Tyranny of the Known™: The Paradox of Success

Success is a double-edged sword. While it brings recognition, profitability, and growth, it can also create a treacherous comfort zone that hinders innovation and adaptability. This paradox is what we refer to as the “Tyranny of the Known™,” a concept that explores the relationship between what has made us successful in the past and the ever-changing demands of the future.

The Tyranny of the Known™

The tyranny of the known is a complex yet pervasive force that can both enable and inhibit an organization’s growth. It is born from the idea that what has made us successful in the past is not guaranteed to make us successful in the future.

Organizations often find themselves in a cycle where one generation of leaders makes brave decisions and investments, and the next generation reaps the benefits. This cycle can create a false sense of security, leading to a focus on maintaining the status quo rather than innovating. The tyranny of the known is essentially the force that keeps organizations locked in this cycle. It’s the gravitational pull that makes it easier to stick with what has worked before, even when the market, technology, or customer behavior is shifting.

The Cost of Sticking to the Known

The tyranny of the known has an opportunity cost, which can sometimes be severe enough to undermine the entire sustainability of an organization. For example, clinging to outdated technology because it’s what the organization knows can become too expensive in the long run, both in terms of financial resources and lost opportunities for innovation. The market is continually evolving, and sticking to the known can mean missing out on new opportunities or becoming obsolete.

The known often serves as a safety net, providing a sense of security and stability. It’s tempting to sell off assets like a medical services building to have some immediate cash to spend. While this might provide short-term relief, it’s not transformational and doesn’t change the fundamentals of the organization. The known, in this case, becomes a crutch that prevents the organization from making courageous decisions that could lead to long-term growth and sustainability.

 The Known and Its Influence on Leadership

Leadership is almost always influenced by the tyranny of the known. Leaders may find themselves respecting and even venerating the known so much that they become its prisoners. Until you can see and appreciate the tyranny of the known, you are at its mercy. This is why leaders must recognize this force and understand how it influences their decision-making processes.

Breaking free from the tyranny of the known is an intentional act. It recognizes the known for what it is—a set of practices, technologies, or strategies that have worked in the past but are not guaranteed to work in the future. Leaders must ask themselves if it’s time for transformation and, if so, be willing to disassemble even successful components of their organization to become the next and better version of itself.

The Known and CEOs

The CEO stands at the intersection of the known and the unknown, tasked with the responsibility of not just managing what is, but also envisioning what could be. This unique position presents a paradox that CEOs must skillfully navigate.

The CEO inherits an organization with established practices, culture, and strategies —the known. These are the elements that have contributed to the organization’s past successes and cannot be disregarded. The CEO must respect and maintain these aspects to ensure ongoing stability and meet stakeholder expectations.

While safeguarding the known, the CEO has the responsibility to look beyond the horizon — questioning existing paradigms, challenging the status quo, and fostering a culture of innovation. The CEO must be the visionary who sees potential shifts in the market, technological advancements, or changes in customer behavior long before they become obvious.

Next, if the CEO is naturally inclined to challenge and agitate, they can directly drive the organization toward new frontiers. However, if agitation is not their style, surrounding themselves with advisors and team members who can play this role is paramount. The CEO’s leadership team should be a mix of individuals — some who excel in execution and others who are natural innovators. The dynamic builds a positive tension that can be harnessed to move the organization forward.

When it comes to the CEO’s relationship to governance, the board of directors holds the organization accountable for its performance. However, the CEO must also hold the board accountable for its vision. This involves a two-way dialogue where the CEO not only listens to the board’s concerns about risks and returns but also challenges the board to think about long-term sustainability and innovation.

On organizational culture, the CEO plays a pivotal role in embedding values into the organization. Whether it’s a culture of kindness, innovation, or customer-centricity, it’s the CEO who sets the tone. The culture then becomes the lived version of the organization’s values, providing a stable foundation while also allowing for adaptability and growth.

Last, a successful CEO should be the “finest generalist” in the organization, with a generous curiosity about all aspects of the business. They should be experts in context rather than content, allowing them to see the bigger picture and navigate the complexities of both the known and the unknown.

The Known and Boards of Directors

The board of directors is pivotal in shaping an organization’s approach to the known and the unknown. Their influence can either propel the organization toward innovation and growth or keep it anchored in the comfort zone of the known.

Traditionally, boards have been seen as the guardians of the known, ensuring that the organization adheres to proven strategies, complies with regulations, and meets its financial objectives. This role is essential for maintaining stability and is often why boards are populated with individuals who have a producer or operator orientation. However, this focus on the known can become a limitation if it stifles adaptability and transformation.

Next, while the board has a fiduciary responsibility to safeguard the organization’s assets and ensure financial viability, it also has an equally important role in preparing the organization for the future. This involves asking hard questions, challenging the status quo, and encouraging the executive team to explore the unknown. Likewise, the board must be willing to invest in new ideas, technologies, and markets, even if it means stepping out of their comfort zone.

When it comes to board make-up, a well-balanced board will create a dynamic tension between the known and the unknown; having a mix of individuals — some who are experts in the industry and others who bring a fresh perspective. The board should be a place where ideas are rigorously debated, and where there’s room for both caution and courage. This dynamic tension enables the organization to respect the known while also making room for growth, innovation, and transformation.

In practice, under a board’s watch, one of the most dangerous outcomes for an organization is to have a “good year”. While this may seem counterintuitive, a good year can lull the organization into a false sense of security. It can make both the board and the executive team believe that their current strategies are infallible, leading to complacency. In this scenario, the known becomes a trap, preventing the organization from taking risks and exploring new opportunities.

The board’s composition and mindset serve as the ultimate check against the tyranny of the known. If the board is primarily producer-oriented, the organization is likely to focus on maintaining the status quo. On the other hand, a board that values innovation and is open to exploring the unknown can help the organization break free from the tyranny of the known.

The Known and Organizational Culture

Culture is often described as “the way things are done around here,” but its influence is far more profound. It serves as the invisible hand that guides both the known and the unknown within an organization, beginning with it being the guardian of the known.

Every organization has a set of established practices, values, and norms that constitute its culture. These elements have been honed over time and have contributed to past successes. They form the “known” in the organization, providing a sense of stability and continuity. Employees know what to expect, how to behave, and what is valued, creating an environment where the known can be efficiently managed and optimized.

Next, while culture safeguards the known, it also has the potential to be a catalyst for the unknown. A culture that values innovation, questioning, and continuous learning is more likely to explore new territories and take calculated risks. In such environments, the unknown is not feared but embraced as an opportunity for growth and differentiation that leads to ultimate transformation.

From the board to the CEO and the management team, the type of culture that gets cultivated is often a reflection of what leadership values. If the leadership values compliance and risk-avoidance, the culture will mirror these traits. Conversely, if leadership values innovation and agility, the culture will be more dynamic and open to the unknown.

At the same time, leadership cannot simply mandate culture. Culture is not something that can be dictated through executive orders or policy changes. It must be embedded into the very fabric of the organization. This means integrating cultural values into hiring practices, performance reviews, and even in the way the organization interacts with customers and stakeholders. Once something is truly embedded in the culture, it becomes enduring and self-sustaining.

When it comes to the board, culture, and the known, the board that understands the importance of culture will not only hold the CEO and leadership accountable for financial performance but also for cultural health. This dual focus ensures that the organization doesn’t stray too far into the known or the unknown but finds a balanced path for sustainable success.

Finally, until values and practices are embedded into the culture, they remain temporal — subject to change with shifts in leadership or market conditions. And, once they are part of the culture, they gain a level of permanence that provides a stable foundation for the organization to build upon.

By understanding the dual role culture plays in safeguarding the known and catalyzing the unknown, organizations can better navigate the paradox of success. Culture, in this sense, is not a byproduct of organizational life but a critical business asset that needs to be managed and invested in.

Conclusion: Navigating the Paradox for Sustainable Success

The tyranny of the known is not just a philosophical concept; it’s a practical reality that every organization faces. This paradox can serve as both a catalyst for growth and an anchor that holds an organization back. The key to navigating this complex landscape lies in a triad of influential factors: the CEO’s leadership, the board’s governance, and the organization’s culture.

The CEO is the bridge between the board’s governance and the organization’s operational reality. A CEO who understands the paradox of success knows that their role is not just to manage the known but to also create the unknown. This involves a delicate balance of respecting established practices while also challenging the status quo. The CEO’s ability to navigate this balance can either liberate the organization from the tyranny of the known or further entrench it.

The board serves as the ultimate steward of an organization’s long-term vision. It has the responsibility to ensure that the organization doesn’t become too enamored with its past successes, thereby ignoring the need for innovation and adaptation. A board that is too focused on the known can inadvertently stifle the organization’s growth potential. On the flip side, a board that understands the value of balancing the known with the unknown can set the stage for a culture of sustainable innovation.

Finally, Culture is the invisible tie that binds together the known and the unknown. A culture that is too fixated on past successes will find it difficult to adapt to new challenges. Conversely, a culture that values innovation and continuous learning will be more agile and better equipped to transform and navigate the complexities of the business landscape. Culture is not just a byproduct but a strategic asset that can either amplify the tyranny of the known or mitigate its effects.

The Path Forward

Understanding the Tyranny of the Known™ is the first step in leveraging its strengths while mitigating its weaknesses. By aligning the CEO’s leadership, the board’s governance, and the organization’s culture, companies can set the stage for sustainable growth and long-term success. This alignment creates a resilient organization and one that respects its past while eagerly shaping its future.