Yesterday's Logic

5 Common Practices you should definitely move on from

Peter Drucker said: “The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic”. Well, we are in a time of turbulence - as per normal - although this quote feels particularly poignant just now. We see so many companies trying to operate today with yesterday's logic.   A lot of the cultural norms and management practices that we insist on using today - and plan on using tomorrow too - were optimised for a different world - of business, economics, socio-cultural expectations etc.  

Acting with yesterday's logic is like trying to drive with one foot on the gas pedal, but the other on the brake.  So for SME CEOs and business owners, the question is: "What outdated thinking might you be holding onto that's slowing your business down?" 

Here are five persistent ways of thinking that could be holding you back. Do any of these sound familiar?  

1. Linear Thinking in a Nonlinear World

• Yesterday's Logic. Linear thinking assumes that progress is sequential and predictable: if you do A, you will get B. It worked well in stable environments where markets, customer needs, and competition evolved at a steady pace.
• Impact Today.  The world today is anything but stable. Rapid technological innovation, shifting customer behaviours, and global interconnectedness mean change is exponential.  Markets can shift overnight, and new competitors can emerge from anywhere. Linear thinking leaves businesses ill-equipped to respond to sudden disruptions or seize new opportunities.
• Better Tomorrow.  Adopt things like scenario planning and systems thinking to anticipate multiple possible futures. Instead of focusing on a single path, consider how various trends and events interact to create new opportunities or threats.
• Example:  Traditional taxi companies focusing on incremental growth through fleet expansion couldn’t compete with Uber, which leveraged nonlinear thinking by integrating technology, user data, and flexible workforces to revolutionise transport.

  2. Hierarchical Leadership in Collaborative Times

• Yesterday's Logic. Traditional leadership models emphasised strict hierarchies, where decisions flowed top-down, and employees followed orders. This worked well in industrial-age businesses where efficiency and control were paramount.
• Impact Today. Rigid hierarchies stifle innovation and agility, two qualities essential for navigating today’s unpredictable and constantly variable environment. Employees disengage when they lack autonomy, and businesses struggle to respond quickly to change.
• Better Tomorrow.  Adopt ideas like collaborative or distributed leadership and empower teams to make decisions at the appropriate levels. Foster a culture of trust and shared responsibility, where employees feel valued for their contributions.
• Example:  Nokia’s hierarchical culture slowed its decision-making and thwarted innovation, contributing to its loss of dominance in the mobile phone market.  Compare that to Spotify’s 'squad' system which allows small, autonomous teams to innovate and adapt quickly, making it a leader in the very competitive streaming market.

 3. Short-Term Wins Over Long-Term Strategy

• Yesterday's Logic. Short-termism prioritises quarterly results, visible metrics, or immediate profitability, often at the expense of building a sustainable future.
• Impact Today. This focus leads to underinvestment in innovation, people, and infrastructure. Businesses become reactive, focusing on putting out fires rather than positioning themselves for future growth and longer-term success.
• Better Tomorrow.  Balance short-term needs with a long-term vision. This doesn’t mean ignoring immediate concerns, but align them with a strategic roadmap that ensures future relevance and resilience.   'Goal-Plan-Action - Repeat'.
• Example:  Amazon is renowned for its long-term strategic planning. Initially starting as an online bookstore, the company reinvested its profits into expanding its product range and developing infrastructure, such as its advanced logistics network and cloud computing services. This focus on long-term growth over immediate profits has positioned Amazon as one of the world’s most valuable companies. 

 4. Insular Thinking in an Interconnected World

• Yesterday's Logic.  Many smaller companies often operate with a narrow focus on their immediate market, competitors, and challenges. This worked in a less interconnected world where business ecosystems were geographically local and the businesses could thrive locally without needing to account for global dynamics.
• Impact Today.  In a globalised economy, ignoring external trends—such as technological innovation, climate change, or shifting societal values—can make a business less relevant or even obsolete. Customers and employees increasingly expect companies to engage with global challenges.
• Better Tomorrow.  Adopt a broader perspective by tracking global trends and engaging with diverse viewpoints. SMEs can no longer afford to ignore issues like sustainability, diversity, and digital transformation.
• Example:  There are a range of smaller furniture manufacturers that are embracing sustainable sourcing and promoting environmental credentials and consequently are gaining a sizable loyal customer base in an increasingly eco-conscious market. Traditional manufacturers are feeling the squeeze and cannot ignore these trends much longer otherwise they will struggle to attract modern consumers and meet emerging regulatory requirements.

 5. Siloed Operations in a Connected Business Landscape

• Yesterday's Logic.  Businesses often operate in silos, with departments functioning independently. Sales handle customers, operations manage production, and marketing focuses on promotion, with little collaboration or shared strategy.  (This is the perpendicular companion to #2 - Hierarchy).
• Impact Today.   This fragmented approach creates inefficiencies, poor customer experiences, and missed opportunities for innovation. Modern customers expect seamless experiences that cross departmental boundaries.
• Better Tomorrow.  Embrace integrated, cross-functional collaboration. Break down silos by creating systems and cultures that encourage departments to work together towards shared goals. Give primacy to processes that flow through various departments.  Use technology to connect data and processes across the organisation.
• Example:  Many traditional banks, with disconnected digital and physical services, have struggled to compete with seamless fintech platforms like Revolut, Monzo, Wise, and WealthSimple.  Also, SpaceX adopted horizontal integration, where design, production, and operations teams work closely together, which enable rapid innovation - just look at their launch rate, cost, and product improvement progress.

Some things are timeless ...While yesterday's logic may hold us back, there are of course several enduring practices that you should definitely continue with (see our 'Happy 2025' blog), such as:

• Have clear Purpose and Core Values - A business with a strong purpose and values acts with focus and resilience. Your purpose acts as your North Star, guiding decisions in both calm and turbulent times.
• Be Adaptable - Darwin’s theory of 'survival of the fittest' wasn’t about strength but adaptability.  Businesses that pivot and embrace change thrive.
• Understand People - Whether it’s your customers, employees, or community, people remain at the heart of every business.  Authentic connections—with employees, customers, and communities—build trust and loyalty.
• Think Systemically.  Businesses are interconnected systems. Strategic decisions in one area ripple across your organisation and way beyond. 

Ad Futurum 

Graham