I call it the sin of success:  an early domination which makes the business feel like a champion, able to take on all comers.  Time and again, this vanity blinds the conqueror to the real and growing presence of a threat.  Sears somehow missed WalMart; AOL somehow missed everybody (but particularly Facebook, which also was ignored by Friendster).

This thinking was prompted by a recent WSJ column about AOL (by Jesse Kornbluth, who was the content leader at one point), which emphasized how short-term thinking and decision-making crowds out future opportunities, especially those in adjacencies.  The company defines its business narrowly and then misses the advantage it could have had. Classic marketing myopia and the innovator’s dilemma creating a restricted perspective and too little investment. Management prefers to bask and take pride in its initial success rather than take the challenge and the struggle of capitalizing on change and new opportunity.

There was also the recent announcement that Kodak has finally given up on its (digital) camera business.  What a big miss and what is worse, Kodak (as with Polaroid) saw digital coming and watched and watched and watched. They never committed enough to enlarge their vision as, for example, Intel did.

Most clearly, companies need to challenge themselves.  Those blessed with success need to keep from being blinded by their own brilliance.