The Success Trap: Why Incumbents Keep Winning The Wrong Game
Corporate strategy loves a sure thing. Predictable returns. Quarterly gains. Models that scale.
It’s no surprise then that most large companies fall into the “Success to the Successful” trap — a systems thinking archetype that explains how early wins become self-reinforcing. Allocate resources to what works. Reinvest where results are proven. Double down on success. Repeat.
But here’s the problem: it turns your organization into a high-performance engine optimized for the past. When the next S-Curve appears — a new technology, a new customer behavior, a market shift — you’re no longer first in line. You’re stuck defending the old.
Worse: by the time you realize the new curve matters, it’s already expensive to enter. You’re buying in late, with legacy baggage, and probably overpaying for what you could have built in-house years earlier.
Let’s stop calling this disruption. It’s starvation. Self-inflicted.
The Trap in Action
“Success to the Successful” works like this:
- Business A performs well. It gets more resources.
- Business B struggles. It gets less.
- Over time, Business A dominates. Business B becomes irrelevant.
On paper, it makes sense. But when Business A = the core, and Business B = the new curve, this loop quietly eats your future.
What does this look like inside the company?
- Innovation teams pitching endlessly for scraps.
- Leaders saying “prove traction first” while starving early-stage ideas.
- Every investment decision filtered through today’s P&L.
This is how incumbents lose: not because they lacked ideas, but because their internal systems wouldn’t fund anything uncertain.
This pattern creates a dangerous illusion: that performance equals health. That a high-performing unit today guarantees tomorrow’s relevance. But as history shows us, dominance in a dying market is not a strength — it’s a liability.
S-Curves Don’t Wait
Every market rides an S-Curve. Innovation starts slow, grows fast, plateaus, then declines. The challenge isn’t riding the current curve — it’s jumping to the next.
But jumping means:
- Resourcing things that don’t look like winners yet.
- Protecting teams from legacy metrics.
- Making decisions that won’t pay off this fiscal year.
Most large organizations are structurally incapable of doing this. They’re designed to optimize, not disrupt themselves. To avoid failure, they avoid risk. And in doing so, they defer their future.
Every quarter you delay the jump, your cost of entry rises. Talent migrates. Markets consolidate. What was once a greenfield opportunity becomes a pay-to-play acquisition.
Let’s Be Blunt: It’s Not Disruption. It’s Self-Delusion.
Startups don’t kill incumbents. Incumbents kill themselves by:
- Clinging to the core too long
- Treating exploration like a side hustle
- Incentivizing preservation over possibility
And here’s the kicker: they often know they’re doing it. But the system is stronger than the strategy.
You can have a bold vision deck and still run a budgeting process that ensures the bold never happens.
Corporate governance, legal compliance, and P&L pressures turn what should be bold bets into watered-down pilots. Initiatives get over-reviewed and under-resourced until they can neither fail fast nor scale fast.
Escape Mechanisms: What Actually Works
If you’re serious about breaking the loop, you need more than innovation theater. You need structural rewiring. Here are five mechanisms that change the game:
Budget Before Business Case
If you only fund what already has numbers, you’ll never fund what’s next.
Break the cycle by allocating a fixed percentage of budget to exploration before any ROI case is made. Think of it like VC capital: spread small bets, fund traction.
Let teams explore before they pitch. Let them learn before they forecast. Let them fail before they justify.
The discipline here is not just about carving budget — it’s about protecting it. Make it untouchable during downturns. Set rules that stop the core business from raiding future bets when margins get tight.
Design for Exit Velocity
Stop building internal products bound by internal rules. Design ventures to escape the org chart.
Spin-outs, carve-outs, sandboxed teams — whatever gets them autonomy and a runway. The goal isn’t alignment. It’s liberation.
Treat internal ventures like startups. Give them their own OKRs, governance, even branding. Let them build identity and momentum without legacy baggage.
And when they find product-market fit? Let them scale on their own terms, or choose to reintegrate only when there’s strategic advantage — not just corporate preference.
Kill Metrics That Lie
Most metrics are built for maturity. They don’t apply to ventures. Measuring early innovation with core KPIs is like judging a toddler by their tax returns.
Use stage-appropriate metrics: learnings, riskiest assumption testing, speed to invalidation.
Develop a separate dashboard for exploratory bets. Track learning velocity, not just growth. Highlight invalidated hypotheses as successes. Celebrate pivots backed by evidence.
And train the executive team to read these differently. Innovation metrics are a different language — make sure leadership is fluent.
Fireproof the Rebels
Your best ideas often come from people on the edge. Protect them.
Create red zones where teams can work without corporate antibodies shutting them down. Shield them from endless alignment meetings. Give them a founder-like mandate.
Build a firewall between the venture and the mothership. This isn’t isolation — it’s insulation. It buys the venture time to test without premature judgment.
Also: staff these ventures with intrapreneurs, not just high-potential corporate climbers. You want builders, not box-checkers.
Move the Talent, Not Just the Money
Don’t just allocate budget. Allocate your best people.
The folks who know how to scale a business? You need them building the new one. The ones who can sniff out customer pain? Move them to the frontier.
Make it a badge of honor to work on the new curve. Build rotation programs that move top talent from core to explore — and back.
And critically, align incentives. Make success in the venture space count just as much (or more) than core performance when it comes to career growth.
A Word on Courage
Escaping the success trap isn’t a process change. It’s a leadership decision.
Because making these moves will feel wrong. You’ll be funding uncertainty. You’ll be disrupting your own people. You’ll be asked to defend investments that haven’t paid off.
But the alternative is worse: waiting until the old curve collapses and buying relevance back at a premium.
Courage isn’t optional. It’s the price of admission to the next wave.
Strategy Isn’t a Slide — It’s a Set of Priorities
Your real strategy isn’t what you say. It’s what you fund. What you measure. What you reward.
If you say innovation matters but every dollar goes to the core? That’s your strategy.
If you celebrate bold thinking but promote only the safe performers? That’s your strategy.
If you build an incubator but never spin out a venture? That’s your strategy.
Be honest about the systems you’ve built. Then ask: do they help you win the next game, or just keep you winning the last one?
Final Thought: Don’t Just Manage Risk. Own the Next Curve.
The next S-Curve will emerge. The only question is: are you building it, or will you buy it later from someone who did?
Incumbents have everything they need to lead: resources, reach, reputation. But only if they’re willing to break the success loop before it breaks them.
Because in the end, what you feed is what grows. If you want future growth, start feeding it now.
And remember: the cost of early innovation looks high. But the cost of late relevance is always higher.
Looking to work with a team of experts that know how navigate the Success to the Successful trap? Why not reach out: hello@minglabs.com
Writer:
Sebastian Mueller — Founding Partner, MING Labs
