One of the most dangerous strategic mistakes a CEO can make is winning the competition everyone can see while somebody else quietly changes what customers are competing for.
In the early internet era, Yahoo had an extraordinarily valuable position.
The internet was chaotic and expanding rapidly. Yahoo became somewhere people could begin their online journey. It offered directories, news, finance, email, sport, entertainment and countless other services.
It made sense to ask:
How do we build a better internet portal, attract more traffic and monetise that attention?
It was a perfectly reasonable question.
But another question was becoming more important:
How will people find anything as the internet becomes unimaginably large?
Google built around that problem.
And the distinction is a powerful lesson for CEOs wrestling with recurring problems today.
The Destination Was Not the Fundamental Need
Yahoo's portal model reflected how people experienced the early web.
You arrived somewhere.
You browsed.
You followed categories and links.
You consumed content.
The portal helped organise an otherwise confusing internet.
But as the web expanded, navigation itself became a much bigger problem.
Users increasingly did not need someone to build them a better destination.
They needed someone to help them find the destination they wanted.
Search addressed that need extraordinarily well.
That changed the strategic battleground.
Yahoo could continue improving what happened when people arrived.
Google increasingly influenced where they went in the first place.
The Wrong Question Can Produce Excellent Answers
This is what makes strategic misdiagnosis so dangerous.
Poor questions do not necessarily produce obviously poor decisions.
They can produce excellent decisions within the boundaries of the question.
If the problem is:
"How do we make our portal more valuable?"
then more content makes sense.
More services make sense.
Better advertising makes sense.
Greater engagement makes sense.
Improving the destination is entirely rational.
But suppose the deeper problem has become:
"How will people navigate an exponentially expanding internet?"
Now the strategic possibilities change.
The organisation that answers the second question may eventually determine whether customers reach the organisation still answering the first.
Your Recurring Problem May Have the Same Structure
Imagine customer churn keeps increasing.
Leadership defines the problem as poor retention.
A retention programme follows.
Customer service improves.
Loyalty incentives increase.
Account managers receive new targets.
Technology identifies customers likely to leave.
Churn improves temporarily.
Then it returns.
The organisation responds by improving the retention programme.
But what if retention is not the real problem?
Perhaps customers increasingly have another way of achieving the outcome your product once uniquely provided.
Now you are becoming exceptionally good at preventing customers from leaving something they increasingly have less reason to need.
The visible problem is churn.
The deeper problem is relevance.
Those require very different responses.
This Is Strategic Karamawari
空回り, karamawari, describes effort that fails to translate into meaningful forward movement.
We often recognise it operationally.
More meetings.
More controls.
More escalation.
More workarounds.
But Karamawari can exist at the level of strategy.
Traffic increases.
Content expands.
Engagement initiatives multiply.
Advertising becomes more sophisticated.
Teams work harder.
The organisation appears to be moving.
Yet its strategic position continues weakening because enormous effort is being directed towards improving the wrong part of the system.
That is particularly dangerous because the metrics can remain reassuring for some time.
You can improve performance while simultaneously losing relevance.
Look One Step Before Your Business
There is a useful question CEOs can ask:
What has to happen immediately before a customer needs us?
That question forces attention beyond the existing product or service.
Before someone books a hotel, they decide where to travel.
Before someone chooses insurance, they perceive a risk worth protecting.
Before someone purchases software, they encounter a problem worth solving.
Before someone visits a website, they need a reason and a mechanism for finding it.
The organisation controlling that preceding step can occupy an extraordinarily powerful position.
Yahoo concentrated heavily on the destination.
Google increasingly became the gateway.
The strategic value had begun migrating upstream.
Recurring Problems Are Sometimes Clues
When repeated competent interventions fail to produce lasting improvement, CEOs should resist immediately attempting a stronger version of the same solution.
Instead, examine what the recurrence is telling you.
Perhaps the problem has been framed too narrowly.
Perhaps the customer need has shifted.
Perhaps value has migrated somewhere else in the chain.
Perhaps a competitor is solving the problem immediately before yours.
Perhaps the organisation is optimising an activity whose strategic importance is declining.
Recurring problems can therefore be diagnostic information.
They may be telling leadership:
You are solving this in the wrong place.
Don't Just Improve the Destination
The lesson from Yahoo and Google is not simply that one company executed better than another.
The more useful lesson is about where leadership directs attention.
Organisations naturally focus on the business they can see.
Their products.
Their customers.
Their competitors.
Their processes.
Their current sources of revenue.
But occasionally the biggest threat, or opportunity, sits one step outside that frame.
That is where CEOs confronting persistent problems should occasionally look.
Not simply:
How do we solve this problem better?
But:
What larger problem is creating the need for this problem to be solved at all?
Because if repeated improvement keeps producing disappointing strategic results, the organisation may not need a better answer.
It may need to move the question.
What if your organisation is working harder every year to become the destination customers prefer, while somebody else is quietly becoming the gateway that decides whether they ever reach you?
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