Last week there was good news about our University in Univers. The research master's program in Business was awarded first prize and € 280,000 from the Dutch Minister of Education in a competition among fifty research master's programs from all academic disciplines in the Netherlands. The VSNU committee announced that research in Law and in Business got top rankings for quality. Should we celebrate? Definitely. Should we be concerned? Yes, because of the Icarus Paradox.
The 'Icarus Paradox' was coined by Danny Miller who observed that great success often precedes severe decline. Icarus, as we know, attached wings made of wax and feathers to his shoulders and flew up into the sky. He flew higher and higher, until he came close to the sun, which melted the wax and Icarus fell to his death in the Aegean sea. What made him soar was the very reason for his decline. The same happens to organizations. Successful organizations tend to give more funding, support and status to the people they perceive as the basis of their success (for instance, a technology department). People with other ideas, from other departments, lose funding and status and decrease in number, making the organization more homogenous, 'simple', and inert. The organization loses its sense of urgency and becomes blind to opportunities and threats from a changing environment. Eventually, performance declines, at which time the alerted organization begins watching the environment again only to find out that it is too late and dramatic restructuring is needed to get back on track.
Perhaps the best example is IBM, once the world's most profitable company, which initially missed the PC market and ended up with huge losses until it finally restructured. It happens to many organizations. What can be done to avoid this 'success trap'? First, lose the sense of superiority by defining new goals that are hard to reach. Second, cherish diversity within the organization, countering the social forces that drive it out. Third, be alert to signals from a changing environment. For example, in our case - the setting I know best: Business - we should not limit ourselves to hiring top people to arrive at sound and sustainable research groups. Let's also target becoming third in Europe after LBS and Insead even though they have five to ten times more resources. Second, let's celebrate our foreign colleagues and Ph.D. and Master¿s students and those using different paradigms to explore similar phenomena (but are still so close we can talk to them). Third, watch for opportunities and threats from the environment, anticipating which moves competitors will make.
Very few organizations repair the roof when the sun is shining. The Law faculty appears to be an exception. In the last issue of Univers, Jan Franken said we should be aware of the 'Balkenende effect' of not changing a successful formula when external conditions change. Balkenende and his CDA peaked a few weeks ago in the polls at more than fifty seats in Parliament. By the time you read this column, we will all know what the outcome of this strategy was.
[Harry Barkema]
Last week there was good news about our University in Univers. The research master's program in Business was awarded first prize and € 280,000 from the Dutch Minister of Education in a competition among fifty research master's programs from all academic disciplines in the Netherlands. The VSNU committee announced that research in Law and in Business got top rankings for quality. Should we celebrate? Definitely. Should we be concerned? Yes, because of the Icarus Paradox.
