We talk a lot about bad strategy, but usually with the benefit of hindsight. The truth is, most strategies that destroyed companies weren’t obviously flawed at the time.
They had logic. They matched past wins. They looked good with past data.
What made them fail wasn’t the idea. They made an incorrect guess and failed to adapt when the conditions changed.
Let’s face it, things always change, but not necessarily that quickly.
For example, I had $2,000 in 1995 that I wanted to invest in the stock market. I had narrowed it down to two companies. Apple, because I had the original Macintosh Classic computer, the first computer I ever bought in college back in 1989. I always liked their products back then. The other company was Salton, a kitchen appliance company that had just introduced the George Foreman Grill, and I liked that product. It was the big thing back then.
So I put my $2,000 into Salton and not Apple. I made a decent profit and sold it about five years later. By the end of 1995, Apple was trading for less than $0.25 per share, and its performance had declined 17.1% from the previous year.
I was not a stockbroker, and we lacked access to the level of information available today. My strategy was simple. I wanted to invest in a company I liked and used its products, which also had a recent history of stability. Salton did, and Apple did not. Now, looking back at the past, Salton is no longer in business, while Apple has become a household name.
This is not a failure in strategy. I actually doubled my money, and Apple would have achieved a similar result during that time period. The point is that labeling strategies as “good” or “bad” based on unpredictable outcomes is pointless. What matters is whether the strategy made sense with the information available at the time.
This is precisely the trap we fall into when analyzing “failed” strategies. We judge 1995 decisions with 2025 information. The real failure isn’t the initial strategy; it’s what happens when conditions change and you don’t adapt quickly enough.
The Sticking Point
Take Napoleon’s invasion of Russia. He had a solid track record, a tested military approach, and early momentum. His strategy worked across Europe: move fast, force decisive battles, and control territory, until he moved on to Russia.
However, when his supply lines broke and winter arrived, he faced a choice: retreat and regroup, or push forward with the original plan. He chose to stick to what had always worked. The conditions shifted. He didn’t. That’s when his strategy failed.
Same with Nokia. Their business strategy made perfect sense: dominate the hardware market, lock in distribution, and move slowly and steadily. It built them into the world’s largest phone company, and it worked.
However, when the market shifted to software-first platforms and speed became a matter of survival, they had another choice: abandon their hardware-focused approach or double down on what made them successful. They chose familiar ground. The strategy that once worked became a liability.
The Adaptation Winners
Now look at the winners. Amazon started with books, then saw a bigger play and expanded into a full marketplace, and then into cloud services. Each pivot was risky. Why abandon a profitable book business for uncertain retail expansion? Why move from retail into enterprise infrastructure?
Microsoft held onto Windows for too long before facing reality. Steve Ballmer’s “developers, developers, developers” strategy made sense in a Windows-first world. Still, Satya Nadella saw the shift to cloud and mobile, rebuilt trust with developers, and centered the company on cloud and enterprise software.
Both companies changed before they had to. That’s what made the difference.
What Adaptation Actually Looks Like
The real story of every long-term success? They changed before they had to. That’s what made the difference.
Watch for these signals:
What used to work easily now requires more effort for the same results
Competitors are succeeding with approaches you dismissed as inferior
Your best people are getting excited about opportunities outside your core business
Customers are asking for things your strategy can’t deliver
The adaptation decision:
Persistence feels safer because it’s proven
Pivoting feels risky because it’s unproven
Sticking to a strategy that no longer fits the terrain is the riskiest move of all
The Betting Problem
Most strategy advice focuses on better planning, more sophisticated frameworks, deeper market analysis, and longer forecasts; however, this approach often solves the wrong problem.
Most companies plan reasonably well. They conduct competitive research, develop financial models, and analyze market trends. The planning isn’t what kills them.
What kills them is the betting structure. They turn good analysis into roulette bets when they should be playing poker.
They are trying to make better red-or-black bets, with more sophisticated analysis to pick the right color. Still, they largely ignore the fundamental choice architecture: the distinction between red or black betting and poker betting.
Red-or-black betting is what ultimately led to the downfall of Nokia and Napoleon. All chips on one approach to hardware dominance, military tactics that worked before. When the wheel spins and you’re wrong, you lose everything.
Poker betting is what saved Amazon and Microsoft. You manage a hand with multiple options, fold when necessary, and adjust your bets based on new information. You size your investments based on uncertainty, not just opportunity.
What poker betting looks like in business:
Building optionality into every major decision
Keeping escape routes open even when you’re winning
Being willing to fold even on strategies you’ve invested in
Treating strategy as a series of adjustable bets, not a single big decision
Nokia didn’t fail because its original plan was poorly researched. They failed because they lacked a plan for handling a market shift away from their core assumptions.
Amazon succeeded not because it had a perfect e-commerce strategy, but because it built optionality into everything it did. Each expansion provided them with new information and choices.
The difference isn’t about being more careful or more bold. It’s about acknowledging uncertainty upfront rather than trying to analyze it away.
Most companies don’t need better plans. They need better escape routes.
The Real Challenge
We all have strategies or approaches we’re attached to because they worked before. The promotion strategy that got you here. The business model that built your company. The management style that contributed to your success.
The question isn’t whether your strategy was sound. It probably was.
The question is whether it still fits the world as it exists today, not as it existed when you designed it.
Bottom line: Most strategy failures aren’t about poor design. They are about sticking to a good design that no longer fits the terrain.
Most companies already do planning reasonably well, it’s execution and adaptation that kills them. The real world is messier and more uncertain than frameworks suggest. Leaders need more practical wisdom to go with the sophisticated tools.
Adaptation is not optional. It is the job.
What bet are you clinging to that stopped making sense five turns ago?
I’ve sat on both sides as an employee and a leader. Now, as a coach, I help people stop talking about leadership, communication, and relationships and start practicing them.
I don’t write about theory. I write about what I know, what I have implemented, and what I have lived, not to sell something, but to pass on what I have learned.
I like the poker betting vs roulette betting analogy. It is an excellent way to frame this distinction and far more accessible and implementable than most other decision making structures.