joining Microsoft, he spent 26 years at Procter & Gamble. Currently, Herbold is the managing director of Herbold Group LLC, a consulting business focused on profitability and operational and marketing issues. His extensive experience in top-tier companies gives him a unique perspective on the pitfalls of success, which he shares in his book, Seduced by Success: How the Best Companies Survive the 9 Traps of Winning.

Main Idea

Seduced by Success explores how companies can fall victim to their own achievements. Herbold identifies nine traps that can ensnare successful organizations, leading them to complacency, mediocrity, and eventual decline. By understanding and avoiding these traps, companies can sustain their success and continue to innovate and grow.

Table of Contents

1. Success Is a Serious Business Vulnerability
2. Trap No. 1: Neglect
3. Trap No. 2: Pride
4. Trap No. 3: Boredom
5. Trap No. 4: Complexity
6. Trap No. 5: Bloat
7. Trap No. 6: Mediocrity
8. Trap No. 7: Lethargy
9. Trap No. 8: Timidity
10. Trap No. 9: Confusion
11. The Key to Continual Success

Success Is a Serious Business Vulnerability

Success can make organizations vulnerable. As companies achieve meaningful levels of success or stability, leaders may feel entitled to continued success. This sense of entitlement can lead to complacency, comfort, and mediocrity. Herbold uses the example of General Motors (GM) to illustrate this point. GM, once a dominant force in the automobile industry, experienced a decline over three decades due to rigid legacy practices and an inability to adapt to changing market conditions.

"Any rigidity by an automobile manufacturer, no matter how large or well established, is severely penalized in the market." - Alfred P. Sloan

This quote highlights the need for flexibility and continuous improvement, even for established leaders.

Trap No. 1: Neglect

Neglect occurs when organizations stick with outdated business models. Herbold emphasizes the importance of constantly challenging your organization to imagine a different world and to create unique advantages. He cites the example of IBM, which faced significant challenges in the early 1990s due to entrenched legacy practices. Under CEO Lou Gerstner, IBM transformed from a computer company into a broader technology and services company by addressing these issues head-on.

"Facing reality and fighting the urge to stick with your old business model can be difficult, but with great leadership, it can be done." - Robert J. Herbold

Gerstner's ability to overhaul IBM's decision-making processes and financial management practices played a crucial role in the company's resurgence. This transformation underscores the importance of regularly reviewing and updating business models to stay relevant in a dynamic market.

Trap No. 2: Pride

Pride can lead to outdated products. Successful companies may become complacent, believing their past achievements are enough to sustain them. Chrysler's merger with Daimler-Benz illustrates this trap. The company struggled until CEO Dieter Zetsche revitalized it by introducing unique, exciting new vehicles like the Chrysler 300 sedan.