My parents told me many times while I was growing up that ‘pride comes before a fall.’ I am very often reminded of the truth of this aphorism in my later life. Whenever I think that I am getting the hang of ice-skating backwards, for example, I will almost inevitably promptly fall over. Exploring some tombs near the pyramids at Giza after attending a conference in Cairo recently, I fancied myself as a modern-day Indiana Jones, striding over the dunes and uncovering lost treasures. Until, that is, I forgot to duck low enough going through an ancient doorway and struck my head on a 5000-year-old door lintel - which was inscribed with hieroglyphs which I now imagine spelled out ‘Mind Your Head.’ Being momentarily poleaxed, I fell down and badly twisted my knee. Pride, once again, came before a literal fall.
Even Luke Skywalker can be prone to the sin of pride. In the original Star Wars film, he begins to enjoy shooting down Tie-fighters above the surface of the Death Star from the Millennium Falcon’s gun turret: Han Solo tells him, “great kid, but don’t get cocky.” That’s great advice to anyone (even someone who lived a long time ago, in a galaxy far, far away) who thinks that things are going well: don’t get cocky kid.
In our galaxy, this, of course, is not a new concept. In ancient Greek tragedy, hubris is the personality trait of extreme pride, overconfidence or arrogance, which invariably leads to the downfall or nemesis of that person. The Bible’s Book of Proverbs states ‘pride goeth before destruction, a haughty spirit before a fall.’ It seems that to act hubristically, with overconfidence, arrogance and a lack of humility has been a common facet of human personality for thousands of years.
In the British General Election that has seemingly confirmed that Brexit will happen at the end of January 2020, one of the minor party leaders, Jo Swinson, started the campaign by declaring that she could be the next Prime Minister. Not only did her party lose a number of seats, but she personally was defeated - and so was obliged to stand down as her party’s leader. It is possible that her initial boast - or possible delusion - actually led to her downfall and to the downfall of her party.
Perhaps we feel a sense of schadenfreude - pleasure in another’s misfortune - when nemesis comes about. When a Ferrari, Porsche or McLaren passes you on the motorway or autobahn at 200km/hr, sometimes it can be hard to suppress a smile to see them pulled over by the cops further down the road.
The Curse of Sports Illustrated is perhaps another example of hubris: Many teams and sportsmen that are featured on the cover of that magazine for having excelled at their sport then find that they become injured or rapidly lose form. Perhaps it’s just reversion to the mean (in performance) - but there are many examples of it happening.1 It’s possible to see this reversion to the mean in the performance of ‘star’ fund managers who have a few stellar years of performance, rake in lots of funds and then crash and burn, losing everyone’s money in the process (but usually getting paid themselves all the same).
The gypsum and insulation industries have been mercifully hubris-free in the recent past. The thing to watch out for, now and in the future, is a company that swallows its competitors despite inflated valuations, imagining that bigger is always better whatever the price. Indeed, some of the deals that have been done that look good now might not look so good if there is a prolongued downturn in the near future. Additionally, what might haved looked like a good acquisition target might have skeletons in its closet that make an apparently cheap deal expensive in the longer term (just think asbestos liabilities).
What might the industry look like if everyone acted with humility? Perhaps competitors might recognise the ultimate futility of fighting against each other (in a finite market), and make a much earlier tie-up (at more realistic valuations), in order to enjoy more synergies and savings (and profits). Perhaps today’s competing companies might combine their capacities, closing the most expensive and/or least profitable plants, and concentrate on making products with lower environmental impact and highest profitability. It requires some humility on the parts of the participants in any deal, but everyone would win in the end.
On the other hand, it can be argued that these markets are not finite and that a canny manufacturer can make its own demand (think of those companies that educate installers to use their products). Insulation has so much potential that its market is practically infinite.
In any case, if pride comes before a fall, then perhaps humility comes before success.
1 https://en.wikipedia.org/wiki/Sports_Illustrated_cover_jinx
