Page 134 - MS Year in Review 2020

Based upon our research and experience, the finding is that all business

organizations must manage both dimensions in order to be
successful. However, the underlying cause of the “Icarus Syndrome” is the failure
of leadership to manage both dimensions required for sustainable organizational

success. The classic problem of rapidly growing organizations is in their focus on the
product dimension, they tend to neglect the organizational or infrastructure
dimension. This is what causes the growing pains and ultimately can lead to their

demise.

In the short term, an organization can cope with its growing pains by using the
extraordinary revenue that always accompanies “Dazzling Success” to “mask” its

problems. However, in the long run that “extraordinary revenue” will always be
dissipated from increased competition or internal operating problems, leaving the
organization vulnerable to problems without the “extra” resources to cope with

them or mask them.

THE NEAR-DEATH EXPERIENCE OF WESTFIELDS 118

On October 24, 2007, Frank Lowy, Chairman of the Westfield Group (“Westfield”)

addressed a group of the most senior leaders of Westfield at a dinner in Sydney,
Australia in connection with a “graduation” from Leadership Development
Program. 119 The dinner took place on Lowy’s yacht in Sydney harbor. The author

(Eric Flamholtz) was serving as co-Faculty Coordinator for this program and was in
attendance at this dinner. He expected Lowy to talk about Westfield and its great
strengths and promising future. However, Flamholtz was astounded when Frank

Lowy chose not to discuss the strengths of Westfield but to reflect back on the
company’s greatest moment of crisis.

118 This section is adapted from Eric Flamholtz and Yvonne Randle, is The Crisis Leadership Playbook,
Vandeplas Publishing, 2020.
119 Presentation by Frank Lowy to attendees of the UCLA-Australian Graduate School of Management
“Westfield Executive Development Program,” October 24, 2006, Sydney, Australia.

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