The risk of past success in your team
Past performance is not a reliable indicator of future success. Photo by Jake Weirick on Unsplash
The Australian Securities Investment Commission has specific guidance around how advertisers can use past performance within its material to indicate the suitability of a product for a consumer. This is particularly relevant for financial products and is why many of the advertisements contain wording along the lines of “past performance is not a reliable indicator of future success”.
The advertisements often say this immediately after telling us how much better off we would have been had we invested with them 10, 15 or 20 years ago - or how they have won awards in the past. They are obliged to tell us that “past performance is not a reliable indicator of future success” and yet they use the exact opposite of that logic to convince us to invest in their products. The advertisers have made it clear what they think is going to be more likely to drive action - the appeal of doing what has worked in the past!
The same thing can happen in teams. Intellectually may know that just because we have been successful, there is no guarantee of future success. Behaviourally, we typically do the same things that have led us to success. Success can be a terrible teacher. It often doesn’t cause us to reflect and understand why we are getting the results and makes us very vulnerable to shifts in context. There are many stories of companies that fell from grace because they hung on to outdated business models or product lines - hello Kodak, Blockbuster, and Nokia.
Of those three, only Nokia has made somewhat of a comeback but is a long way from their previous market position. What they have in common was a failure to respond as the context in their market shifted. It’s easy to throw rocks from a distance and with the benefit of hindsight. The real trick for teams is to resist the comfort and complacency that can be brought on by success and constantly seek to deliver value in the current and emerging contexts that they are operating in.
Some questions for you to consider in your teams:
What has led to success in your teams?
Are the conditions under which you achieved success the same as current conditions?
How can your teams resist complacency?