Success trap

[4] Other well-known examples of companies that got caught in the success trap include Nokia, Kodak, Rubbermaid and Caterpillar.

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.

[10] 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.

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.

[10] Firms that fall into the success trap suffer long term consequences.