According to Fortune, Workday CEO Carl Eschenbach has built his leadership philosophy around a simple but powerful principle: “There is nothing more dangerous than yesterday’s success.” The CEO of the $62 billion software giant revealed this as his “first rule of survival” in an interview earlier this year, emphasizing that leaders must avoid lingering on past victories despite the natural temptation to replay successes. Eschenbach brings substantial credibility to this perspective, having grown VMware from 200 employees to over 20,000 and increased revenue from $30 million to $7 billion during his 14-year tenure. The strategy appears to be working at Workday, where total revenues have reached $2.35 billion, representing a 12.6% increase from the second quarter of fiscal 2025 according to the company’s latest financial results. This mindset echoes similar approaches from Amazon’s Jeff Bezos and Walmart’s Doug McMillon, creating a compelling case for why forward-focused leadership separates enduring companies from temporary successes.
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Table of Contents
The Innovation Paradox That Dooms Successful Companies
What Eschenbach identifies touches on one of the most persistent challenges in business history: the innovation paradox. Companies achieve success by perfecting a particular business model or technology, then become prisoners of that very success. The organizational structures, reward systems, and cultural norms that enabled initial victories become barriers to the next wave of innovation. This phenomenon explains why enterprise software companies like Workday face particular vulnerability – their business models depend on long-term contracts and stable customer relationships, creating institutional resistance to disruptive changes that might threaten recurring revenue streams.
The Psychological Traps of Past Success
Beyond organizational inertia, successful leaders face cognitive biases that Eschenbach’s warning directly addresses. Confirmation bias causes executives to seek information that validates past decisions rather than challenging them. Success-induced overconfidence leads to underestimating new competitors and market shifts. Perhaps most dangerously, the sunk cost fallacy makes companies double down on strategies that brought past success even when market conditions have fundamentally changed. Eschenbach’s diverse background spanning operational roles at Dell and VMware to venture capital at Sequoia gives him unique perspective on these traps, having seen companies from multiple angles throughout his 35-year career.
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Enterprise Software at a Critical Crossroads
Workday’s position in the enterprise software market makes Eschenbach’s philosophy particularly relevant right now. The industry faces simultaneous disruption from AI, changing workplace dynamics, and evolving security requirements. Companies that dominated the previous era of cloud computing now risk being disrupted by AI-native platforms. For a CEO leading a publicly-traded company with massive existing revenue streams, the temptation to optimize existing products rather than cannibalize them with new approaches represents exactly the kind of “yesterday’s success” danger Eschenbach describes.
Beyond Business: A Principle for All Leaders
While Eschenbach’s comments focus on corporate leadership, the principle applies far beyond business. The same dynamic affects political leaders, educational institutions, non-profits, and even individual careers. The mechanism remains consistent: past approaches that generated success become embedded in culture and process, while the external environment continues evolving. The most dangerous aspect is that the very metrics used to measure success often become part of the problem – they’re designed around yesterday’s definition of winning rather than tomorrow’s emerging opportunities.
Turning Philosophy into Practice
The real challenge lies in implementation. Many leaders acknowledge the danger of resting on laurels, but few build organizations that systematically prevent it. Effective approaches include creating separate innovation units with different metrics and leadership, implementing formal sunset processes for successful products before they decline, and building cultural rituals that celebrate learning from failures as much as celebrating successes. Eschenbach’s emphasis on “focus on the significant impact of others” suggests he understands that sustainable forward momentum requires distributing leadership throughout the organization rather than concentrating it at the top.
Why This Principle Endures Across Eras
What makes Eschenbach’s warning particularly compelling is its validation across different industries and time periods. From Amazon’s constant reinvention to Walmart’s evolution from brick-and-mortar giant to e-commerce competitor, the pattern holds true. The companies that endure aren’t necessarily the first movers or the most technologically advanced – they’re the ones that maintain what psychologist Carol Dweck calls a “growth mindset” at the organizational level. In an era of accelerating technological change, this principle becomes increasingly critical for survival, let alone continued success.
