Why Organizations Fail to Learn from Success

In a previous post, Success vs. Failure – Which is the Better Teacher? I explored the possibility that failure can often be a better teacher in life, especially in the second half of life.

Having said that, it’s also true that successful organizations often stumble as a direct result of their achievements, and good leaders will keep this in mind.

This phenomenon, the failure of organizations to learn from success, is examined in some depth at HBR.com, the online knowledge base for the Harvard Business Review. Here the authors, Francesca Gino and Gary P. Pisano, “argue that success can breed failure by hindering learning at both the individual and the organizational level.” They base their finding on a study that began in 2004, of companies with a long history of success.

Their conclusions are drawn from other studies of “behavioral decision making, and focus on three interrelated impediments to learning.”

1. Attribution Errors – This is described by psychologists as the inclination to take credit for success where none should be. When we succeed, we’re predisposed to conclude that our talents and our current model or strategy are the reasons. We also tend to give short shrift to the part that environmental factors and random events may have played.
2. Overconfidence Bias – The ego is a powerful force to be reckoned with, as success increases our self-assurance. Faith in ourselves is a good thing, of course, but too much of it can make us believe we don’t need to change anything.
3. Failure to Question Success – This is the tendency we have to not systematically investigate the causes of good performance. When executives and their teams suffer from this syndrome, they don’t ask the tough questions that would help them expand their knowledge or alter their assumptions about how the world works.

When placed in context, the reasons that organizations and leaders fail to learn from success might well be attributed to simple human nature; that is, the ego-reinforcing experience of setting and reaching one’s goals. Yet, the question remains, “How do we overcome this tendency in order to learn for both our failures and our successes?”

Filed in: Leadership | Tags: 3 reasons success leads to failure, attribution errors, failure to question success, how success can lead to failure, overconfidence bias, when leaders fail to learn from success, when organizations fail to learn