The Illusion of Stability and the Cost of Playing It Safe
Every legacy company starts with a breakthrough. A moment of courage. A willingness to zig while the rest of the industry zags. Kodak saw the future of photography before anyone else. Blockbuster had the chance to own streaming. BlackBerry built the first addictive smartphone.
And then, they played it safe.
They believed the illusion that what worked yesterday would work tomorrow. They optimized. They cut costs. They fine-tuned the machine instead of questioning whether the machine itself needed reinventing.
That’s the Outcome Assumption Fallacy (OAF) in action: the slow, creeping death of innovation by incrementalism. It’s why billion-dollar companies become cautionary tales. It’s why organizations with deep pockets and brilliant people still get blindsided. It’s why playing not to lose is the surest way to lose.
The Trap of Incremental Thinking
Innovation isn't always about moonshots and radical pivots. Sometimes, small tweaks—better supply chain management, incremental product enhancements, operational efficiencies—are the right move. Incrementalism works when the world is stable. When consumer behaviors, technologies, and market structures remain consistent.
But when the rules change, when a paradigm shift is underway, clinging to incrementalism is like rearranging deck chairs on the Titanic. The companies that win don’t optimize within the old game; they build a new one.
Tesla didn’t make better gas-powered cars. It redefined what a car is.
Netflix didn’t just improve DVD rentals. It erased them.
Amazon didn’t just create a better bookstore. It changed how we buy everything.
BlackBerry? It assumed the business world would always love keyboards. Kodak? It treated digital photography like a side project instead of the future.
And the worst part? They didn’t fail because they were reckless. They failed because they were too careful.
The Three Biases That Kill Innovation
Big companies don’t ignore innovation because they’re dumb. They ignore it because they’re trapped in their own success. Three cognitive biases reinforce the cycle:
Success Bias – “It worked before, so it will work again.”
Status Quo Bias – “Customers won’t change that fast.”
Illusion of Control – “We decide where the industry goes.”
Yahoo! thought it could outcompete Google with a portal strategy. Sears thought its dominance in brick-and-mortar would keep Amazon at bay. WeWork thought hype would override financial fundamentals.
They all learned the hard way: customers don’t care about your past success. The market doesn’t care about your confidence. The future belongs to the companies that see the shift before it happens.
Why Most Organizations Play the Wrong Game
Here’s the real reason companies get stuck: they reward the wrong things.
• Short-term wins over long-term positioning.
• Predictability over experimentation.
• Consensus over debate.
CEOs are paid based on stock performance, so they prioritize cost-cutting over bold bets. Middle managers are afraid of failure, so they tweak instead of transform. Boards fear volatility, so they double down on what feels safe.
And then, one day, they wake up to find that what felt safe was actually the riskiest choice of all.
2:2 agree.
The Innovator’s Playbook: How to Escape the OAF Trap
So what separates the companies that lead from those that follow? It’s not better technology. It’s not more resources. It’s a different way of thinking:
Question What Others Accept – Domino’s realized it wasn’t a pizza company; it was a technology-powered delivery company.
See What Others Overlook – Harvard’s AI oncology research leveraged outsiders to beat trained doctors at cancer detection.
Experiment Like a Scientist – Mahindra tested hybrid vehicles in small markets before scaling.
Network Beyond Their Industry – Volkswagen partnered with AI startups to accelerate self-driving innovation.
Bet on What Others Fear – Stitch Fix built a retail empire with no inventory, powered by AI.
This is what real innovation looks like. It’s not reckless. It’s not random. It’s a deliberate process of questioning, testing, adapting, and betting on the future before it arrives.
The Cost of Playing Not to Lose
Kodak. BlackBerry. Blockbuster. Sears. Yahoo! These companies didn’t fail because of a single bad decision. They failed because they made thousands of small, safe ones.
The biggest risk in business isn’t taking bold bets. It’s assuming that what worked yesterday will work tomorrow.
So ask yourself: Are you making your company better for today? Or are you making sure it still exists a decade from now?
The future belongs to those who force themselves to think beyond the obvious.
Are you one of them?
Have an innovation question or need? Email us at innovation@growthinnovationstrategy.com.
