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Why leaders don't learn from success.
Francesca Gino1, Gary P Pisano
1Harvard Business School, USA. fgino@hbs.edu
Harvard Business Review
|April 23, 2011
Summary
Success can lead to business decline by hindering learning. Companies must scrutinize wins like losses to overcome overconfidence and attribution errors, fostering continuous improvement.
Area of Science:
- Business Strategy
- Organizational Behavior
- Psychology
Background:
- Many dominant companies experience industry decline.
- Success can paradoxically lead to failure.
Purpose of the Study:
- To identify the learning impediments that cause successful companies to decline.
- To propose strategies for overcoming these impediments.
Main Methods:
- Analysis of psychological biases affecting learning from success.
- Examination of organizational learning failures.
Main Results:
- Success fosters fundamental attribution errors, overconfidence bias, and the failure-to-ask-why syndrome.
- These biases impede individual and organizational learning.
Conclusions:
- Companies must scrutinize successes with the same rigor as failures.
- Implementing systematic after-action reviews and experimentation is crucial for sustained success.
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