science

Success trap

Success trap is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Success trap rather than just read about it. In short: The success trap refers to business organizations that focus on the exploitation of their (historically successful) current business activities and as such neglect the need to explore new territory and enhance their long-term viability. Overview The success trap arises when a firm overemphasizes exploitation investments, even if explorative investments are required for successful adaptation.

Key takeaways

Success trap belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Success trap to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Success trap from memory before moving on to harder problems.

Reference excerpt

The success trap refers to business organizations that focus on the exploitation of their (historically successful) current business activities and as such neglect the need to explore new territory and enhance their long-term viability.

Overview The success trap arises when a firm overemphasizes exploitation investments, even if explorative investments are required for successful adaptation. Exploitation draws on processes that serve to incrementally improve existing knowledge, while exploration involves the pursuit and acquisition of new knowledge. Firms and other organizations that have been performing well over an extended period of time are exposed to strong path dependence in exploitative activities, at the cost of explorative activities with which they have little experience. For example, in the 1990s Polaroid’s management failed to respond to the transition from analogue to digital photography, although the rise of digital technology had been evident since the 1980s. Other well-known examples of companies that got caught in the success trap include Nokia, Kodak, Rubbermaid and Caterpillar.

Conditions giving rise to success trap A key condition giving rise to a firm getting caught in the success trap is the company culture, having been created based on the understanding of what makes success, the culture then solidifies. When the environment changes there is an initial dismissing of the significance of the change and the (over time) subsequent failure to adjust the strategy of the firm. Thus, top managers do not ‘see’ the upcoming exogenous change, because their thinking and policies tend to constrain exploration and experimentation within the firm and inhibit the ability to bring about strategic change. A broader perspective arises from how exploration activities are suppressed in publicly owned companies as a result of the interplay between the CEO and other top executives, the Board of Directors, the pressure for short-term (improvements in) results arising from the capital market, and the substantial delay between the investment in exploration efforts and the return on these efforts.

Preventing the success trap The success trap can be best avoided early on, for example, by closely monitoring how other (e.g. leading) firms maintain a balance between exploitation and exploration activities, as well as by continually collecting information about changing customer needs, newly emerging technologies and other changes in the market and competitive environment. Drawing on this type of information, the executive board and board of directors together need to develop and sustain a shared long-term vision and strategy regarding the investments in exploitation and exploration activities. Once a publicly owned corporation has been suppressing exploration over an extended period of time, it tends to be almost impossible to get out of the success trap without major interventions - such as a hostile takeover by another corporation or an exit from the stock exchange.

Consequences of the success trap Firms that fall into the success trap suffer long term consequences. They grow their revenues at a lower pace than other companies and also create less shareholder value than more exploratory companies. These patterns can be observed for S&P 500 companies in the USA in the aggregate and also within industries.

See also Ambidextrous organization Disruptive innovation Knowledge management Organizational learning Polaroid Corporation Strategic management

References

Worked examples

Example 1 — a first encounter with Success trap

Start with the simplest possible case. Write down what Success trap claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Success trap before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Success trap ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Success trap

In research: Success trap appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Success trap in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Success trap is common in secondary-school and first-year university syllabi. It links to neighbouring topics Business planning, Change management, Financial markets, so understanding it makes those chapters shorter.
In everyday life: Look for Success trap outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Success trap in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Success trap means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Success trap out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Success trap in simple terms?

Why does Success trap matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Success trap?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Success trap.