When Strategy Becomes Dogma, Leadership Dies
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In a recent Farnam Street newsletter, Shaun Parrish shared the following idea.
“The problem with success is that it teaches you the wrong lessons. What worked yesterday becomes religion, and religions don’t adapt.”
I understand the point being made, but the either/or nature of the statement misses a key point. Change occurs in two ways: evolution or mutation. When churches face a theological crisis, the response is often schism. They break apart. New doctrines emerge. Both entities then adapt to their new reality. This is why there are thousands of different Christian denominations in the world today.
The same things happen to businesses. When a business strategy becomes so ingrained that it becomes dogma, companies struggle or disappear entirely. This rigidity prevents the organization from seeing when it is time for The Second Curve.
The first curve represents current state. The life cycle of any business activity typically evolves from inception to growth, maturity, and ultimately decline. When the focus on the first curve becomes too ingrained, no one sees the need for the second curve.
Kodak provides a cautionary tale that illustrates the point. Leadership was so immersed in traditional film that they could not see the coming decline. The fear of undermining the film revenue was another factor. By the time they tried to move to digital, it was too late. In essence, Kodak’s mission was focused on selling and developing celluloid film.
Netflix shows how to maintain focus while still adapting to capitalize on new opportunities. In the beginning, Netflix existed to deliver DVDs to customers via the mail. When they saw a second curve, they adapted to delivering licensed content via streaming. They saw the next curve and added content creation to supplement licensed content. The simplest view of their mission statement is “Netflix delivers quality content to customers.”
Change is a constant fact of life. Companies that look to the future and adapt succeed. Those that do not get left behind. As leaders, our job is to build teams that keep their heads in the game and understand when it is time to play a different game.
Related Articles
Everything Else is Secondary | Farnam Street
Why does Christianity have so many denominations? | Live Science
Top 15 Fortune 500 Companies by Revenue 1955-2020 | YouTube
Kodak's $31B Innovation Gap: Why CMOs Must Connect R&D with Brand Strategy | Design Rush
Chips and Salsa: Snack-sized news and posts
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Healthy aging is a choice.
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There are too many articles like this one that take old ideas and repackage them as new. The ideas in this article were documented in David Gelles’s 2022 book, The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy. I wrote about this book and the role of the modern CEO in a December 2022 newsletter.
How Jack Welch Broke Capitalism and Shattered the American Middle Class | Medium
The national debt is a topic I have been writing about since last October. In multiple newsletters, I have called out both Democrats and Republicans for failed leadership since President Clinton left office in 2001. Articles like these are becoming much more frequent.
In Trump’s year of cost-cutting and efficiency, national debt soars past $37 trillion | Fortune
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This is a frightening thought. I wonder if it is time for significant insurance reform.
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Who bears responsibility when false information leads to real harm?
My musical tastes are all over the map. Ken Burns produced a documentary on the history of country music. It was not his best, but it was very interesting.
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Quotes
“In life the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.”
- Kwame Anthony Appiah
“Thankfully, dreams can change. If we'd all stuck with our first dream, the world would be overrun with cowboys and princesses.”
- Stephen Colbert
“One sometimes finds what one is not looking for.”
- Alexander Fleming
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I write about leadership in business and life. I am a certified M&A Specialist and Leadership coach. My perspectives are based on my 40+ year career working with leaders from around the world at over 100 companies.
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You can order The Leader With A Thousand Faces on my website’s Recommended Reading Page. This page also has links to purchase the books discussed in this and previous newsletters.
