Icarus Paradox

ICARUS PARADOX Swathi Velisetty Once upon a time King Minos of Crete imprisoned Daedalus and his son Icarus in the Labyrinth. Daedalus knew that Minos controlled all escape routes by land or sea, so Daedalus built wings for himself and Icarus. He used wax and string to fasten feathers to reeds of varying lengths to imitate the curves of birds' wings. When their wings were ready, Daedalus warned Icarus to fly at medium altitude. If he flew too high, the sun could melt the wax of his wings, and the sea could dampen the feathers if he flew too low. Once they had escaped Crete, Icarus became exhilarated by flight. Ignoring his father's warning, he flew higher and higher. The sun melted the wax holding his wings together, and the boy fell into the water and drowned. Daedalus looked down to see feathers floating in the waves, and realized what had happened. The paradox is that Icarus’ greatest asset led to his demise. A story which reflects on individuals and organizations’ greed to rise higher. Their victories seduce them to abandon caution and blind them against impending downfall. Danny Miller has documented this rag to riches story as Icarus Paradox. He identified four different trajectories of decline. Focusing Types

CRAFTSMAN

TINKERER

Strategy

Quality leadership

Technical Tinkering

Goals

Quality

Perfection

Culture

Engineering

Technocracy

Structure

Orderly

Rigid

But in becoming TINKERERS, many CRAFTSMAN become parodies of themselves. They get wrapped up in tiny technical details that they forget the purpose of quality is to attract and satisfy consumers. Products become over-engineered but over-priced; durable, but stale. Yesterday's excellent designs become today's sacrosanct anachronisms. Example: D.E.C. Can Toyota fall this way? Venturing Types

BUILDER

IMPERIALIST

Strategy

Building

Over expansion

Goals

Growth

Grandeur

Culture

Entrepreneurial

Gamesman

Structure

Divisionalized

Fractured

But many BUILDERS become IMPERIALISTS, addicted to careless expansions and greedy acquisitions. In the rush for growth they assume hair-raising risks, squander resources, and incur

loads of debt. They bite off more than they can chew, buying sick companies in businesses they do not understand. Example: Litton Industries Are Tatas and Reliance headed this way? Inventing Types

PIONEER

ESCAPIST

Strategy

Innovation

Hi-Tech escapism

Goals

Science for society

Utopia

Culture

R&D

Think tank

Structure

Organic

Chaotic

Unfortunately, many PIONEERS get carried away by their coups of invention and become ESCAPISTS--firms in pursuit of technological nirvana. They introduce impractical, futuristic products that are too far ahead of their time, too expensive to develop, and too costly to buy. They also become their own toughest competitors, antiquating prematurely many of their offerings. they start treating marketing and production as necessary evils, and clients as unsophisticated nuisances. Example: Control Data Corporations Are Japanese firms who come up with ‘futuristic’ inventions at risk? Decoupling Types

SALESMAN

DRIFTER

Strategy

Brilliant marketing

Bland proliferation

Goals

Market share

Quarterly numbers

Culture

Organization man

Insipid and culture

Structure

Modestly decentralize

Oppressively bureaucratic

Unfortunately, SALESMEN tend to become unresponsive DRIFITERS. They begin to substitute packaging, advertising, and aggressive distribution for good design and competent manufacturing. Managers begin to believe they can sell anything. This growing diversity of product lines and divisions makes it tough for top managers to master the substance of all their businesses. So they rely increasingly on elaborate bureaucracy to replace the hands-on management of products and manufacturing. Example: Chrysler Could ITC be next in line?

These trajectories have affected firms like IBM, P&G, Apple, GM, Chrysler, DEC, etc. As an employee, investor or plain consumer the future of an organization affects you. So I thought a mention about this paradox would help you to identify these trajectories before it’s too late.