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What is the Law of Success in marketing? How was success the downfall of Digital Equipment Corporation? What can you learn by embracing failure?
In The 22 Immutable Laws of Marketing, the Law of Success states that you must be wary not to let success be your downfall. Success can alter the dynamics of your company, cause executives to lose touch with marketing, and cause CEOs to become more distant.
Keep reading to learn how to handle success and how to embrace your failures.
The Law of Success
You’ve worked hard, stayed focused, grown in the market, dodged your competitors’ negative attacks, and gained huge success. Now, the Law of Success says that you have to be wary that that success doesn’t cause your downfall. Consider the cautionary tale of Digital Equipment Corporation (DEC) founder Kenneth Olsen, who built the $14 billion company from the ground up by becoming the leader in minicomputers. Olsen’s success caused him to overestimate his industry wisdom and dismiss some of the most impactful computer innovations of the time—the personal computer, open systems, and reduced instruction set computing (RISC). In the late 1970s, Olsen said, “There is no reason for any individual to have a computer in his home.” He was forced to retire as president of DEC in 1992.
Success can alter the dynamics that brought the company success in the first place:
- Success tends to inflate executives’ egos, causing them to make decisions that hurt the company. This often comes in the form of line extensions. For example, when the CEO of a market-leading steak sauce brand sees how successful the product has become, she may think that the brand name is the source of that success. With that logic, the natural next step is to put that brand name on a host of new products, assuming that the name will bring success with it. In reality, the brand name’s success is a byproduct of effective marketing, and sticking it on other products only weakens its power across the board (Law #13).
- Success causes companies to grow, which creates more demands on executives’ time, and they lose touch with marketing. As CEOs spend more time sitting in corporate meetings, meeting ancillary obligations, and doing everything else required to run a large company, they spend less time on the front lines and often delegate marketing to a manager. However, executives must stay involved in the nitty-gritty in order to catch opportunities when they arise (Law #16). Although a large company has more resources to invest into robust marketing, that advantage is offset by the sacrifices the executives must make.
- As CEOs become more distant from the front lines, their subordinates are less likely to tell them hard truths. As a result, CEOs are often out-of-touch with issues and challenges that should influence their decision-making—but as far as the executives know, everything is going great. One way executives can get around this is by dropping in unexpectedly (or in disguise) at lower-level meetings and retail stores. Successful marketing requires you to put yourself in the customers’ shoes, so a wise CEO must bridge the gap between her corner office and her customers’ lifestyles.
The Law of Failure
With success often comes failures. Failure is inevitable. Sometimes it’s small and manageable, sometimes it’s massive and devastating. To be successful in business means to expect and embrace failure. Not every problem needs to be resolved—sometimes you just need to recognize a failure and cut your losses. Xerox could have saved itself $2 billion and decades of struggles if it had accepted its failure in the computer market and stuck with copiers. If you embrace failure:
- You’ll be willing to make the bold risks that are necessary for big rewards.
- You’ll be able to learn from your mistakes and constantly improve.
Foster a company culture that accepts the possibility of failure:
- Encourage employees to experiment and learn from their misses. Don’t punish failure—unless they make the same mistake repeatedly.
- Promote group decision-making so that no individual bears the weight of the risk of failure. If just one person carries this weight, they’ll be less inclined to take necessary risks.
- Don’t allow managers and executives to dismiss an idea simply because they don’t benefit directly from it.
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