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Excellent article; I thought the section copy-pasted below to be a rather non-trivial, unintuitive, and meaningful lesson: > Craig : How was it to ride that wa

Excellent article; I thought the section copy-pasted below to be a rather non-trivial, unintuitive, and meaningful lesson: > Craig : How was it to ride that wave, especially when the bottom fell out in 2000? > Tim : When things are going well and you’re in a growth industry, you don’t have to deal with many difficult issues. It’s the old cliche, winning solves everything. > Craig : For sure. > Tim : It’s really true. It solves everything… or maybe better said, it masks all your mistakes. A lot of the mistakes you make get masked because you receive almost no negative feedback. > But then the bottom fell out and the board let Tim Koogle go. The upper ranks of management emptied out pretty quick, except for me and the CTO who stuck around. We got a new CEO and set of peers in upper management. Let me just say, I learned a whole lot more about business on the way down than I did on the way up.

kerryfalk 10y ago
I've seen this happen in a couple of industries and have joined two companies at the start of the reorg/turnaround. There is a lot to do as until the pressure is on a lot gets ignored and runs inefficiently. It's a different kind of challenge but just as fun.
brianpan 10y ago
I don't know if it's apropos to talk sports, but in a very real way this is what happened to the Warriors. They had an historic, record-breaking season that allowed them all sorts of bad habits. In the Finals when they are on the verge of reaching their goal, those bad habits showed and contributed to their falling short. Coach Steve Kerr talked about recognizing those mistakes during the season but it is hard to correct those things when you are winning. Perhaps a good lesson. http://blogs.mercurynews.com/kawakami/2016/06/24/steve-kerr-on/ http://blogs.mercurynews.com/kawakami/2016/06/24/steve-kerr-...
- xigency 10y ago
  When I think of the bottom falling out on a team this year, I think of the White Sox. But maybe that's because I'm from Chicago.
  - shostack 10y ago
    I think that's just because the Cubs are by some fluke doing so well comparatively. Don't worry, Cubs will still choke :)
    - xigency 10y ago
      Nope, I'm pretty sure it's the players, the manager, and the front office. It's hard to go from 23-10 to fourth in the division.
- hitekker 10y ago
  The glow of outward success may very well be a lagging indicator of eventual failure, if not the cause. Companies, nation states of years past can also follow this rough pattern. http://www.historyguide.org/europe/kennan.html http://www.historyguide.org/europe/kennan.html > This phenomenon brings to mind a comparison used by Thomas Mann in his great novel Buddenbrooks. Observing that human institutions often show the greatest outward brilliance at a moment when inner decay is in reality farthest advanced, he compared one of those stars whose light shines most brightly on this world when in reality it has long since ceased to exist.
- ErikAugust 10y ago
  Patriots, when they had the undefeated season, come to mind.
- emmfr 10y ago
  Or maybe we are just making up narratives to explain regression toward the mean?
  - brianpan 10y ago
    The relevant bit was: during the season coach Kerr recognized faults that he found difficult to correct. Not in hindsight. The discussion is about what happens when you are winning. No one is making excuses for losing.
- cmdkeen 10y ago
  The England rugby team do a lot of work with the military and other organisations to look at how to develop leadership. After a win they spend a long time analysing how they played and what they, individually and collectively, could have done better. After a loss they have a much shorter washup. It might sound counter-intuitive but it is much easier to get people to say "if I had done this we could have scored even more points" after a win than admitting that they could have won except for something they did wrong.
mwfunk 10y ago
Success hides failure...every company does some things right and some things wrong, but when things are going well it can be very hard to get anyone to acknowledge the wrong things. People can always point to the profits and use that as evidence for staying the course, even on internal issues that don't directly relate to P&L. IMO this is what ultimately kills successful companies- once they've conquered their market (whatever they see their market as being), it's all too easy to take success for granted and get too focused on internal politics. The absence of fierce external competition is the ultimate test of a company's internal culture.
- Dr_tldr 10y ago
  Interestingly, this problem of decadence and decay scales to countries, royal dynasties, empires, etc. We don't yet have any companies so large that their period of decline has been able to last for centuries, but it's theoretically possible. I don't think Oracle and IBM will be around in 2050, but I wouldn't have thought they'd be around now in 2005, so my perception is probably off.
  - mikekchar 10y ago
    Hard to say if there are companies whose decline lasted over a century, but there are definitely some who are close. Consider the East India Company which was established in 1600 and lasted until the late 1800s. In my native Canada, the Hudson's Bay Company was granted a charter in 1670 and at one point owned half the country. It has been struggling for very nearly 100 years and I think you could say that it has been on a downturn for at least 150 years.
  - vinceguidry 10y ago
    I don't believe the proper narrative about how the decline of the Roman empire was due to decadence. I believe it was a victim of its own success. Roman ideas, organization, and commerce spread out to the surrounding kingdoms, eventually each region developed a polity progressively capable of challenging Rome. It didn't happen all at once, and if you look at it in the micro, it does look like a decline, but in the macro, the so-called decline of the Roman empire was a story of progress. You can generalize this. Isolate the idea that the organization was built on, then see what happened to it. Usually, you'll see that the 'killer app' that gave them the ability to rise to the top created a new world in which everyone has that ability to exercise it. If you don't come up with a new one, you'll eventually lose your privileged position. There's nothing wrong with this at all. We just are wired to want success so we go looking for personal failures rather than thinking bigger.
dredmorbius 10y ago
Which is why success is such a terrible teacher.

kerryfalk 10y ago

I've seen this happen in a couple of industries and have joined two companies at the start of the reorg/turnaround. There is a lot to do as until the pressure is on a lot gets ignored and runs inefficiently. It's a different kind of challenge but just as fun.

brianpan 10y ago

I don't know if it's apropos to talk sports, but in a very real way this is what happened to the Warriors. They had an historic, record-breaking season that allowed them all sorts of bad habits. In the Finals when they are on the verge of reaching their goal, those bad habits showed and contributed to their falling short. Coach Steve Kerr talked about recognizing those mistakes during the season but it is hard to correct those things when you are winning. Perhaps a good lesson. http://blogs.mercurynews.com/kawakami/2016/06/24/steve-kerr-on/ http://blogs.mercurynews.com/kawakami/2016/06/24/steve-kerr-...

xigency 10y ago
When I think of the bottom falling out on a team this year, I think of the White Sox. But maybe that's because I'm from Chicago.
- shostack 10y ago
  I think that's just because the Cubs are by some fluke doing so well comparatively. Don't worry, Cubs will still choke :)
  - xigency 10y ago
    Nope, I'm pretty sure it's the players, the manager, and the front office. It's hard to go from 23-10 to fourth in the division.
hitekker 10y ago
The glow of outward success may very well be a lagging indicator of eventual failure, if not the cause. Companies, nation states of years past can also follow this rough pattern. http://www.historyguide.org/europe/kennan.html http://www.historyguide.org/europe/kennan.html > This phenomenon brings to mind a comparison used by Thomas Mann in his great novel Buddenbrooks. Observing that human institutions often show the greatest outward brilliance at a moment when inner decay is in reality farthest advanced, he compared one of those stars whose light shines most brightly on this world when in reality it has long since ceased to exist.
ErikAugust 10y ago
Patriots, when they had the undefeated season, come to mind.
emmfr 10y ago
Or maybe we are just making up narratives to explain regression toward the mean?
- brianpan 10y ago
  The relevant bit was: during the season coach Kerr recognized faults that he found difficult to correct. Not in hindsight. The discussion is about what happens when you are winning. No one is making excuses for losing.
cmdkeen 10y ago
The England rugby team do a lot of work with the military and other organisations to look at how to develop leadership. After a win they spend a long time analysing how they played and what they, individually and collectively, could have done better. After a loss they have a much shorter washup. It might sound counter-intuitive but it is much easier to get people to say "if I had done this we could have scored even more points" after a win than admitting that they could have won except for something they did wrong.

mwfunk 10y ago

Success hides failure...every company does some things right and some things wrong, but when things are going well it can be very hard to get anyone to acknowledge the wrong things. People can always point to the profits and use that as evidence for staying the course, even on internal issues that don't directly relate to P&L. IMO this is what ultimately kills successful companies- once they've conquered their market (whatever they see their market as being), it's all too easy to take success for granted and get too focused on internal politics. The absence of fierce external competition is the ultimate test of a company's internal culture.

Dr_tldr 10y ago
Interestingly, this problem of decadence and decay scales to countries, royal dynasties, empires, etc. We don't yet have any companies so large that their period of decline has been able to last for centuries, but it's theoretically possible. I don't think Oracle and IBM will be around in 2050, but I wouldn't have thought they'd be around now in 2005, so my perception is probably off.
- mikekchar 10y ago
  Hard to say if there are companies whose decline lasted over a century, but there are definitely some who are close. Consider the East India Company which was established in 1600 and lasted until the late 1800s. In my native Canada, the Hudson's Bay Company was granted a charter in 1670 and at one point owned half the country. It has been struggling for very nearly 100 years and I think you could say that it has been on a downturn for at least 150 years.
- vinceguidry 10y ago
  I don't believe the proper narrative about how the decline of the Roman empire was due to decadence. I believe it was a victim of its own success. Roman ideas, organization, and commerce spread out to the surrounding kingdoms, eventually each region developed a polity progressively capable of challenging Rome. It didn't happen all at once, and if you look at it in the micro, it does look like a decline, but in the macro, the so-called decline of the Roman empire was a story of progress. You can generalize this. Isolate the idea that the organization was built on, then see what happened to it. Usually, you'll see that the 'killer app' that gave them the ability to rise to the top created a new world in which everyone has that ability to exercise it. If you don't come up with a new one, you'll eventually lose your privileged position. There's nothing wrong with this at all. We just are wired to want success so we go looking for personal failures rather than thinking bigger.

dredmorbius 10y ago

Which is why success is such a terrible teacher.