Article by Michael Simmons - Serial entrepreneur / Bestselling author / Contributor: Time, Fortune, and HBR
The November 2007 Forbes cover article is both interesting and perspective-altering: Nokia: One Billion Customers —Can Anyone Catch The Cell Phone King.
At the time, the company was valued at $93 Billion. It seemed unbeatable. Its future seemed bright. Months later, the stock crashed. Six years later, Nokia’s phone business was sold to Microsoft for just over $5 Billion—5.4% of its all-time high.
You can picture the feeling inside Nokia in 2007:
The media is lionizing the company
Investors are happy
The CEO had his salary doubled
Employees were getting bonuses
Every signal was saying that Nokia was on the right track for success. Yet, it was at its most risky point in the company’s history.
What happened? To answer this question, many will give a simple answer—disruption. On June 29, 2007, a few months before the cover article, Apple released the first iPhone. The iPhone created a new paradigm for smartphones that Nokia was not well-positioned to compete in.
This is true, but it also misses a deeper pattern—a pattern that all of us should know in order to avoid the fate of Nokia in our careers and companies...
Introducing The Seneca Trap
“Increases are of sluggish growth, but the way to ruin is rapid.” Seneca
Nokia is an example of the pattern that appears across many complex systems:
There is a rise of something over a long time.
The past is used to predict the future. Therefore, future growth is assumed and taken for granted.
The system reaches its peak.
Complacency sets in.
There is a rapid decline.
Some version of this phenomenon happens in companies, careers, and even stars. Hence the quote: “The sun shines brightest before it dies.”
One of the leading researcher in this world studying the Seneca Trap Ugo Bardi, author of The Seneca Effect, describes the collapse pattern using the wording of systems theory: “Negative factors tend to gang up to hasten the fall, as if there were some evil mind busy at planning the disaster. But it is not the case, it is simply that in complex systems all the elements tend to be connected and, when one fails, it takes other elements with it: it is the typical avalanche mechanism. In a complex system there are always more than a simple chain of cases of cause and effect.”
These "factors" can be both internal and external. For example, in the case of Nokia, internal factors may include the company's culture and intellectual capital. While external factors might include the iPhone and Android operating systems.
Why The Seneca Matters for Career Success
The point at which people are the most successful is often the point at which they’re at the highest risk in their career as well. Past success isn’t a guaranteed predictor of future success.
For example, if someone has had the same job doing the same thing for thirty years with a yearly salary increase of 2%, they will likely feel they’re more safe than they actually are. On the contrary, they are the most at-risk. If they lose their job for any reason, they will have trouble competing in the in the global job market against people who have been constantly updating their skills and who are willing to get paid less. It is unlikely that will find a job that comes close to their previous salary.
Here’s how the Seneca Trap can happen to knowledge workers:
They take on a new job and go into learning mode. In the beginning, they are outside of their comfort zone. There is a huge learning curve. It’s do or die.
They get good enough and plateau. If all goes well, they turn their learning into expertise. On a daily basis, they’re doing what they’re good at. They’re getting more and more efficient. Things are easier and easier. Researchers on expertise call this the OK plateau.
They get fat and lazy and stop investing in the future. Because things are going well, learning is looked at as a distraction. They don’t need it to do their job. So, they stop investing in learning and focus on cashing in on their previous learning. Because things have gone well for so long, they assume the future will be more of the same.
What's important to know is this...
Every single day that goes by the world evolves in ways that are invisible. Knowledge is created. People learn. Startup are founded. Therefore, every day you don’t learn, you’re actually falling behind. You just can’t see it yet. You’re like the frog who gets boiled alive because he never jumps out because the water temperature increases imperceptibly. By the time you realize that you need to change, it is often too late.
Therefore, the moral of the story is this: Learn like your career depends on it. Learn even when you don't feel like you need to. If you do this diligently every day, when change happens, it will be the trigger for you to jump to the next level rather than the first domino in your collapse.