Let's Stop Talking About Failed Companies: What Can We Learn From Them?
Nokia missed the smartphone. Kodak underestimated digital photography. Blockbuster didn't understand digital publishing. BlackBerry relied too much on the physical keyboard. Yahoo lost its strategic focus.
We've been telling these stories like this for years.
It's easy to look back and say which decision was wrong. Because we know the outcome, we forget the uncertainty at the moment of decision-making regarding the signs that seem perfectly clear to us. We characterize the leaders of failed companies as people who couldn't see change, resisted technology, or didn't understand the customer.
However, this narrative is both too simplistic and too comforting for us.
Because Kodak wasn't a company that hadn't seen digital photography. Kodak engineer Steven Sasson developed one of the world's first digital camera prototypes in-house in 1975. Nokia wasn't just an ordinary phone manufacturer lacking in technology; it was one of the world's most powerful engineering companies and mobile communications leaders during the smartphone revolution. Blockbuster's executives were also unaware of the existence of the internet.
The common problem with these companies wasn't that they couldn't foresee the future.
The problem was that they failed to make the difficult decisions required by the future they envisioned in time.
The question facing Kodak wasn't simply, "Will digital photography grow?" The real question was: "If it does grow, are we prepared to disrupt the film and photo printing economy that currently provides us with such high profits?"
Nokia's problem wasn't just developing touchscreens. It needed to restructure its organization, capabilities, and management practices, recognizing that competition was shifting from devices to software, user experience, and application ecosystems. Research cited by INSEAD explains Nokia's decline not as a single technological failure, but as a result of management decisions, organizational structure, internal competition, bureaucracy, and collective fear within the company. In short, the company had information; however, there was a system preventing this information from being safely transmitted upwards and transformed into collective decisions.
For Blockbuster, the issue wasn't simply failing to acquire Netflix. It was acknowledging that a successful business model built on stores, late fees, and physical distribution was losing value in the face of convenience and access, which customers increasingly valued. The operational machinery that had fueled the company's growth had also become a burden, making it difficult for the company to transition to a new model.
We must make an important distinction here: not all of these companies "disappeared" in the same way. Nokia continues to operate in telecommunications infrastructure today. Kodak has restructured. BlackBerry has shifted from hardware to software and security. So, what we should be discussing is not simply that the companies died; it's why the leaders of a bygone era lost their dominance in their core markets.
I call it strategic blindness .
Strategic blindness isn't about a company completely failing to see the change around it. It's about gathering data on change, preparing reports, making presentations, and even making accurate predictions; yet failing to make the necessary choices, sacrifices, and resource adjustments.
In other words:
Strategic blindness is not a lack of information, but an inability to make decisions and to forgo choices.
A company might recognize new technology but be unable to abandon its old revenue model. It might understand that the customer has changed but not alter its performance indicators. It might develop a new business model but still assign its best people to the old job. It might create impressive presentations about the future but allocate almost its entire investment budget to continuing the past.
Such a company sees the future; however, it is not moving towards it.
Strategic blindness doesn't often appear suddenly. First, a weak signal is seen. Because the signal doesn't fit the existing formula for success, it's dismissed. Then, the old model is maintained with increased efficiency, increased sales pressure, and more investment. When results begin to deteriorate, the problem is considered temporary, not structural. By the time the reality is finally acknowledged, the time, capital, and room for maneuver needed for transformation have largely been lost.
Therefore, the lesson we can learn from past companies cannot be as simple as "innovate." Many of these companies were already innovating. Kodak developed digital technologies. Nokia had significant R&D capabilities. BlackBerry was a pioneer in mobile communications.
The existence of innovation does not necessarily mean that transformation will occur.
An organization can continue to maintain the old system while generating a new idea. It can delegate innovation to a small team, tying the company's budget, incentives, and leadership attention to the existing model. Then, it can comfort itself by saying, "We're working in this field too."
At this point, we need to return to the true meaning of strategy. Strategy is not simply preparing a long list of activities for the future. Strategy is a system of choice, renunciation, timing, and discipline.
If you invest in every area without making choices, you could approach the loss of focus that Yahoo experienced. If you try to build a new business without giving up, you could face the economic dilemma that Kodak encountered. If you choose the right direction too late, you could lose track of time like Blockbuster. If you scale undisciplinedly, you might mistake growth for proof that your business model has been validated, as in the case of WeWork.
Therefore, the question every company should regularly ask itself is not "Could we become a Kodak?" That question is too general and dramatic.
More helpful questions include:
Which changes in customer behavior do we consider temporary?
What portion of our current income is psychologically or financially preventing us from investing in the future?
What is the truth that everyone in our organization sees but can't openly discuss with upper management?
If our future scenario comes true, which of our products, competencies, or business models will become worthless?
What concrete evidence will necessitate a shift in our budget, human resources, and management focus?
The purpose of these questions is not to belittle companies that have been successful in the past. On the contrary, it is to understand how difficult the decisions they faced were. Because strategic blindness usually does not stem from a lack of intelligence. It arises from an over-commitment to success, a fear of loss, pressure for short-term performance, silence within the organization, and the entrenchment of assumptions that worked in the past.
Today, we are facing a similar test with artificial intelligence. Most companies know that AI is important. Pilot projects are being launched, licenses are being purchased, training is being organized, and use cases are being prepared. However, the real strategic question is not, "Are we using AI?"
The real question is this:
Will AI make our current jobs a little more efficient, or will it redesign the way we create value, our capabilities, and our organization?
Investing in a technology is not the same as making the organizational sacrifices that technology requires. If companies simply add AI tools without questioning certain processes, roles, performance indicators, decision-making rights, or even current revenue models, they may experience a faster version of the mistakes made during the digital transformation era.
Therefore, companies need more than just classic annual strategy meetings. They need a living decision-making system that monitors signals, challenges assumptions, conducts small strategic experiments, and reallocates resources as new evidence emerges.
In my AI-powered dynamic strategy approach, I express this with the following cycle:
Observe the signal → question the assumption → make a choice → give up → allocate resources → experiment → learn → pivot as needed.
We cannot predict the future perfectly. The goal of strategy is never to predict everything accurately. But it can make visible the assumptions we base our decisions on, allow us to regularly test the validity of those assumptions, and enable us to act sooner in the face of changing evidence.
If we continue to present Nokia, Kodak, Blockbuster, and BlackBerry as mere stories of failure, we fall into the trap of thinking ourselves smarter than the winners of the past.
However, the more valuable lesson these cases teach us is this:
What makes a company vulnerable is not its inability to see the future, but its constant postponement of paying the price for the future it sees.
Now every management team has one question to ask itself:
What is the future that we envision, talk about, and even present, but for which we still haven't made the difficult decision?
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