Principles

When company growth stalls, a strategy day is often organized.

The leadership analyzes the market, articulates a new vision, sets subsequent goals, and develops an action plan.

The result includes new customer segments, products, markets, projects, and metrics.

Everything seems to be changing.

But after the strategy day, most of the old work continues.

The same customers receive the same exceptions.

The same projects consume people's time.

The same products require development and support.

The same leaders protect their own budgets.

The same metrics direct employee behavior.

A new strategy does not replace the old one.

It is layered on top of the existing company structure.

The result is not a new direction.

The result is more work, more priorities, and even less focus.

Strategy is not a list of new activities

Companies tend to treat strategy as the question: what should we do next?

Equally important is asking: what will we stop doing?

If a company decides to enter a new market, it must decide where the money, people, and leadership attention for this effort will come from.

If a new product is desired, there must be a decision on which old development efforts will not proceed.

If a new target audience is chosen, a decision must be made about whether existing customers will continue to be served in the same way.

If a company wants to change its business model, it cannot simultaneously protect all of the rules and structures of the old model.

Strategy is an allocation of resources and attention.

If something new does not receive real time, money, or decision-making authority, it is not strategy.

It is merely a wish.

An old strategy does not disappear simply because a new one is announced

Strategy resides in more than just a document.

It is embedded within the organization.

The old strategy continues to live on:

• in products;
• in customer contracts;
• in pricing;
• in processes;
• in software systems;
• in people's competencies;
• in job roles;
• in departmental budgets;
• in metrics;
• and in leaders' authority and responsibility.

When leadership announces a new direction but fails to change these underlying elements, the organization continues to operate according to its old logic.

People do what their roles, tools, and metrics direct them to do.

It is not enough simply to tell people a new story.

If a sales team is still measured by revenue from an old customer base, they will continue selling to that same customer.

If the bulk of product development effort stems from exceptions related to legacy solutions, genuine capability for the new product cannot emerge.

If every new decision requires approval through the old management structure, the company's speed does not change.

A new strategy only begins to work once the old strategy has lost its resources.

The old strategy may have been entirely correct

Abandoning the past does not mean that a previous decision was wrong.

The strategy could have been right in its original context.

It helped the company find its first customers, grow revenue, build a team, and reach today's position.

But markets change.

Customer needs evolve.

Technology reshapes competition.

Company size and cost structures shift.

What worked as craftsmanship in early stages becomes too expensive at scale.

A founder-led sales model may not transfer to the broader organization.

Previously profitable customers may increasingly demand bespoke solutions.

The fact that a strategy once worked does not prove it will continue to work.

Management quality is not demonstrated by how long one can defend an earlier choice.

It is shown by the ability to recognize when the assumptions underlying that choice no longer hold true.

Abandonment feels like a loss; addition is growth

Starting a new project generates energy.

We can talk about opportunities, growth, and the future.

Ending old activities raises uncomfortable questions.

Why did we invest in this at all?

What do we tell our customers?

What happens to people whose roles are tied up with that activity?

Does leadership admit that their previous choice no longer works?

That is why it's easier to add something new than to end something old.

A new product launches alongside the existing one.

The same team tests a new market while continuing current work.

A new process gets added to the existing workflow.

New software goes live, but the legacy system isn't shut down.

The company appears to be growing, yet its complexity outpaces our capability faster than we can manage it.

True strategic change often looks like reduction at first.

Fewer projects.

Fewer target audiences.

Fewer exceptions.

Fewer products.

Fewer activities done simply because they've always been done that way.

Sunk Costs Do Not Make an Old Strategy Righter

The more a company invests in one direction, the harder it becomes to abandon that path.

The product is almost ready.

People have been hired for the new market.

A great deal of money has gone into software development.

Promises have been made to customers.

The project leader's reputation is tied up with its success.

Therefore, a decision is made to invest just a little more.

One more feature.

One more campaign.

One more salesperson.

Another quarter.

But money already spent cannot be recovered by either continuing or stopping.

This should not dictate the next investment decision.

The right question is not: "How much have we put into this so far?"

The right question is: "If we knew everything we know today, would we start this again from scratch?"

If the answer is no, it must be clearly explained why the company continues anyway.

Past investments should never become a justification for demanding future ones as well.

People Who Depend on the Old Strategy Protect It

Strategic change is not merely a business decision.

It also alters roles, influence, and status within an organization.

When an old product is discontinued, the importance of certain departments may diminish.

If a company shifts to serve another customer segment, past sales leadership experience may no longer be equally valuable.

When processes are automated, jobs built around which entire teams have formed can disappear.

When decision-making moves closer to operations, some leaders lose control over their domain.

People do not always consciously resist new strategies.

They may simply present very strong reasons why old activities must continue:

Existing revenue streams.

Customer commitments.

Technical dependencies.

Market risks.

All arguments may be entirely valid.

The leadership's task is to distinguish between the company's interest and self-preservation of existing structures.

If strategic change does not alter anyone's priorities, responsibilities, or resources, it may not constitute a genuine transformation at all.

The hardest thing is to quit what still works a little bit

It's easier to stop a strategy that has completely failed.

The most dangerous model is one that still works well enough.

Revenue comes in.

Some customers are satisfied.

The team knows how to do the work.

The company isn't in immediate crisis.

However:

• growth has stalled;
• profitability declines;
• acquiring new customers becomes more expensive;
• servicing requires more exceptions;
• top people spend time maintaining the old system;
• competitors solve the same problem more simply;
• customers would no longer choose this solution today.

The old model generates enough money to delay change, but not enough for tomorrow to move the company forward.

In such a situation, focus often shifts to optimization.

Costs are cut.

Sales targets are raised.

Campaigns are improved.

Features are added.

Optimization can extend the lifespan of an outdated strategy.

It does not make it right again.

The biggest competitor to a new strategy is today's revenue stream

A new direction starts small, uncertain, and inefficient.

The old business has been optimized for years. It has customers, processes, a team, and proven revenue.

If the new and the old are evaluated solely based on current sales or profit, the old model will always win.

Therefore, a new strategy requires consciously protected resources:

• a guaranteed budget;
• clear ownership;
• time;
• decision-making authority;
• appropriate metrics;
• an agreed-upon trial period.

At the same time, we must not allow the new strategy to become an endless side project.

It is essential to define:

• what assumption is being tested;
• what outcome should result;
• over what timeframe;
• how much investment can be made; and
• under what conditions the direction will change or the experiment will end if results are not achieved.

A new strategy needs room to breathe.

It does not need justification for existing indefinitely without producing results.

Strategy fails when leadership tells no one anything

A new direction almost always requires breaking someone's expectations.

Some clients will no longer receive bespoke solutions.

Some leaders will lose projects.

Some employees must learn a new job or switch roles.

Some investors or owners must accept short-term deterioration in results.

Some long-developed ideas will remain unfinished.

If leadership tries to maintain all existing agreements while simultaneously moving toward a new direction, strategic change does not occur.

A compromise emerges where the old and new models work against each other.

Strategy requires the courage to make choices with visible costs.

If no decision entails giving something up, nothing has truly been chosen.

How to tell if a company is holding onto the past too long?

An old strategy may have become an obstacle to growth when:

• new growth efforts are pursued alongside existing customers, products, and processes;
• the organization has more priorities but no additional resources;
• legacy products consume most of development capacity;
• new projects consistently receive less attention than current issues;
• leadership speaks about the future while budgets protect the past;
• declining results are attributed solely to market conditions and competitors;
• existing activities continue primarily due to prior investments;
• no one can identify which actions will be replaced by the new strategy;
• the same projects drag on year after year;
• a new strategy is measured using legacy metrics;
• decisions to discontinue initiatives are delayed because "now isn't the right time";
• leadership cannot name what the company consciously stopped doing.

The clearest sign is when implementing a new strategy immediately increases employee workload.

This usually means that old work has not been completed.

Abandonment Does Not Mean Careless Destruction

Letting go of an old strategy does not have to be a sudden or emotional decision.

The company has customers, employees, contracts, and the need for cash flow.

Change must be managed.

First, it is necessary to distinguish:

• which former activities continue to generate essential revenue;
• which build important capabilities for the future;
• which are merely habits;
• which destroy value that already exists;
• which obligations must be properly concluded;
• which parts of the old model support the new strategy.

Sometimes, it is necessary to consciously keep an existing business running for a while in order to fund something new.

This is reasonable.

However, in such cases, the role of the former activity must remain clear.

Is it the future of the company?

Or merely temporary cash flow upon which the future will be built?

If this distinction is not made, the old business will always capture all attention.

Strategic disengagement requires a concrete plan

"Saying we should focus less on this" does not accomplish anything.

The decision to disengage must change how work is organized.

1. Articulate which assumption no longer holds true

What has changed in the customer, market, technology, costs, or the company's own capabilities?

2. Decide exactly what will be stopped

A product, customer segment, project, feature, exception, process, or investment.

3. Set an end date for discontinuation

Without a deadline, old activities continue indefinitely.

4. Map dependencies

Which customers, people, systems, and contracts require transition?

5. Define where freed resources will move

If money and people's time do not shift to a new priority, some other legacy activity will quickly consume them again.

6. Change metrics

People cannot be steered toward a new strategy if their performance is evaluated according to the old logic.

7. Communicate the rationale for the decision

People must understand why work that was previously important no longer serves the company's future.

8. Do not reopen the decision after every difficulty arises

A new strategy creates uncertainty at first. If we revert to the old model with every problem, the new direction can never truly take off.

Courage does not mean reckless risk-taking

A leader need not abandon past decisions merely to appear decisive.

Strategic courage is not a blind leap into the unknown.

It is the willingness to examine facts even when they contradict prior judgments.

When necessary, one can:

• conduct limited trials;
• proceed in stages;
• temporarily maintain two models simultaneously;
• reduce irreversible commitments;
• establish clear criteria for continuation and termination;
• protect essential funding streams.

However, a cautious transition and avoiding decisions are not the same thing.

A prudent enterprise knows precisely what evidence warrants changing course.

An avoidance-prone organization gathers evidence but merely postpones decision-making after each new result without ever acting on it.

A New Strategy Must Change Today's Calendar

Strategy does not live in leadership presentations alone.

It lives in people's calendars, budgets, and daily decisions.

If a new strategy is genuine, it should be possible to see:

• which meetings have ended;
• which projects were paused;
• which clients are no longer priorities;
• where the budget has shifted;
• whose responsibilities changed;
• which old metric was removed;
• what new capability received time and attention;
• which activities are no longer being performed.

If people's work does not change after a strategy is approved, the strategy has not been implemented.

The organization heard the new message but continued operating under the old system.

Most companies do not suffer from a lack of ideas

They typically have more opportunities than they can utilize.

What is missing is not a new vision, a new market, a new product, or the next project.

What is lacking is clear choice.

Which existing activity no longer takes us toward where we want to go?

From which revenue stream are we willing to withdraw in order to build a better model?

Which previous investment needs to be written off?

Which project no longer deserves people's time?

Which role or structure protects today's outdated logic?

Crafting a new strategy is easy.

Far more difficult is giving it real space.

To do this, we must stop the work that keeps the old strategy alive.

Most companies do not yet need another future plan.

They require courage to acknowledge which part of their past cannot accompany them into the future anymore.

Mikk Orglaan

Challeng.ist