On a PBS program several years ago, an audiologist presented findings of significant hearing damage to a fan of loud music. The music enthusiast reviewed the researcher’s findings and came to his own conclusion: he would have to install more powerful amplifiers in his car. The researcher – and everyone who watched the program, I’m sure – stared slack-jawed as the music-lover thanked the audiologist for discovering that he would have to listen to music much louder to compensate for the hearing damage loud music had caused. Obviously, people hear what they want to hear, even if they cannot hear very well.

I’ve noticed that we often misinterpret cautionary tales. We say someone has “the Midas touch” when they experience frequent success, even though the story of King Midas is the story of a curse. Midas was already wealthy and successful when he greedily sought more. His “golden touch” destroyed everything he loved. To me, the story of King Midas is more than a warning against greed; it’s a reminder that fortunes are lost in the good times, when self-confidence crosses the line into hubris.

Good judgment and frugality can be the first casualties of success, for both companies and individuals. We’ve all heard about prizefighters and lottery winners who go bankrupt shortly after winning millions. And many of us have experienced the strange phenomenon that no matter how quickly our income increases, our expenses rise just as fast. A little bit of success gets people thinking everything they touch will turn to gold. So individuals start buying fancy cars and summer homes, and companies start buying fancy buildings and other companies.

On the one hand, it’s perfectly appropriate for successful entrepreneurs to throw some loose nickels around and invest in prospective opportunities. On the other hand, one must maintain a habit of frugality with both money and self-congratulatory pride. We want our businesses to grow, but as Edward Abbey said, “growth for the sake of growth is the ideology of the cancer cell.”  More important to the success of our business is that we grow as leaders by admitting our mistakes and learning from them.

Peter Lynch (One Up on Wall Street, Simon & Schuster, 1989) coined the term “diworsification” to describe a company’s self-destructive tendency to expand into realms beyond its competency. How many bankrupt companies have started a turnaround by declaring that “from now on we’re going to stick to the knitting.” Except for excessive pride, they might have stuck to their core competency in the first place.

King Midas, having turned all his food and even his beloved daughter to gold, begged the gods to save him from his “gift.” They did, and although he no longer had “the Midas touch,” he regained his quite satisfactory life as a just king and loving father, but with a little bit more wisdom as well.