Seven deadly sins threatening organizations’ strategic success

The seven deadly sins, also known as the capital vices, or cardinal sins, is a grouping and classification of vices sometimes thought to be Christian in origin, others consider them ancient Greek. Behaviours or habits are classified under these categories if they directly give rise to other immoralities.These sins are often thought to be abuses or excesses of natural faculties or passions (source: Wikipedia).

Sometimes individual people are characterized by one of these sins. As organizations are made up of and are shaped by individuals, I figured organizations could also showcase these sins. So I did some digging into these seven sins and have found several business examples to illustrate sins in business.

1. Superbia: pride, hubris

This first sin is often seen as the origin of all sin(s). It can be defined as dangerously corrupt selfishness, the putting of one's own desires, urges, wants, and whims before the welfare of other people. In even more destructive cases, it is irrationally believing that one is essentially and necessarily better, superior, or more important than others, failing to acknowledge the accomplishments of others, and excessive admiration of the personal image or self (especially forgetting one's own lack of divinity, and refusing to acknowledge one's own limits, faults, or wrongs as a human being). (source: Wikipedia)

As an organization, being proud of who you are, what you do and what you stand for is usually a positive thing. Forgetting that the world does not spin around your organization, and will thrive perfectly well without you, can cause a lack of awareness and curiosity about the world around you.

As a result, one might find itself out of touch with that same world, losing market share and loyal customers to competitors. Some organizations are able to humbly accept their mistakes and turn themselves around, others are not so smart (or lucky).

Aristotle argued that each positive quality represents a golden mean between two extremes, each of which is a vice. Courage, for example, is the virtue of facing fear and danger; excess courage is recklessness, while deficient courage is cowardice. (source: Wikipedia) Following this line of reasoning, one could avoid pride by steering clear of resting on you laurels by considering the market as “won” forever, and on the other hand, always being open to new opportunities instead of thinking one could never be better than any competitor.

Home movie and video game rental services giant, Blockbuster Video, was founded in 1985 and perhaps was one of the most iconic brands in the video rental space. At its peak in 2004, Blockbuster employed 84,300 people worldwide and had 9,094 stores. In 2000, Netflix approached Blockbuster with an offer to sell their company to Blockbuster for US $50 million. The Blockbuster CEO was not interested in the offer because he thought it was a "very small niche business" and it was losing money at the time. As of July 2017, Netflix had 103.95 million subscribers worldwide and a revenue of US$8.8bn. Unable to transition towards a digital model, Blockbuster filed for bankruptcy in 2010. (source:https://www.collectivecampus.io)

2. Luxuria: lust

Lust is defined as intense longing. It is usually thought of as intense or unbridled sexual desire. However, lust could also mean other forms of unbridled desire, such as for money or power (source: Wikipedia). In organizational terms: just wanting to succeed so badly, you are going in with all you’ve got.

Organizations that want to succeed so badly, they abandon all reasoning and research and just go for it. Sometimes even against all odds, signs and advice from others. Sooner or later, these organizations fail because of their lack of focus and strategy, and packup and leave. Or file for bankruptcy. 

Keeping a steady head is crucial. Acknowledging that your organization really needs a win right now, but that you cannot simply force it to happen can temper the lust for success and allow you to take a step back, count your losses, refocus and keep a steady head.

Hudson’s Bay announced their entering of the Dutch market in 2017 with a lot of drum rolls and high expectations, but failed to succeed. Not a single store (including online) made at least a snippet of profit and the Canadian retailer abandoned ship in late 2019. The problems were mostly attributed (by outsiders) to a lack of research and understanding of the Dutch market and failing to tailor the stores to the Dutch consumers. Forcing real estate owners and suppliers to accept harsh conditions did not help either; at the timing of writing Hudson’s Bay still faces legal action over long term rental contracts which could result in paying 20 years of rental fees.

3. Gula (gluttony)

Gluttony is the overindulgence and overconsumption of anything to the point of waste. The word derives from the Latin gluttire, to gulp down or swallow. One reason for its condemnation is that gorging by the prosperous may leave the needy hungry (source: Wikipedia).

Through wanting more and more and more, organizations can fail to properly identify their strategy, competitive advantage and (niche) market. Causing alienation with their customers and lack of overlap between brands, markets and subsidiaries.This can happen to organizations with an aggressive acquisition “strategy”.

Trying to keep all the balls in the air whilst gulping up even more small players can result in exorbitant costs and loss of identity (with employees and customers) or quality (of product/service provided). Controlling your appetite by asking yourself: which small players should we buy, instead of asking: do we buy this yes/no with each opportunity. This way you can align opportunity with strategy and actually create synergy and benefits.

Although few people owned one, everyone knows about Hummer. Their huge vehicles dominated the street wherever they appeared because of their sheer size. Which was also the problem: they required so much petrol (gasoline) that consumers quickly backed out. The cars were very expensive to drive and the environmental toll was too heavy for many a conscience. So this organization was not greedy in the sense described above but more in a practical way; it did them in anyhow because nowadays Hummer only builds military SUVs.

Both Enron and Worldcom would fit into the general gluttonous description: Worldcom had an aggressive growth through acquisition strategy and felt that its share price should always keep up with the growth of the company. This failed and several high ranking employees cooked the books to fool investors. Obviously this did not work out (read Cynthia Cooper’s book if you would like to know more) and tens of thousands lost their jobs. Enron pulled a similar trick; both companies had Arthur Andersen as an external accountant. That firm does not exist anymore either.

4. Avaritia: greed

Also known as avarice, cupidity, or covetousness, greed is, like lust and gluttony, a sin of desire. However, greed is applied to an artificial, rapacious desire and pursuit of material possessions. In Dante's Purgatory, the penitents are bound and laid face down on the ground for having concentrated excessively on earthly thoughts. Hoarding of materials or objects, theft and robbery, especially by means of violence, trickery, or manipulation of authority are all actions that may be inspired by greed (source: Wikipedia).

Organizations that suffer from greed simply never have enough. Also, others can never have too little. A monopoly could not satisfy them. Not unlike gluttonous and lustful organizations, they will go after what they want and will stop at nothing to get it.

Organizations like these run themselves into the ground sooner or later. An unsatisfiable desire often causes fraud, embezzlement, intimidation and theft and will not last long. Madoff’s pyramid scheme only lasted so long because he did not overdo it; but it did not last forever. The most damaged participants are usually employees and investors; sometimes neighbours or entire communities suffer from greedy organisational behaviour.

Do you find yourself contemplating illegal, immoral and/or unethical actions in order to achieve your goal? Or maybe you recognize this behaviour with certain colleagues. Having a set of firm organisational values that are reiterated continuously and involved in every (major) decision can help staying on the right path. E.g. Triodos bank is rumoured to consider the environment, community and other non-financial impact areas when makes decisions and testing these against their values; even when purchasing office supplies.

Although Worldcom and Enron would fit with this sin quite well, I am going for Worldonline ($3.8 billion fraud scheme) and World Online: a Dutch start-up that fooled investors by hyping up its IPO price. After a few months it turned out that owner and initiator Nina Storms (then known as Nina Brink) had sold her stocks before the IPO even happened at a lower price than the IPO price. Many individuals lost their savings.

Also, never combine the words World and Online in your company name.

5. Acedia: sloth

Sloth ("without care")) refers to a peculiar jumble of notions, dating from antiquity and including mental, spiritual, pathological, and physical states. It may be defined as absence of interest or habitual disinclination to exertion. The scope of sloth is wide. Spiritually, acedia first referred to an affliction attending religious persons, especially monks, wherein they became indifferent to their duties and obligations to God.

Mentally, acedia has a number of distinctive components of which the most important is affectlessness, a lack of any feeling about self or other, a mind-state that gives rise to boredom, rancor, apathy, and a passive inert or sluggish mentation. Physically, acedia is fundamentally associated with a cessation of motion and an indifference to work; it finds expression in laziness, idleness, and indolence (source: Wikipedia).

Laziness, not the same as relaxing, can stem from many origins but is never helpfull in entrepreneurial endeavours. Many companies ceased to exist because they failed to innovate, failed to research their client base; they simply failed to act and put in the extra mile. Your competitors will swiftly move in and take your share of the market if you fail to keep up with demand or innovations. Better yet, be the innovator and lead the pack.

Kodak, once a synonym with photography stayed still instead of taking the risk of cannibalizing its own market. They acquired the first company to invent a digital camera but shelved it, thinking that people wanted to print pictures at home and share them physically, instead of through the internet. National geographic: refused to start their own tv channel, an idea that was later founded as Discovery Channel. Their later tv channel could not compete with Discovery’s success. Hudson's Bay Dutch adventure would also fit here.

6. Ira: wrath

Wrath can be defined as uncontrolled feelings of anger, rage, and even hatred. Wrath often reveals itself in the wish to seek vengeance. In its purest form, wrath presents with injury, violence, and hate that may provoke feuds that can go on for centuries. Feelings of wrath can manifest in different ways, including impatience, hateful misanthropy, revenge, and self-destructive behavior, such as drug abuse or suicide (source: Wikipedia).

This sin can either be dealt by an organization, by ruining a competitor, or it be the victim, through social media: the cancelculure and SJW’s are examples of that. Reputations can be ruined, highly functioning employees can be whisked away but ultimately, both sides will suffer because effort and energy will be directed towards the wrath, instead or organisational success, operational excellence etc.

Controlling wrath can be done through focusing on your own goals and responding with dignity to provocations, humiliations and back-stabbing behaviour.

Arthur Andersen was briefly mentioned before: as the external accountant for two companies now known for fraud of gigantic proportions, AA failed to perform the very job they were hired to do and consequently suffered society’s wrath.

7. Invidia: envy

Envy, like greed and lust, is characterized by an insatiable desire. It can be described as a sad or resentful covetousness towards the traits or possessions of someone else. It arises from vainglory,and severs a man from his neighbor. Malicious envy is similar to jealousy in that they both feel discontent towards someone's traits, status, abilities, or rewards. A difference is that the envious also desire the entity and covet it. Dante defined envy as "a desire to deprive other men of theirs". In Dante's Purgatory, the punishment for the envious is to have their eyes sewn shut with wire because they gained sinful pleasure from seeing others brought low (source: Wikipedia). 

Desiring what another has can cause wrath, but also copycat behaviour. Trying to imitate what others are doing can work out (looking at Aliexpress here), but it usually does not last long. Often the original remains more coveted than any copy. Original ideas and solutions are appreciated by consumers; copies can damage your reputation severely and claim a place in the market that you do not want: that is, below your competitor that you so envy.

Harvard Business Review published an article on envy at work. However on a strategic level, instead of copying your competitor, figuring out why they are successful and then implementing that in your own way is usually a better path to success.

Adidas en Puma are sportswear brands from pre-nazi Germany founded by two brothers; they used to work together but had falling out and have been fierce competitors ever since. Even their hometown is divided into two camps. Although these have been quite successful, I wonder whether Nike would have stood a chance if there only was one Adima/Pumas.

Artwork through Unsplash