Icarus Factor

What Is the Icarus Factor?

The Icarus Factor is a term for what happens when business leaders start an excessively aggressive project that doesn't succeed, in this way hurting the company's financial wellbeing. Powered by fervor for the project, the executives can't get control over their off track energy before keeping away from failure is too late.

Understanding the Icarus Factor

In Greek folklore, Icarus and his dad, Daedalus, were detained in Crete by King Minos. Daedalus made two arrangements of wings produced using wax and plumes. He and his child were to utilize them to escape by flying. Daedalus cautioned his child not to fly too close to the sun. Icarus was overwhelmed with the fervor of flying and dismissed his dad's warning. He flew increasingly high, moving toward the sun. As the wax liquefied and the quills fell, Icarus tumbled to his death in what is presently called the Icarian Sea, close to Icaria, an island southwest of Samos.

The Icarus Factor is essentially seen when companies blast through businesses that work on various models from their existing lines. As they spend increasingly more money to try and make up for lost time to different companies currently predominant in those fields, they go through the cash reserves developed by their core business. This drain, in the event that not done as expected, can some of the time be deadly, causing unsalvageable harm to the company and its overall financial wellbeing.

The Icarus Factor: Why Take the Risk?

It's a competitive world out there, with companies diversifying their product and service lines or converging with different companies. This can hugely affect the marketplace and on purchasers' preferences and habits. What's more, by taking the risk, many companies are just trying to remain ahead of the competition.

That is the reason it's not shocking that a few companies move too soon on a project, innovation, or some other type of investment. In any case, by going into it aimlessly and trying to arrive at their goal (and without doing the legitimate research), business leaders might wind up losing sight of important factors like costs or future issues with the project. This can all immensely affect different parts of the business or on the company as a whole.

Illustration of Icarus Factor

Some of the time a company can turn out to be so dazed by its position in the market that it can get itself in a position for disappointment. India's Kingfisher Airlines began operations in 2005 as a public limited company, and initially had the second-biggest share in the country's domestic travel market. The company was owned by United Breweries Group.

Six months after it started flying, the company made an announcement that it would send off a initial public offering (IPO) to raise capital to grow and conceivably take over different airlines. Be that as it may, the company was purportedly in debt and kept on stacking up losses, notwithstanding securing one more modest airline in 2007 and extending to remember departures from India to the United Kingdom for 2008. The company was tormented with issues, including the loss of prime flying openings and workers fighting over postpones in salaries.

Features

• The Icarus Factor is fundamentally seen when companies blast through businesses that work on various models from their existing lines.
• The Icarus Factor is a term for what happens when business leaders start an excessively aggressive project that doesn't succeed, in this way hurting the company's financial wellbeing.
• Pressure from contending businesses frequently pushes companies to enhance new lines before they're prepared; in the event that these are rashly sent off or over-put resources into, the Icarus Factor keeps them from becoming effective.