The Business Book

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T H E W O R S T

D I S E A S E T H A T

A F F L I C T S

E X E C U T I V E S

IS EGOTISM

HUBRIS AND NEMESIS

E

ven iconic companies can

falter, fail, and become

irrelevant. History repeatedly

shows that successful corporate

goliaths—such as Swissair, Enron,

and Lehman Brothers—can fall from

greatness. The list of possible causes

is long and includes management

complacency, poor marketing, poor

products, strategic blindness, a

weak economic environment, or

simply bad luck. However, in many

cases, paradoxically, success is the

catalyst for failure.

This is because success can

lead to an overconfidence that

blinds business owners and

managers to the real state of affairs.

Meanwhile, they also start to

IN CONTEXT

FOCUS

Success and failure

KEY DATES

c.500 BCE The ancient Greeks

coin the term “hubris” to

describe a form of pride that

loses touch with reality and

leads to “nemesis”—a fatal

retribution or downfall.

2001 Kenneth Lay, CEO

of Enron, sends employees an

email saying “our performance

has never been stronger.”

Four months later, Enron files

for bankruptcy.

2002 US activist Herbert

London claims that hubris is

as great a danger in the 21st

century as in ancient Greece.

2009 Jim Collins identifies five

stages of corporate decline in

How the Mighty Fall.