We’ve all seen it. An IPO is canceled, maybe a company misses earnings targets by a large margin, or a flourishing business goes under without warning. While any number of factors can cause these scenarios, I want to point out an especially nefarious one. It often goes undetected because we lack a language to describe it. In this article, I will provide a name and context for one of the business sector’s worst ailments, starting with the following story.
At a tech conference in the early 90s, Steven Ballmer was asked how much focus he thought the up-and-coming internet should receive. In what is now a famous statement, Ballmer immediately discredited the internet. In 2007, he followed suit by making light of the iPhone, saying that it was too expensive and that customers wouldn’t want a device without a keyboard. But, of course, we now know how wrong Ballmer was.
While it’s true that hindsight is 20/20, Ballmer should have known better. He’d spent most of his life as a significant leader in tech; despite his shortcomings, his expertise as Microsoft’s CEO still slotted him as the 8th richest person on Earth in February 2023. Surely, Ballmer is no fool, yet he recanted his statements, confessing that he did not take Microsoft in the right direction.
What caused Ballmer’s blindness?
This question leads us to the term I’ve chosen for a particular delusion that crops up in the business world: “Tyranny of the Familiar” (TOF). The sections below explain what TOF is, what forms it takes, and how to identify and exterminate its causes.
“Tyranny of the Familiar” is an oppressive mindset in which people overestimate the risks of the unknown in favor of sticking with what they already know. It is a preexisting condition that internally and externally primes businesses for failure, even when data warns of a familiarity bias. TOF crushes creativity and stunts success right under the radar of the world’s sharpest minds. What’s more, it usually remains undetected until it’s far too late.
Ballmer kept Microsoft in its lane, closing it from other “riskier” possibilities until it was too late (such as competing with the iPhone for example). The company was doing so well that it seemed unreasonable to worry that another company, especially one going in an abstruse direction, would surpass it. In hindsight, we see that sticking with the familiar can prove costly.
However, before we start faulting Ballmer and others, we must acknowledge that gravitation toward the familiar is a natural human instinct that is often helpful. When properly harnessed, our impulse to stick with the “tried but true” often reaps benefits. That said, TOF also occurs out of this instinct, convincing us against proven and measurable evidence that a new direction is riskier than the status quo. And, unfortunately, TOF happens more often than we might think.
TOF can occur in any realm of life, but this article specifically focuses on business. I’ve certainly seen my share through my tech career. Friends and coworkers have seen it too, and I think the best way to expose you to its presence is to share a few of our TOF stories.
Let’s start with an example from my own experience. I once took a job helping a company prepare for an acquisition that was likely to occur within 2-3 years. I put all my focus into growing the business and was given autonomy to help the company move forward however I saw best. Delightful! Working closely with my team, I doubled the sales pipeline in under four months.
Once the acquisition happened, however, things began to change. The new company had a background in a very different area than ours and wanted to use marketing strategies that had helped them succeed previously without considering what had worked for us. Their strategies did not translate well into a fast-growing company in tech. Unfamiliar with the differences between the two industries, the new company did not realize that using their methods, the seemingly “tried but true,” was riskier than continuing with my team’s apparently “unknown” methods.
The data showed what I was doing was working, but the new leadership needed to be on board with heavier investment in outbound marketing vs. their previous experience relying on SEO - and they were not. They capped the marketing budget, lowered it, and then cut it out entirely. I tried to explain the dangers of this path, but no amount of convincing would change their minds. As I projected, the company experienced a brief period of immediate returns before revenue dropped precipitously and then flatlined.
A former colleague and friend of mine also experienced a classic scenario in which familiarity bias blocked the minds of leadership from logically assessing risk.
A B2B SaaS company experiencing explosive growth hired my friend based on their history at a post-IPO company well known for its progressive innovations. They wanted them to “do exactly what you did before” to help the new company scale affiliate marketing and avoid the mistakes of other leading organizations. Within two months, my friend reset marketing strategies in a way that decreased spending by 60% and increased volume by 20% (yes, my friend is a genius).
In November of that year, the economy suffered, and, like many others, my friend’s company looked for ways to cut costs. Under immense pressure to make each budget item make sense, the newly hired head of analytics decided to cut affiliate marketing because it was not a strategy they fully understood. Unfortunately, this choice stymied my friend from continuing to make gains for the company. When sales dropped, my friend tried to explain why the company’s current direction was hurting rather than helping, but the head of analytics dismissed the warning. Instead of looking at the numbers, the new leader ignorantly determined that my friend needed a 101 Lesson in the Law of Diminishing Returns, therefore missing the entire point of my friend’s detailed, data-driven entreaty.
As with many TOF examples, there was no coming back for this business once the stroke fell. My friend made a few more attempts to help leadership understand what was happening but eventually stopped when they refused to listen and accused my friend of having a big ego. Perhaps my friend (who had already been through this dance with two other brand-name companies) was the only person who wasn’t surprised when things took a sudden, “inexplicable” tumble.
Last but not least, another buddy of mine encountered TOF while working for one of the tech majors. He created a plan centered on expanding cloud revenue for VR related customers, but a supposedly open-minded executive trashed it for three reasons: the company was moving toward AI; the executive had never used VR and, therefore, believed it wouldn’t fly; and the executive was under intense pressure from their leadership to perform.
This last reason proved to be the most telling. My friend’s supervisor embraced the same mindset as Steve Ballmer and wanted to follow highly-confident leaders regardless of the decisions those leaders made. Only my friend could see that the existing hierarchy restricted worker agency and perspective over time.
This decision resulted in a missed revenue in the nine figures. Subordinates who may have had salvatory insights kept quiet because they knew the pointlessness of proposing new ideas - and no one was equipped to speak in their defense.
While the specifics of these case studies differ, they share a common root. And, as hard as it is to believe, this root isn’t a personality trait. If TOF were simply a result of risk aversion, we would not see it attacking some of the world’s sharpest and most daring minds.
The root is instead one of the most potent and common forces in human experience: survival instinct and its impact on worker agency. Understanding this relationship is necessary to route TOF from our businesses, so I will break it down here. Things may get a bit technical, but hang with me.
Stress, an unavoidable part of life, activates the human survival instinct. That said, all stress is not created equal. Stress comes in both productive and unproductive forms. Constructive pressure occurs when humans have the agency to develop and utilize creative solutions for growth and change. Conversely, unproductive stress occurs when humans find themselves in high-pressure situations where they cannot combat the restrictions that entrap them.
When humans experience blockages of agency in their internal or external environments, they feel the obstruction on a subconscious, existential level. This condition, especially when combined with higher-level stressors such as layoffs, can result in irrational thinking patterns and narrow problem-solving. This cocktail forms the perfect breeding ground for favoring the familiar course even when data suggests it’s riskier than innovation. And the scary thing is that any worker or leader at any level can feel this strain and have it impact their actions and mindset.
With this knowledge, we can now understand the infrastructures of the earlier case studies. In all three situations, leaders found themselves under pressure from influential others and responded by unintentionally restricting channels of agency that might have saved the day. Not only were the leaders reacting out of their subconscious survival instincts, but they were resultantly blocking their subordinates from having the agency needed to experience productive stress. While some individuals, including my friends, tried to speak up, our voices were unheard. And other individuals who saw what was happening did not speak up at all. From this, we see TOF’s compounding effects: people with less agency may, out of their own survival instincts, decide it’s better to keep silent and stay with the pack.
Unfortunately, instances of restricted agency that result in TOF commonly occur in business so frequently that we fail to recognize them. In many cases, misuse of the human survival instinct is so strongly felt that it is misinterpreted as “passion,” “drive,” and “vision” instead of a “need for control” that often overtakes logic and data-driven research that may be clear from the outside. Add any additional factors such as recessions or the threat of layoffs, and it makes sense why even intentional innovation may feel riskier than the current standards suffocating the business.
While not every instance of restricted agency or TOF causes complete devastation, many do. And even the milder cases prevent businesses and individuals from reaching their full potential. TOF is tragic because, as the following section shows, it and its results are unnecessary.
The good news is that while it may take some digging to spot them, the variables that provoke TOF can be uncovered. By talking about them, we can anticipate and mitigate situations that foster unproductive stress.
Here are five ways you can empower businesses and individuals by exposing TOF before it’s too late.
TOF is more of a “when” rather than an “if,” but we can stop or significantly lessen it through awareness. The more of us that understand and talk about the dangers of TOF, the more aware we will be and the more we will break down legacies of the past that prevent this disease from being spotted.
While this article provides many suggestions and likely raises even more questions, the biggest takeaway is recognizing that agency is not homogenous. If you have a leadership position, do not assume everyone understands your vision. Instead, look carefully at your teams’ cultures and outputs and educate your subordinates on how to work within your company’s values. Failing to do this could result in disaster.
My next batch of articles dive into the anatomy of agency to show you how to take these steps, starting with the Introduction to Agency.