The Factors Preventing Success

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The HBO television series “Hard Knocks” provides NFL fans inside access into the leadership and decision-making processes of a selected team. 

This offseason, HBO is focusing on the New York Giants as they attempt to rebuild their franchise. Over the last eight years, the Giants have failed to win their division, amassing a 48-82-1 record, 36 percent winning percentage, with two playoff appearances and just one playoff win. 

As much as we can learn from winning organizations in terms of how to become a championship-level team, we can also collect important insights from struggling teams on why they have failed to maintain a level of success. 

Many assume business or sports teams fail because they don’t react to the changing times — that they are often paralyzed, stunned and fail to conform to the new way of business. They are left on the street corner, missing the last bus to prosperity.

But according to Donald Sull, an MIT Sloan School of Management lecturer, inaction isn’t typically the cause. Good companies that go bad do react, they just don’t sit idling by. The problem is their inability to understand the appropriate action. 

Sull believes these downtrodden companies are engaged in what he refers to as “active inertia,” define as an organization’s tendency to follow established patterns of behavior — even in response to dramatic environmental shifts. 

Firestone Tires, for example, lost its market share by responding to a challenge in the wrong manner, Sull explains. Its reaction to the radial tire market was swift, investing over $1 billion in its production mechanism. 

What it failed to recognize and adjust was its production process to the new tires, using old methods for new ideas. Rather than re-design its production process, Firestone tinkered with it, despite the fact that the radial tire required higher quality standards. 

In addition, it held onto old plants that produced only the obsolete tires, with little evidence they would become popular again. In one instance, Firestone acted, in another it didn’t, and in both cases the company was wrong. 

The same can be said about the Giants. They have acted and spent money; yet, most of their decisions have proved to be wrong. 

What occurs when good becomes bad is the fresh thinking that led to the initial success of the company is often replaced by the rigid devotion to the status quo. 

Companies like Firestone and the Giants are willing to act, believing they have adapted, yet use old methods for their new ideas. Old formulas of success hinder the new ways needed to sustain. 

Instead of asking what we should do to get back on top, companies that are downtrodden need to ask, “What is hindering us from restoring our stronghold?” 

Leadership is a function of asking the right questions, while management is charged with correctly answering the questions. Without the right questions, all the answers will be wrong. 

Just because organizations act doesn’t mean their actions are going to work. They must first answer one critical question:

What is hindering us from being successful? 

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