TED: Two reasons companies fail -- and how to avoid them | Knut Haanaes

The video discusses the importance of balancing exploration and exploitation for sustainable growth. It highlights the pitfalls of focusing too much on either, using Facit and OncoSearch as examples. Exploration involves innovation and risk, while exploitation focuses on efficiency and short-term gains. The speaker emphasizes the need for companies to balance both to avoid becoming obsolete. Strategies include thinking in multiple time scales, inviting diverse talent, and being skeptical of success. The video concludes with questions to help companies assess their balance between exploration and exploitation.

What was the main reason for Facit's downfall?

• They expanded too quickly.

• They failed to innovate with electronic calculators.

• They had poor management.

• They focused too much on exploration.

What is a key characteristic of exploration?

• It is about discovering new innovations.

• It is risk-free.

• It involves refining existing products.

• It focuses on short-term gains.

Why is exploitation considered less risky in the short term?

• It requires less investment.

• It is always successful.

• It focuses on improving existing knowledge.

• It involves creating new products.

What is the 'perpetual search trap'?

• Ignoring market trends.

• Constantly seeking new ideas without follow-through.

• Focusing too much on existing products.

• Relying on outdated technology.

Which company is mentioned as an example of balancing exploration and exploitation?

• Nestlé

• Xerox

• OncoSearch

• Facit

What is one strategy for companies to avoid falling into the success trap?

• Focus solely on short-term profits.

• Ignore market changes.

• Continuously innovate and adapt.

• Rely on past successes.

Why is it important to think in multiple time scales?

• To maintain a static business model.

• To avoid investing in new technologies.

• To balance short-term and long-term innovation.

• To focus only on immediate profits.

What role does inviting talent play in balancing exploration and exploitation?

• It focuses on short-term gains.

• It reduces the need for innovation.

• It helps in challenging existing ideas.

• It ensures a company remains static.

What lesson can be learned from the Roman triumph marches?

• Always celebrate victories lavishly.

• Remember the potential for failure.

• Success is permanent.

• Focus only on past achievements.

What reflective question should companies consider to avoid success traps?

• What past strategies should we repeat?

• How can we reduce innovation costs?

• What new areas should we explore?

• How can we maintain our current success?