When Did Optimization Become a Way to Avoid the Real Problem?

Most companies do not collapse because nobody worked hard. They collapse after years in which intelligent and committed people improved almost everything except the one thing that had actually stopped working.

The sales team received new targets. Marketing launched another campaign. Costs were reduced, processes tightened and dashboards expanded. A new consultant arrived with a new model, followed by another consultant with a slightly different model. Everyone made progress within their own area, yet the company as a whole continued to lose customers, relevance and eventually money.

I often encounter this when I am brought in to help generate more customers and revenue. The request initially sounds straightforward. Sales need to increase, margins need to recover and costs need to come down.

Then the conditions appear.

The product cannot change too much. The existing customers must not be unsettled. The pricing model is considered untouchable. The organisation should remain largely as it is. The brand cannot move too far from what people already know. Results are expected quickly, preferably without making any of the choices that could produce a fundamentally different result.

They want to learn how to swim without getting wet.

That is rarely a lack of intelligence. More often, it is the result of success. The current business model once created revenue, jobs, status and security. Changing it therefore feels less like developing the company and more like attacking everything that made the company successful.

But there comes a point when protecting the existing model becomes more dangerous than changing it.

A company can improve while becoming less relevant

Optimization is not inherently conservative or misguided. Every healthy company needs to improve quality, reduce unnecessary costs, strengthen margins and make its processes more effective. When customers still value the offer and the underlying economics are sound, optimization can create enormous value.

Suboptimization is different.

In management theory, suboptimization occurs when one part of a system is improved at the expense of the performance of the whole. A department may hit its targets while the company loses customers. Production may reduce costs while delivery times increase. Marketing may generate more leads while sales receives people who will never buy. Finance may protect this year’s margin by cutting the investment needed to remain relevant next year.

Every department can produce a convincing presentation showing that it performed well. Meanwhile, the business itself becomes weaker.

The same thing happens at the level of strategy. A company can improve its advertising, sales scripts, logistics and cost structure while the market is slowly losing interest in what it sells. The individual improvements are real, but they are being made inside a model whose relevance is disappearing.

“Optimization becomes dangerous when it helps a company become better at something the market values less each year.” Ben Steenstra

That is why falling sales do not automatically mean that sales needs fixing. Rising acquisition costs do not always mean that marketing has become less effective.

Declining margins are not necessarily solved by another round of cost reductions.

Sometimes these are symptoms of a deeper change. The customer has moved on. A new alternative has changed expectations. The problem the company once solved is no longer urgent enough. The distribution model has become too expensive. Or the offer still has value, but not for the customers the company has always considered its natural market.

Improving the visible symptoms can postpone the moment at which that reality must be faced.

Disruption is not a synonym for doing something bold

The word disruption is used so loosely that almost every innovation is now presented as disruptive. A new website is disruptive. A subscription model is disruptive. Adding AI to an existing service is disruptive. A new logo occasionally appears to qualify as disruption too.

That is not what disruptive innovation originally meant.

The Christensen Institute defines disruptive innovation as a process in which a simpler, more affordable or more accessible product initially serves low-end customers or people who were previously unable to participate in a market. As the product improves, it moves upwards and can eventually displace established competitors.

Disruption is therefore not simply radical change. It is a specific competitive process. The Christensen Institute even argues that disruption is not a strategy in itself. A company does not become successful merely by deciding to disrupt something.

Most established companies facing decline do not necessarily need to disrupt their market. They need strategic renewal.

Strategic renewal can mean changing the value proposition, entering a different customer segment, developing a new revenue model, separating a new activity from the existing organisation or accepting that a historically important product no longer deserves the resources it receives.

That may feel disruptive from inside the company, especially to the people whose identity and authority are connected to the existing model. But its purpose is not to create upheaval. Its purpose is to restore relevance.

This distinction matters because disruption is easily romanticised. Dramatic change sounds brave, while gradual improvement sounds timid. Reality is less convenient. Sometimes a company needs radical renewal. Sometimes disciplined optimization is exactly the right strategy. And sometimes the wisest decision is to preserve the profitable core while building a fundamentally different business beside it.

Strategy begins with seeing which of those situations you are actually in.

CoolCat did not fail because nobody tried

Consider the story of CoolCat.

Roland Kahn founded the fashion retailer in 1979 with a clear proposition: fashionable clothing for young people who could not afford expensive brands. It was accessible, recognisable and aimed at a customer group that established fashion retailers were not serving particularly well.

The formula worked. At its peak, CoolCat had 135 stores and approximately €150 million in revenue, according to RetailTrends. A proposition that began with a sharp understanding of an underserved customer became a substantial retail organisation.

But markets do not respect the history of a successful idea.

By the time CoolCat went bankrupt in 2019, the competitive landscape had changed.

Public analyses mentioned competition from retailers such as Primark, Zara and H&M, a relatively narrow focus on young teenagers, a weakened financial position and collections that were vulnerable to disappointing seasons. NOS described how CoolCat had originally made fashionable clothing accessible to teenagers, while RTL reported that the narrow target group and stronger competitors had become serious weaknesses.

It would be too simple to say that the internet killed CoolCat. It would also be too simple to conclude that one consultant, one campaign or one management decision could have saved it.

The more useful observation is that the proposition that once made CoolCat distinctive gradually lost part of its power. Affordable and fashionable clothing for young people was no longer a gap in the market. It had become one of the most competitive parts of the market.

At that point, better advertising, sharper purchasing and lower operating costs could still matter, but they could not recreate the strategic advantage with which the company had started. Operational improvement could buy time. It could not automatically restore relevance.

This is also what makes the inside story of Kijkshop so instructive. Once a business model has been overtaken by changing customer behaviour, old obligations and new competitors, transformation becomes both more necessary and more difficult. The longer the company waits, the more of its remaining energy is consumed by survival.

A case such as CoolCat or Kijkshop does not prove that optimization never works. It shows that optimization has limits. Efficiency cannot compensate indefinitely for a proposition that customers increasingly prefer to obtain elsewhere.

Why successful leaders keep improving the wrong model

From the outside, it can seem incomprehensible. If demand is falling and the market is changing, why does leadership not act sooner?

Because the old business is not merely an economic model. It is the place where the organisation’s experience, relationships, revenue, routines and confidence live.

The existing business has customers. The new idea does not. The existing business has forecasts, historical data and experienced employees. The new direction initially consists of assumptions, incomplete experiments and uncomfortable questions. The old model may be declining, but it still looks more substantial than the alternative.

It also created the success that gave the leaders their current position. Admitting that it needs to change can feel like admitting that their expertise is becoming obsolete. A founder may have to question the very instincts that built the company. A management team may have to redirect investment away from the departments it knows how to manage towards capabilities it does not yet understand.

That is why intelligent leaders can keep producing rational arguments for delay. The timing is not right. The new market is not mature enough. Existing customers may become nervous. The new model will damage margins. Employees are already dealing with too much change. One more efficiency programme should create the financial room needed to act later.

Each argument can be reasonable on its own. Together, they can form an extremely sophisticated defence against reality.

This is closely related to the psychological mechanism I describe in When Did You Go from Entrepreneur to Guardian of Your Own Success?. Success changes what an entrepreneur believes is at risk. What once felt like an opportunity to build something new starts to feel like a threat to everything already built.

The tragedy is that avoiding a series of small and manageable risks can eventually force the company to take one enormous risk under pressure.

What research on corporate longevity actually tells us

The claim that companies “used to live much longer” is frequently repeated, but it is often presented too carelessly.

One useful measure is the average time companies remain part of the S&P 500. Data presented by Apollo’s chief economist in 2026 showed that the average tenure had declined from approximately 25 years in 1980 to 18 years in 2012 and 15 years at the beginning of 2026.

That does not mean the average company now goes bankrupt after fifteen years. Companies also disappear from the index because they are acquired, merged, taken private or become too small relative to other companies. Index tenure is not the same as corporate lifespan.

It does, however, show that dominant market positions are being replaced more quickly.

Technology plays a role, but it rarely acts alone. Regulation changes, customer expectations evolve, new distribution channels emerge and capital allows new competitors to scale faster. Technology often accelerates these changes by reducing the cost of entering a market or by separating a profitable service from the business model that once controlled it.

WhatsApp, for example, did not simply provide telecom companies with a slightly better messaging feature. It separated messaging from the paid SMS model. The technological change mattered, but the real strategic impact came from changing what customers expected messaging to cost.

When a market changes at that level, improving the old process is rarely enough. A company must understand which part of its value has disappeared, which part remains defensible and which new value it is capable of creating.

When optimization is still the right decision

Not every decline is an existential crisis. Sometimes the offer is still strong and the organisation is simply executing badly.

Customers may still value the product, but experience poor service. Demand may be healthy, but margins are damaged by inefficient processes. Marketing may attract the right audience, but sales fails to follow up. The strategy may be sound while internal complexity makes delivery unnecessarily expensive.

In those situations, optimization is not avoidance. It is responsible management.

Radical transformation can destroy a healthy business just as surely as excessive caution can destroy a declining one. Leaders can become so fascinated by innovation that they neglect the customers, knowledge and cash flow they already possess. New is not automatically better, and dramatic is not automatically strategic.

The difference becomes visible when you examine the relationship between effort and market response.

If operational improvements lead to stronger retention, healthier margins and growing customer demand, the model may still deserve further investment. If each improvement produces only a temporary effect while demand continues to weaken, the company is probably dealing with something deeper.

Optimization strengthens a viable model. Suboptimization produces local improvements while the whole becomes weaker. Strategic renewal changes the model when its assumptions no longer fit reality.

Confusing these three is expensive.

How to recognise strategic denial

Leaders rarely announce that they are avoiding reality. Strategic denial usually arrives disguised as prudence, professionalism and responsible financial management.

A few questions can expose it:

• Which customer behaviour has changed during the past three years, and which part of our strategy still assumes that it has not?

• If we started this company today, would we choose the same customer, proposition, distribution model and cost structure?

• Which assumptions are employees allowed to challenge, and which ones immediately end the conversation?

• Are our internal performance indicators improving while customer demand, loyalty or willingness to pay is declining?

• How much of our innovation budget is genuinely building a future business, and how much is making the existing business look more modern?

• Which initiative would still matter if our current core product disappeared within three years?

• What are we protecting because it creates future value, and what are we protecting because it once created our identity?

These are uncomfortable questions because they can reveal that the organisation has been solving the problems it knows how to solve rather than the problems that now determine its future.

Many executives have been educated and rewarded for producing answers within an existing framework. They are excellent at solving the assignment but less accustomed to questioning whether the assignment still makes sense. That is one reason why suboptimization can stall progress in an era that demands genuine innovation.

The most dangerous strategic assumptions are often the ones that no longer appear on a presentation. They have become so familiar that nobody recognises them as assumptions anymore.

“Strategy begins where the list of untouchable assumptions ends.” Ben Steenstra

Survival rarely requires one heroic leap

Waiting too long creates the illusion that only two choices remain: continue as before or bet the entire company on a radical transformation.

That is usually a consequence of delay, not a law of strategy.

A healthier approach is to take small, bounded risks while the core business still provides time and cash. Test a different proposition with real customers. Build a new revenue model outside the structures that would otherwise reject it. Give a small team permission to operate without having to protect every historical assumption. Decide in advance what the company can afford to lose in exchange for learning.

This is not timid innovation. It is a way of preventing uncertainty from accumulating until the organisation is forced into one desperate gamble.

The existing business may still deserve protection. It may finance the experiments from which the future business emerges. But protection becomes dangerous when it consumes every available resource and leaves nothing with which to discover what comes next.

Optimization is not the enemy. Denial is.

Some companies need better execution. Some need a renewed proposition. Some need an entirely different business model. A few may genuinely be in a position to disrupt their market.

The strategic task is to recognise the difference while there is still enough time, money and confidence to choose.

About the author

Ben Steenstra is an entrepreneur, executive coach, author and AI sparring partner. He helps entrepreneurs, founders and leaders find clarity in business and life through Executive Coaching, AI Ben and Silent Authority Leadership.