What is a success trap?

This refers to companies that rest on their laurels and rely too heavily on their past successes. As such, they neglect to pursue new avenues to strengthen their long-term viability and end up reacting too slowly to changing customer needs.

Where have you heard about success traps?

Polaroid is a famous example of a company that failed to move with the times. In the 1990s, its management team didn’t respond quickly enough to the transition from analogue to digital photography, even though the rise of digital technology began in the 1980s.

What you need to know about success traps.

One of the main reasons for organisations getting caught in the success trap is bad management. There’s a lack of decisive action at the top level to take on board new ideas and reinvent the business.

A company can avoid the success trap by keeping a close eye on what its competitors are doing to balance the generation of cash with exploring new ideas. It also needs to regularly gather information about changing customer needs and emerging technologies. If it doesn’t, it will struggle to get out of the success trap without major interventions, such as a hostile takeover or an exit from the stock exchange.