How Apple’s Past Success Almost Killed the Company (And the 5 Red Flags of Leadership Complacency)
Updated: May 3, 2020
By staying careful and humble you prevent complacency from setting in and derailing your business. These are the signs that you might be getting careless.
What’s the end goal of every business? Almost everyone would say – achieving success.
That’s all that you see in books and online guides. There’s endless content on how to implement successful strategies. Everyone has their take on how to grow a profitable business.
But there’s a typical problem that only appears later – after you’ve achieved enough success. The motivation that drives you fades away. And complacency starts to creep in.
There are plenty of companies that went from the top to obscurity as a result. Believe it or not, Apple was one of them.
The Business That Almost Went Bankrupt (Before Recovering)
When a company runs out of ideas, it usually starts its journey downhill.
That’s exactly what happened to Apple in 1997. However, the steady decline started 12 years prior.
Of course, that’s all before the iPod and the iPhone, before Mac became cool again. Apple has since gone on to become the first American public company to exceed US$1 trillion in market cap.
But we’re back in the 90s, back when things looked far less rosy. Apple was not a household name then.
Even so, the people behind Apple founded it on an inventive idea. They wanted to turn large industrial machines known as computers into compact consumer devices. They named it “personal computers” with the aim of mass-producing them.
Over the next several years, the company rose to become a leading manufacturer on the market. The company achieved fast growth and things were looking bright, at least up until the mid-80s.
Steve Jobs, the late mastermind behind Apple’s early success left the company in 1985. Over the following years, the company started to stagnate. Other names such as Microsoft had begun to outmuscle Apple in the market.
The company was rudderless. The products were failing, the marketing strategies not working, and the leadership non-existent. Bankruptcy suddenly seemed a possibility.
It was the combination of a bold move and fresh ideas that saved the company.
After a merger with Jobs’ new company NeXT in 1997, Jobs conveniently took over as CEO, who proceeded to scrape most of the company’s existing plans. His plan was to base future products on simplicity (which would later become Apple’s blueprint).
The new releases after that, such as the iMac G3 and the iPod, were hugely successful. Apple was back on track and the rest is history.
Still, those Apple devices that shaped the latest decade almost didn’t happen but for the turnaround.
Unlike Apple, most companies that found themselves in such a spot never recovered. Complacency is constantly lurking in every business, looking for an opportunity to fester and bring it all down.
You have to be ready to overcome it… or better yet, to prevent it from setting in in the first place.
The Challenges of Success
Growing a business is not smooth sailing, but it gets even harder after you’ve achieved success. When you reach your initial goals, you’ll run into challenges that you must be ready for.
The first step to failure is the lowering of your guard. The people behind most of the failed companies thought that they’d already done the hard part. You could learn from their mistakes.
Here are some of the challenges that you may face during your successful years.
#1 – Trouble Sustaining Growth
When the company starts growing, the investments you make become riskier. To sustain your company’s growth, you have to spend money.
This is where many become reckless. In fact, cash flow management is the second most common reason behind a small business going bust.
The common problem is that you feel like there’s no way you could fail. You are turning a profit and growing rapidly. You have enough to cover expenses. All of that can make you feel unbeatable.
You start spending more than you should. You employ more people or needlessly expand and everything becomes costly.
A sudden storm at that point can topple everything. It could be the loss of an important client, more ferocious competition, or any number of things.
You could spiral into debt unsustainably, and bankruptcy may seem more preferable.
The lesson is, never let that “invincible” feeling settle in. Especially during the successful periods.
Instead. be careful and consistent. It may not always make sense to put the pedal to the metal. You may find that slow and steady wins the race.
#2 – Ruthless Competition
Your company might be performing perfectly for some time, but the competition is always coming after you. Just around the corner is a lurking competitor. They aim to not just attain your position but replace you.
But that competitor is not your biggest foe – it’s complacency. Look at the competition’s role as always keeping you on your toes. You have to produce a top-quality product while maintaining competitive prices.
It’s fairly common for a successful business to forget its values once it achieves success. The bond between customers and the company becomes weaker. Your loyal clients may start exploring other options.
When the competition comes knocking, you have to be ready. You’ll do so by maintaining a close relationship with your clients and top-quality services. Of course, you can’t ever allow others to overshadow what you do.
#3 – Adapting to the Market
Always remember that you operate in the roughest of all seas – the market. Its tides are turning all the time. If you’re asleep at the wheel, it will take you off course and leave you stranded.
For a recent example, most people have heard of what happened to Blockbuster, at one time the video rental company. The company had over 9,000 stores and more than 80,000 employees at its peak in 2004. However, it went bankrupt just six years later.
All because they stuck to what worked and refused to adapt. Thanks to new technologies, the previously-glitchy streaming services became viable and soon the preferred choice of consumers.
As the tides of the industry were shifting, Blockbuster was careless.
If you want to stay ahead of the times, you need to be dynamic. Adapt to the market and change when necessary.
#4 – Structuring the Hierarchy
A huge amount of a company’s success sits on the shoulders of the management team. Apple’s main issue back in the day was a lack of direction and leadership.
That’s why it’s extremely important to make proper choices in terms of personnel. Know when it’s time to restructure certain departments of your business and hire those with fresh ideas.
Complacency in an organization and the hierarchy is the core of the problem. This leads to a lack of communication, clashes of opinions, and failure to agree on the company’s direction.
These types of organizations are impossible to manage. That’s why you need to keep sight of your management choices and how they fare in the changing environment.
#5 – You’ve Achieved Success, What’s Next?
All the aforementioned challenges lead to the final question: What’s the purpose? After a business has achieved success, a lot of entrepreneurs lose the will to keep going.
You set your targets and you’ve achieved them. The initial feeling is gone.
This is the greatest challenge of all – overcoming your internal struggles. That’s what almost sent Apple into obscurity.
And that’s why your mind needs to stay sharp and keep up with the changes.
Achieving success is not and should not be your final target.
The Red Flags to Look Out For
Unfortunately, most entrepreneurs don’t recognize the signs of complacency until it’s too late. Therefore, you shouldn’t sit back even if you feel everything is running smoothly.
Instead, pay attention to the red flags of complacency and act as soon as possible. Below are some of the most common indicators.
#1 – You Stop Noticing the Details
When the business is small, you have more time to notice the fine details. For example, changes in the market, the behaviour of your employees, low-quality output, etc.
But, details get lost as the business grows. If you notice that you’ve stopped focusing on the finer details of your company, you need to react.
#2 – You’re Reactive Instead of Proactive
When you’re starting, you need pragmatic strategies and creative ideas. You’re finding solutions to bend the market and find your own place.
If you stay in your comfort zone for too long, you’ll notice that you’re reacting instead of acting. And if you’re always reactive, that means that you’re always behind.
#3 – You Stop Taking Risks
In today’s market, you can only thrive by making bold moves. You probably did so on your way up. But this bravery often disappears when one reaches the top.
All of a sudden, they’re wary of changes so they choose the path of least resistance. The truth is, this is when you have to be fearless.
By stagnating, you’re taking on the biggest risk of all.
#4 – You Lose Authority
Complacency seduces all areas of the company. It takes over your employees too. You can feel a lack of commitment and if you can’t address it, you’ll lose authority.
Once your leadership gets called into question, the entire company loses value. The productivity drops and the motivation disappears. Make sure to steady the ship before it’s too late.
#5 - No New Ideas
If you feel like you’re “okay” with the status quo, you should start worrying. The lack of ideas is the end of any serious company.
Even if everything is going well, you’ll always come to a point where you need to reinvent everything. Apple’s case is only one example.
Keep Your Eyes Open for Complacency
As you see, any company can hit a brick wall. More often than not, it happens when everything seems to be running smoothly.
To avoid complacency, you need to stay sharp.
And I can help you with that.
For more advice on preventing business complacency, visit my website and book me for your next speaking engagement.