Paradox Series VI: The Icarus Paradox

The Icarus Paradox. Like me, Conor Neill was inspired by Sahil Bloom’s tweet series about the most powerful paradoxes of life. Neill summarized the Icarus Paradox concisely as: “Icarus crafted wings—but flew too close to the sun, so they melted and he fell to his death. What makes you successful can lead to your downfall. An incumbent achieves success with one thing, but overconfidence blinds them to coming disruption. Beware!”

Danny Miller is credited with the term when he created it for his 1990 book with the same title. Miller’s summary could be summarized with how organizations, such as corporations, small businesses and even hospitality-centric clubs, courses and resorts often find themselves failing, seemingly overnight, “after a period of success, where this failure is brought about by the very elements that led to their initial success.” In other words, their “winning formula” somehow becomes the very thing that holds them back, slows their growth and so on, and becomes like their “toxic formula.”

Wikipedia even has an entry on the Icarus Paradox. In it, one can read, “In many industries, extremely successful businesses often face problems maintaining their success. Of the companies in the 1966 Fortune 100, 66 no longer existed by 2006. Fifteen still existed but were no longer on the list, and only 19 remained on the list.” That is easy math, 19 of 100 or 19% survival rate for the “best of the best” in a 40-year period.

In the same Wiki article linked above, the summary by Danny Miller in a 1992 article, he noted that: “…successful companies tend to fail because of their strengths and past victories, which causes over-confidence and lulls them into complacency. The characteristics that drove their success such as tried-and-true business strategies, dauntless and self-assured management, and the overall combination of all these elements when done in excess may ultimately lead to declining sales and profits and even bankruptcy. This happens as managers make unwise decisions based on past strategies that they mistakenly believe will always be relevant and companies exploit as much as possible the strategies that contributed to their success, concentrate their focus on the products that launched their brand and become blinded to changes in the external business environment.”

With a quick re-read of the last paragraph, we can see that success (which is the outcome from doing the right things, the right way, a bit of luck and timing, etc.) can actually become the “seductress” that leads organizational leaders (e.g. CEOs, boards, owners, presidents, chiefs of ____________, senior managers/directors, etc.) into valleys of organizational self-destruction by encouraging, if not incentivizing the wrong things including: overconfidence, exaggeration, attribution of credit and blame, complacency, and routine.

For the sake of application to the industry we are in, let’s take a look at each of these in greater detail and depth.

1. Overconfidence | Most successful facilities/clubs owe their success to differentiating and unique competitive formula within their given market. As the club or golf course continues to separate itself in the given market it’s in, the ownership/the board/the management naturally and rightly gain confidence in their “winning formula” where they innovated relentlessly. Once they feel confident in their model, the clear tendency is to do the safe thing (including not maintain a proper pricing structure) and focus nearly entirely on “refining and extending the strategies, concepts, programs and even values” that originally propelled their success.
   1. Being innovative, which often comes out of the struggle to find a solution, and other similar activities are ignored if not openly frowned on. This is when we start to hear, “…this is the way we’ve always done it” which is code for “I’m confident and I’m comfortable…don’t push me to do something that will make me uncomfortable or challenge me.”
   2. While it is seemingly clear that many companies and organizations fail as an “inevitable result of companies taking rational risks in the face of uncertain situations,”  the Harvard Business Review (Lovallo & Kahneman) have stated that most of these failures are not due to bad luck and uncertainty, but often due to identifiably flawed decision making. This concept is called the “planning fallacy” where overconfident leaders end up making groupthink-style decisions that, based on their delusional confidence and optimism, end up failing due to overlooked or ignored risks that to others may have seemed obvious and entirely avoidable.
2. Exaggeration | Wikipedia and Miller suggest that: “Humans have a natural tendency to exaggerate their own talents, so many executives believe they are above average in their positive traits and abilities. This is amplified by the tendency to misperceive causes of certain events and attribute success to their abilities when it might have been out of pure luck.”
   1. With this in mind, we can see how each of us could feel like our “success has been earned” or deserved and any “bad beats” we’ve received are someone else’s fault. From an organizational standpoint, this exaggeration tendency will tend to make leaders slow to react or slow to notice clear signs of peril, or situational danger, heading for the organization.
   2. Being slow to react or worse yet, slow to learn or “fail forward,” the hunger to innovate and grow is likely gone so we miss on the opportunity to get better, change direction and grow (and eventually, we get run down or run over by other disruptors who are better at whatever we thought we were the best at (based on exaggeration.)
   3. Similarly, as individuals, we can fall into the trap of “reading our own press clippings”
3. Credit and Blame | Miller similarly suggests that, “People tend to take credit for positive outcomes and attribute negative outcomes to external factors. A study of letters to shareholders in annual reports, for example, found that executives tend to attribute favorable outcomes to factors under their control, like corporate strategy or R&D (research and development) programs. Unfavorable outcomes were more likely to be attributed to uncontrollable external factors like the weather or inflation. People also tend to exaggerate the control we have over events, not considering the role of luck.”
   1. Golf clubs, whether public, private or resort can fall prey to the same issue. When it works, that was “our plan” and we should get the credit. When it doesn’t work, it’s someone or something else’s fault. The biggest issue here is that in both cases, there is a missed opportunity – an opportunity to learn or grow.
   2. When there is a “win” or successful outcome – instead of taking credit, one could ask:
      1. What could we have done differently to make the win better? Or more significant?
      2. Who should we have brought along in the journey? Who do we need to include next time?
      3. When will we need to revisit this success path or strategy?
      4. What did we miss out on, in terms of other opportunities, because we focused here?
   3. When there’s a negative outcome, instead of pointing the finger at some series of events or at someone else, one could ask:
      1. Where did we make flawed assumptions about this plan? Who did we fail to include in the process or fail to “bring along?” Where did we fail in terms of communicating the vision? And many other questions.
4. Complacency | I like this one because it is so direct. Miller wrote: “There are perils associated with following a certain system, even a winning one, for too long. Clear commitments are required for initial success, but these commitments harden with time and ultimately restrict a firm’s ability to adapt when its competitive environment shifts.”
   1. Complacency is the enemy of Nimbleness, Freshness and Responsiveness: Three of my favorite facilities worth highlighting are Roche Harbor Resort, Bandon Dunes and Tacoma Country & Golf Club. Here’s why they’re worth mentioning. Roche Harbor (in the San Juan Islands) has mastered the art of “retaining the historical, if not generational experience, so families from grandparents to adult kids to their grandkids truly “get it” and each of these generations have special memories, emotional connections to the place where these memories happened. Yet Roche Harbor doesn’t get complacent, they continually make incremental improvements and make them in such a way that the “generational connection” stays connected and yet somehow, it’s still fresh and unique to every visitor, every time they visit. As a compliment to Bandon Dunes, I believe they do the very same thing. They somehow manage to keep what matters the same while innovating and refreshing things incrementally so that the 25 year old resort somehow still feels brand new and there’s something new to enjoy with each visit. Kudos to the Komens and their partners at Roche Harbor and to the Keisers and their PGA leadership team at Bandon for their success. At Tacoma, I never tire of the innovations made by Joel Kachmarek and his greens crew. He innovated with “teeways” as a way to increase playability for members and to save labor and wear and tear on equipment. Yet, as I learned this week, he or his Asst Superintendent, Rich still walk mow the “cleanup pass” on every green at least 3x per week. As a former greenskeeper, I love this because it puts Joel right where the playability matters most to his membership. It’s the “edge of the green” that slips and moves around the most, and it’s where the dreaded “collar dams” appear without constant oversight. In Joel’s case, complacency is not an issue. Nor is it an issue at Roche Harbor or Bandon Dunes.
5. Routine | Routine is not the same as consistency. Routine is based in unthinking, being automatic and unengaged. Conversely, consistency requires engagement, attention, assertiveness and delivery. Consistency is the structure on which individual’s can perform and represent a company or club’s values and deliver on defined promises and systems that are a “service launchpad” for team members. Consistency is built on:
   1. DEFINED SYSTEMS and CONSTANT EFFORT where team members are committed to: Repeat, Repeat, Repeat & Repeat. They have a good system, a good script allows for great execution (delivery) under pressure when it matters. In an baseball analogy, teams have spring training so they can define, develop and build their “team DNA” so their player’s can react, respond and come together in both their actions and their minds. Further, one could say that in baseball and in the golf business, “If we value our system (our script,) we will put in front of our players. If we don’t value it, why would they?”

Winning a world championship, e.g. the World Series, would be what some would call a mountaintop experience. To get there takes effort, planning, teamwork, communication, commitment and consistency toward a vision. Being on the mountain (or at the summit) of anything requires so much and it’s generally always worth it. Conversely, being in the “valley” can be either good or bad. Valleys can provide rest, peace or a landing place when we’ve failed on the climb up the mountain…but they are not great places to be in times of war, a flood or similar…or when we or our organization are hoping to be different and stand out.

With that, perhaps each of us need to consider where we’ve been leading both “ourselves” and our organizations towards. Have we fallen into the Icarus Paradox? Have we started to fall into tendencies that make us overconfident, lead us to exaggerate our own success, make us take too much or pass on too much blame? Have we started to relax a bit too much and become complacent and too routine-centric?

In the next installment of this series, Paradox Series VIII, we will look at what some call the “Tony Robbins Paradox.” That should be fun. Thanks for taking the time to read this article. If you have a story to share, an issue you’re facing professionally or similar, please reach out to me when you can. If you are seeking any help with your career or similar, please click on the “Book an Appointment on Monte’s Calendar” link below.