For the article I chose, I would say the trap was The Sporadic-Innovation Trap. Some companies do not have a system for creating a pipeline of new advantages. Innovation is an on-and-off-again process that is driven by individuals making it extraordinarily vulnerable to swings in the business cycle (McGrath, 1).

CEO Masayoshi Son invests in everything that seems profitable to him. This article speaks about him pledging to his company that he would restrain his investments. He and his firm lost $38 billion from SoftBank's latest giant fund into 183 companies last year (2). According to the article, Gary Rieschel states when Mr. Son believes something is the future, he will take everything he has and bet it on that (2). There were some discussions about Vision Fund 1 and Vision Fund 2 investments and that there were a lot of losses in Vision Fund 1. Mr. Son was optimistic that his investments would pay off but some of his colleagues did not agree.

What were the impacts that resulted from falling for the trap?

For Mr. Son, it was an embarrassment. There were times he had to go back to his company and admit he made a mistake and that the lesson was a harsh one. For others, he had to pledge he would restrain himself from making quick investments. Some of his top investing partners left his firm.

Drawing guidance offered by Sherman in Chapter 6, what could they have done differently to avoid the trap?

I am not sure if avoidance is the correct word but one thing Sherman states in chapter 6 is the CEO needs to own the strategy and, in this article, Mr. Son, CEO did own his strategy. He was not creating anything new, but he was investing in what he thought would be beneficial to his company. His investments did not stop. Some of his investments paid off and it attracted investors to his company. Maybe he did not give much thought to what would happen if those investments did not pay off. He did not shy away from loss but met them head-on and continued to invest in what he thought would benefit his company.

Patricia

Reference:

1. McGrath, Rita. Transient Advantage. Harvard Business Review. https://blackboard.strayer.edu/webapps/blackboard/execute/blti/launchLink?course_id=_476130_1&content_id=_39680744_1
2. Brown, Eliot. SoftBank Emerges as a Big Loser of the Tech Downturn. Again. SoftBank Emerges as a Big Loser of the Tech Downturn. Again. - WSJ
3. Sherman, Leonard. If You're in a Dogfight Become a Cat.