Most organizations fail. The vast majority of new restaurants don’t survive two years. Over 90% of the car companies that existed in the early 1900s were gone by the 1940s. At least a few of today’s most successful enterprises appear to be going down the same path.
Examples abound of how success creates size,market power,and an entitlement culture,all of which,in turn,create an inward focus,a lack of understanding of external reality,and a total lack of urgency to correct the problem.
A Dangerous Complacency
In the supermarket business,one regional chain was the very first in its geographical area to offer a broad selection of packaged goods,meat,and produce,all with a level of service found only in its best smaller competitors. Customers loved it. As a result,over 40 years the chain grew from two stores to 62. The size of each new facility increased,economies of scale grew,margins were kept exceptionally high,and national supermarket chains chose to stay away from a difficult competitive situation.