Perhaps ironically, the companies that are in the biggest danger of becoming irrelevant are those that are already relatively successful. New businesses, and those in a crisis, know that they must act differently, move more quickly and exploit new opportunities better than their competitors.

Companies that are already successful often have a different mindset. They are far more likely to be focused on how they can maintain their position in the market, protect cash flows and maximise the returns they enjoy from their current market advantage for as long as possible. Their problem is that companies that are able to align their capabilities and build advantages to perfectly meet current market opportunities cannot necessarily adapt to meet tomorrow’s. In other words, nothing fails like success.

A management approach of protecting current performance and avoiding the aggressive pursuit of new, and potentially threatening, opportunities may seem like the low risk option, but in reality it can often ended up being a higher risk choice. Kodak, Olivetti and, now, Nokia have all ended up in a worse market and financial position as a result of their unwillingness and inability to change, adapt and innovate at a pace that is equal to or greater than the pace of change in your market.

As the chart demonstrates, if your company is in position (1) and is relatively successful, the chances are that your desire to maintain and incrementally improve your current position will far outweigh any latent aspiration to develop more radical new sources of growth. Even at position (2) it is likely that your concern about a lack of performance improvement will turn into initiatives that are focused on how you can get better at what you’re already doing, rather than developing a fundamentally new strategy and organizational approach. Only when the company reaches position (3) – and the unlikely event that you’re still in a job – will your focus turn to more radical and dramatic options.

But, by then, as with Nokia and Olivetti, it is often too late.

Where is your organisation on the chart, and what are you doing to avoid that the fruits of your current success don’t create the seeds of your future failure?

© Stuart Cross 2013. All rights reserved.