Musings Report #41 10-08-16 Why Does Early Success Lead to Failure?
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Why Does Early Success Lead to Failure?
It's a truism in business that initial success right out of the gate often sets up failure later on when challenges arise. Why is this so?
The obvious answer is over-confidence and/or hubris: the entrepreneur's early success breeds a misplaced confidence in his/her skills and the ease of doing business.
But if we dig a little deeper, we find that the successful-out-of-the-gate business owner was deprived of the opportunity to discover weaknesses in his/her business and management. If it's too easy, we don't have the obstacles and challenges needed to develop the skills to react quickly and positively to negative trends and crises.
We are more likely hone our skills and self-understanding in a context of shared goals--with spouses, partners, employees, collaborators, etc.--and a steady diet of obstacles and challenges that are not full-blown crises that threaten the business with extinction.
The more experience we have with obstacles and problems, the better our preparation for dealing with real crises.
The two sets of skills do not overlap perfectly, of course; many managers and marriages do well in eras of low-level problem-solving but founder in existential crises.
Some people who are poor day-to-day managers become brilliant leaders when faced with multiple crises and difficult decisions that must be made quickly. (I think of U.S. Grant in this context.)
Early success leave us poorly prepared for either set of challenges--the steady grind of obstacles and problems to solve/overcome and the inevitable existential crises that arise in business and life.
The skill of being decisive usually pays dividends, but not always. The only way to learn which situations require immediate, decisive action and which ones are better treated more patiently and iteratively is a matter of experience.
Ultimately, failure is the best teacher, and so the ideal learning curve is one of steadily more difficult obstacles and circumstances, so our failures can be significant enough to teach us but small enough to survive.
Unfortunately we can't engineer life or business to present obstacles and crises in an ideal ascending order. All we can do is extract the maximum mileage from each failure and each success, and ask: what would have happened if we'd chosen the other path or made the other decision?
Fortunately, we have a two rock-solid guides: maintaining our personal integrity and maintaining transparency, with ourselves, our partners and our clients.
And we also have humility, which empowers us to ask friends and mentors for advice and guidance. Even if we choose a different path than what was recommended, we learn from others' experiences and insights.
It's ironic that future success is built on years of failure and hardship, while initial success sets up future failure.
Summary of the Blog This Past Week
"The Island Where People Forget to Die" and Social Ecosystems 10/9/16
This Is How Quiet Fascism Works 10/8/16
Sorry, Central Banks: Risk and Volatility Cannot be Extinguished 10/7/16
The "Nuclear Options:" Oil Pinned Below $30/barrel, US Dollar Rising 10/6/16
It's Time We Crush the Putrid Roach Motels of Philanthro-Crony-Capitalism, Starting with the Clinton Foundation 10/5/16
When Did Our Elites Become Self-Serving Parasites? 10/4/16
Is the U.S. Dollar Set to Soar? 10/3/16
Best Thing That Happened To Me This Week
The USD rose just after I posted the blog entry last Sunday suggesting it was due for a significant pop higher--and I'm up 50% on my UUP (USD) calls.
Market Musings: I've got a bad feeling about this
"I've got a bad feeling about this" is of course a famous line in the Star Wars films. I have to say the line expresses my gut feeling about the stock market right now.
On the surface, markets still look to be in a bull market: price is still above the 20-week moving average (MA).
But beneath the surface, the indicators are rolling over and price is struggling to keep above the rising 20-week MA.
Meanwhile, the gap between the 20-week and 50-week has widened to an extreme that typically marks a top. Price is hitting lower highs, suggesting bullish buying is weakening.
If we look back in summer of 2015, we see a similar pattern: once price can no longer stay above the 20-week MA, a cascade declines occurs.
Volatility has been low for the past 3 months while price has gone nowhere. This market feels 1) heavy and 2) manipulated (via VIX being hammered down every time the market starts sagging).
From Left Field
How algorithms rule our working lives: Employers are turning to mathematically modeled ways of sifting through job applications. Even when wrong, their verdicts seem beyond dispute – and they tend to punish the poor
How Actual Nuts and Bolts Are Bringing Down Oil Prices (via Lew G.)
The price of connection: ‘surveillance capitalism’
The great leap upward: China's Pearl River Delta, then and now photographs (via Lew G.)
Number of ‘no-go zones’ in Sweden Increase as police lose control over violence
Why Was Coffee Drinking Once Scandalous? (via Lew G.)
On the Thermodynamic Black Hole -- oil costs more to extract/refine...
Saudi Arabia's Engine of Future Growth Is Running Out of Gas (via Joel M.)
Stupefied: How organisations enshrine collective stupidity and employees are rewarded for checking their brains at the office door (The Stupidity Paradox) (via Lew G.)
In Need of a New Hip, but Priced Out of the U.S. (via Joel M.)
The Avalanche of Distrust -- MSM view of this election cycle
Central Banks on QE Highway Worry About Running Out of Road (via Joel M.)
Desert Storm, the Last Classic War -- and the last "good war" too...
"Sometimes people don't want to hear the truth because they don't want their illusions destroyed." - Frederick Nietzsche
Thanks for reading--
charles |
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