Available December 18, 2025

Episode 011: The Drift That Destroys: When Success Becomes the Enemy of Survival

DURATION: 40 minutes
HOST: Kevin Novak
SHOW: The Human Factor Podcast

COLD OPEN

In 2004, Blockbuster had the chance to buy Netflix for $50 million. The CEO at the time reportedly laughed the Netflix founders out of the room. Blockbuster had 9,000 stores, 84,000 employees, and $6 billion in annual revenue. Netflix was a struggling DVD-by-mail service, losing money. The decision seemed obvious. Why would a dominant market leader worry about a small competitor with an unproven model?

Six years later, Blockbuster filed for bankruptcy. Netflix is now worth over $300 billion and has made an offer to buy Warner-Discovery as it remains a dominant streaming company.

Here’s what fascinates me about this story: Blockbuster didn’t fail because of one catastrophic decision. They failed because of thousands of small, reasonable decisions that gradually pulled them away from where the market was heading. Each individual choice made sense at the time. Each course correction seemed minor. But together, they created a drift so gradual that by the time leadership recognized the danger, they were already going over the falls.

I’m Kevin Novak, CEO of 2040 Digital, Professor at the University of Maryland, and author of The Truth About Transformation, Leading in the Age of AI, Uncertainty and Human Complexity, and the Ideas and Innovations weekly newsletter.

Welcome to The Human Factor Podcast. The show that explores the intersection of humanity, technology, and transformation, along with the psychology behind transformation success.

Today we’re exploring organizational drift: the silent force that destroys successful organizations, and the psychological factors that make it so dangerous.

INTRODUCTION

In our last episode, we explored how to measure the human factor, the gap between what people say they’ll do and what they actually do, and why traditional metrics systematically mislead today’s leaders. Today I want to examine a different kind of gap: the space that opens up between where your organization is heading and where your market is going. This gap doesn’t appear suddenly. It grows slowly, almost imperceptibly, until one day you realize you’ve drifted so far from relevance that recovery becomes impossible.

Here’s the uncomfortable truth about organizational drift: it doesn’t happen to failing organizations. It happens to successful ones. The very success that builds confidence, establishes market position, and creates organizational momentum also creates the conditions for drift. Success breeds comfort, comfort breeds complacency, and complacency breeds irrelevance. The organizations most vulnerable to drift are the ones that have the most reason to believe they’re doing everything right.

Today I’m going to share a framework for understanding how drift operates, what makes it psychologically dangerous, and how to recognize the warning signs before it’s too late.

You’ll learn the four stages of organizational drift and how each stage narrows your options for recovery.

We’ll examine the six human factors that enable drift to take hold, because drift isn’t a market problem or a strategy problem, it’s a psychology problem.

And I’ll provide a strategic framework for building the organizational awareness that prevents drift before it becomes fatal.

Let me start with a metaphor that will frame everything else we discuss today.

SEGMENT 1: THE RIVER METAPHOR

Understanding Drift

Imagine you’re drifting downstream in a boat. The current is moving you forward, and you’re making small course corrections to avoid the occasional log or rock. The scenery is beautiful. The ride is comfortable. You know your destination, the dock you’re heading toward, but you are content to let the current carry you there. There’s no urgency. The river is doing all of the work.

This feels wonderful in the moment. The temptation to surrender control, to become a passenger instead of a captain, is almost irresistible when things are going well.

Why exert energy steering when the current is taking you where you need to go?

Why worry about what’s around the next bend when every bend so far has been calm and navigable?

But here’s what makes drift dangerous: the river doesn’t stay the same. The current shifts. New tributaries enter. The channel narrows. Rapids appear. And because you’ve been relaxed, because you’ve been enjoying the ride instead of reading the water, you don’t notice these changes until they’re upon you. By then, you may not have the momentum, the positioning, or the skill to navigate them.

This is exactly what happens to organizations that drift. They mistake motion for progress. They assume that because the current is moving them forward, they’re moving in the right direction. They stop actively steering and become passengers in their own journey. And when the market conditions change, as they always do, they discover they’ve drifted so far from where they need to be that course correction is no longer possible. Some, like Blockbuster try, but there is simply no way or means that make the correction achievable.

What Organizational Drift Actually Is

According to research on strategic management, organizational drift occurs when a company gradually becomes detached from its strategic course without recognizing the growing misalignment. This detachment often happens so slowly that it goes unnoticed until the consequences become severe. The organization’s strategy, which was once perfectly aligned with market conditions, becomes increasingly irrelevant as conditions evolve and the organization fails to evolve with them.

I want to share an example here where a company has successfully navigated the recognition of change and pivoted to shifts in the marketplace. Peleton was all the rage during the pandemic as individuals sought ways to stay fit. Given the demand, Peleton was able to sell its equipment at premium prices. As we came out of the pandemic, sales plummeted. The market had evolved in significant ways.

Demand was no longer strong, and equipment was often listed in Facebook Marketplace at a large discount. The company was forecasted to fail, its stock dropped, and analysts downgraded the company’s potential. But Peleton actively assessed its value proposition and sought to learn from itself and the evolving market.

You may call it blind ambition, a fool’s errand, or sheer luck, but Peleton pivoted, recognizing its market could be much larger if it sold its equipment at lower price points, expanded what its equipment tracks and reports, and continued to grow monthly subscriptions at a reasonable price point. Today, they are being called a success story. The company could have drifted, but they didn’t. They actively and critically assessed the company, their offering, and the market potentia,l and transformed.

The reasons for drift vary, but they typically involve a failure to recognize or respond to changes in the marketplace. New technologies emerge that the organization dismisses as irrelevant or inferior to current approaches. Customer preferences shift in ways the organization doesn’t acknowledge or understand. Competitors appear who don’t play by the established rules. Economic conditions change the value equation for products and services. The organization may recognize these changes intellectually, but emotionally and operationally, they continue as if nothing has changed. The last bend of the river was smooth; then so shall the next one be.

What makes drift particularly insidious is that it doesn’t feel like failure. An organization experiencing drift can still be profitable. It can still be growing, at least in absolute terms. The quarterly numbers may look acceptable. Employee satisfaction surveys may show normal results. Nothing dramatic signals that something is fundamentally wrong.

Instead, drift manifests as a gradual erosion. Market share declines by a percentage point here and there. Growth rates slow just slightly. Customer engagement metrics drift downward in ways that can be explained away. Each individual data point seems unremarkable. It’s only when you aggregate the signals over time that the pattern becomes visible, and by then, the organization may have drifted past the point of easy recovery.

The Graveyard of Drifters

The business landscape is littered with once-iconic organizations that drifted into irrelevance. Kodak invented digital photography but couldn’t pivot away from film. Toys R Us dominated toy retail but couldn’t adapt to changing shopping patterns. Polaroid created the instant camera category but couldn’t evolve past it. BlackBerry defined the smartphone before smartphones were called smartphones, then watched as the market moved to devices they dismissed as toys. Sears was the Amazon of its era, with catalog shopping and store pickup that presaged modern retail, but couldn’t translate that heritage into the digital age.

None of these organizations failed because of a single catastrophic mistake. They failed because of sustained drift, a long series of small decisions that gradually pulled them away from market relevance. In most cases, the decisions that led to drift seemed reasonable at the time. Kodak’s film business was incredibly profitable, so why cannibalize it with digital? BlackBerry’s enterprise customers valued security and physical keyboards, so why compromise those features for consumer appeal? Sears had invested billions in physical stores, so why abandon that infrastructure for an unproven online model?

Each of these organizations had the resources, the talent, and the market position to adapt. What they lacked was the psychological readiness to see that adaptation was necessary. They were passengers on a river that was carrying them toward a waterfall, and they were so comfortable with the ride that they didn’t notice the increasing current speed until they heard the roar of the falls.

SEGMENT 2: THE FOUR STAGES OF DRIFT

Research on organizational adaptation identifies four distinct stages in the drift process. Understanding these stages is critical because each stage narrows your options for response. The earlier you recognize drift, the more choices you have for addressing it.

Stage One: Incremental Changes

In the first stage, the organization is making small, gradual adjustments to its internal workings. These changes are typically reactive, responding to customer feedback, competitive pressure, or stakeholder concerns. They’re not strategic pivots; they’re tactical adjustments. A product feature here, a process improvement there, a marketing message tweak to address changing customer language.

At this stage, drift isn’t yet problematic. In fact, this kind of incremental adjustment is exactly what organizations should do. The danger isn’t that the organization is making small changes; the danger is that these small changes may not be keeping pace with larger shifts happening in the external environment. The organization is course-correcting to avoid logs and rocks, but it hasn’t noticed that the river itself is changing direction.

During this stage, the organization can still change its strategy relatively easily. It has the resources, the market position, and the organizational capacity to make significant pivots if leadership recognizes the need. The critical question at this stage isn’t whether you’re making changes, but whether your changes are addressing symptoms or causes. Are you fixing what customers are complaining about, or are you understanding why customer expectations are shifting in the first place?

Stage Two: Strategic Drift

In the second stage, significant shifts are occurring in the external environment, and small changes are no longer sufficient to maintain alignment. The organization may be struggling to remain competitive. Profitability may be declining. Processes and tactics that once produced reliable results are producing diminishing returns.

This is where the psychology of drift becomes particularly dangerous. Leadership can see that something isn’t working, but acknowledging the full scope of the problem would require admitting that the current strategy, often a strategy they created or championed, is no longer viable. There’s enormous psychological pressure to explain away the warning signs. Competition has temporarily intensified. The economy is in a rough patch. Customers are being irrational. Once things stabilize, normal performance will return.

The organization at this stage is like a boat that’s entered a new section of a river with a stronger current. The captain can feel that something has changed, but rather than reading the water and adjusting course, they’re hoping that if they just maintain their current approach, the current will return to normal. It won’t.

Strategic drift is when the gap between organizational strategy and market reality begins to widen noticeably. Customer complaints shift from product issues to relevance issues. Competitors aren’t just winning deals; they’re redefining what customers expect. Talent starts leaving for organizations that feel more aligned with where the industry is heading. These are signals that drift has moved beyond the incremental stage, but they’re easy to misinterpret or dismiss.

Stage Three: Flux

In the third stage, the gap between customer needs and organizational offerings has become too wide to ignore. Customers are actively looking elsewhere. Market share losses are accelerating. The organization finally recognizes that serious changes must be made, but there’s often significant indecision about what those changes should be.

This is the crisis stage, and the psychological dynamics are intense. Leadership is simultaneously processing the anxiety of declining performance and the fear of making wrong choices about the path forward. The organization may cycle through multiple strategic proposals without committing to any of them. Analysis paralysis sets in because every option involves risk, and risk feels particularly threatening when you’re already feeling vulnerable.

The changes required at this stage are often substantial. They might involve organizational restructuring, significant investment in new capabilities, entry into new markets, or abandonment of legacy products and approaches that still generate revenue. These are high-stakes decisions with uncertain outcomes, and making them requires a level of organizational courage that drift has typically eroded.

Organizations in flux often make one of two mistakes. Some double down on their existing strategy, hoping that more intense execution of the current approach will somehow produce different results. Others panic and make dramatic changes without a clear strategic rationale, pursuing whatever shiny object seems like it might restore momentum. Neither approach addresses the underlying drift; they just express it in different ways.

Stage Four: Transformational Change or Demise

In the final stage, the organization faces a binary choice: embrace transformational change or accept decline. There’s no longer a middle path. Incremental improvements won’t close the gap. Strategic adjustments won’t restore relevance. The organization must fundamentally reinvent itself or accept that its current form is no longer viable.

Transformational change at this stage is genuinely difficult. The organization has depleted resources through the drift period. Its best talent has often left. Customer relationships have weakened. Competitive position has eroded. Everything that makes transformation difficult is now more pronounced because the organization is attempting transformation from a position of weakness rather than strength.

And yet, transformation is still possible. Some organizations emerge from this stage stronger and more competitive than before. They use the crisis as a catalyst for changes that leadership couldn’t have implemented during calmer times. The key is what researchers call an intelligent and creative response to strategic drift: a combination of honest assessment, bold vision, and disciplined execution that turns existential threat into renewal opportunity.

The alternative is demise, which can be sudden or gradual. Some organizations file for bankruptcy and cease to exist. Others enter a long decline, shrinking year after year, shedding employees and closing facilities, becoming shadows of their former selves. Think Bed, Bath and Beyond as one example. Still others get acquired by more adaptive competitors who strip them for parts. None of these outcomes were inevitable. All of them resulted from drift that was allowed to continue too long.

SEGMENT 3: THE SIX HUMAN CAUSES

Understanding the stages of drift tells you where you are in the process. But understanding why drift happens tells you how to prevent it. And the answer to why is always the same: human psychology. Drift isn’t a market problem. It’s not a technology problem. It’s not even a strategy problem. It’s a psychology problem that manifests in markets, technology adoption, and strategic choices.

I’ve identified six core human factors that enable drift to take hold. Each of these factors operates largely below conscious awareness, which is what makes them so dangerous. Leaders experiencing these psychological patterns don’t think they’re drifting. They think they’re being prudent, professional, or realistic. The defense mechanisms feel like good judgment.

Factor One: Living in Oblivion

This factor is what I call living in oblivion, a state where leadership actively fails to acknowledge market shifts, emerging technologies, changing consumer preferences, and new competitive threats. This isn’t ignorance in the traditional sense. The information is available. Reports are written. Data is collected. But the information doesn’t penetrate because leadership has constructed a psychological filter that screens out uncomfortable signals.

This cognitive bias creates an echo chamber where confirming information is welcomed, and challenging data is dismissed. Leadership surrounds itself with people who share its assumptions, or with people who have learned that challenging assumptions creates career risk. External consultants who validate the current strategy get retained; those who question it get shown the door. Board members who ask uncomfortable questions find themselves quietly pushed toward resignation.

Living in oblivion feels like confidence. The leader experiencing it believes they have a clear vision, a solid strategy, and a deep understanding of their market. What they actually have is a carefully curated reality that protects them from the anxiety that would come with acknowledging uncertainty. The psychological comfort comes at the cost of market awareness.

Factor Two: Confirmation Bias and Short-Term Thinking

This factor involves the constellation of biases that favor personal opinion over market evidence and short-term results over long-term sustainability. Leaders experiencing this factor interpret ambiguous data in ways that confirm what they already believe, discount information from sources they don’t respect, and prioritize quarterly performance over strategic positioning.

This factor is particularly dangerous because it’s reinforced by standard business practices. Most organizations measure performance on short time horizons. Quarterly earnings, annual reviews, and three-year strategic plans all create pressure to demonstrate immediate results. The long-term consequences of drift may be years away, while the short-term costs of addressing drift are immediate and measurable.

A leader experiencing this factor might genuinely believe they’re being responsible stewards of the organization. They’re meeting their numbers. They’re satisfying their board. They’re maintaining profitability. The fact that they’re doing all of this by depleting long-term strategic position doesn’t register because the measurement systems don’t capture it. By the time strategic position shows up in the metrics, the drift may be irreversible.

Factor Three: Complacency

The third factor is simple complacency, a reliance on past successes that creates false confidence about future performance. Organizations that have been successful develop what psychologists call competency traps: they become so good at their current approach that they can’t imagine needing a different one. The success that built their market position becomes the mental model that prevents them from seeing how the market is evolving.

Complacency manifests as overconfidence and a lack of curiosity. Leaders stop asking questions because they believe they already know the answers. They stop exploring the edges of their market because the core feels secure. They stop investing in capabilities they might need because current capabilities are producing results. Every one of these decisions makes sense in the moment, but collectively creates vulnerability.

The psychology here is understandable. Success feels good. It validates your decisions, your leadership, your identity. Questioning success feels ungrateful or neurotic. Why worry about what might go wrong when things are going right? But the marketplace doesn’t care about your comfort. It rewards adaptation and punishes stagnation, regardless of how much you’ve earned through past performance.

Factor Four: Intelligence Gaps

The fourth factor involves the organization’s ability to transform data into actionable intelligence. Many organizations are data-rich but wisdom-poor. They collect enormous amounts of information but lack the analytical capabilities or cultural practices to convert that information into strategic insight.

Intelligence gaps show up in several ways. Market research may be outdated or superficial. Analytics capabilities may be focused on operational efficiency rather than strategic positioning. The talent required to interpret data in strategic terms may not exist in the organization, or may exist but lack influence over decision-making. Leadership may receive beautiful dashboards that tell them nothing useful about where the market is heading.

This factor is particularly challenging because organizations often believe they have strong intelligence capabilities when they don’t. They point to their data scientists, their business intelligence platforms, their market research budgets. But the question isn’t whether you have these resources; it’s whether they’re producing insight that changes decisions. If your intelligence function consistently confirms your existing strategy rather than challenging it, you have an intelligence gap, regardless of how much you’re spending.

Factor Five: Insularity

The fifth factor is organizational insularity, a homogeneous, collective-thinking culture that stifles diverse perspectives and discourages dissent. When everyone in leadership comes from similar backgrounds, shares similar assumptions, and has been shaped by similar experiences, the organization loses its ability to see around corners.

Insularity creates what researchers call groupthink, a pattern where the desire for consensus overrides realistic appraisal of alternatives. People who might see warning signs don’t raise them because they don’t want to be seen as negative or disloyal. Ideas that challenge conventional wisdom get killed early in the discussion process, before they can receive serious consideration. The organization develops an immune response to perspectives that don’t fit its mental model.

The psychological dynamic here is social safety. Challenging the dominant view feels risky. It might damage your relationships, your reputation, and your career prospects. And if you’re wrong, you’ll be remembered as the person who cried wolf. The safest path is to align with consensus, which is exactly what creates the conditions for drift. When diverse perspectives are discouraged, the organization loses its ability to detect the weak signals that predict market shifts.

Factor Six: Erosion

The sixth factor is what I call erosion: the gradual degradation of brand reputation, market position, and organizational capability that happens so slowly it becomes normalized. Erosion is drift made visible, but because it happens incrementally, the organization adjusts its expectations rather than addressing the underlying causes.

Consider how this works psychologically. In year one, the organization loses a percentage point of market share. That’s disappointing but explainable. In year two, another percentage point disappears. That’s a trend, but market conditions were difficult. By year five, the organization has lost significant position, but each individual year’s decline seemed manageable. The baseline for what counts as acceptable performance has gradually shifted, masking the cumulative impact.

Erosion creates a normalization of decline. What would have been alarming if it happened suddenly becomes unremarkable when it happens gradually. The organization develops tolerance for deterioration because each increment is small enough to rationalize. And because the decline is gradual, it’s always possible to believe that next year will be different, that the trend will reverse, that current challenges are temporary rather than structural.

SEGMENT 4: THE WARNING SIGNS AND STRATEGIC FRAMEWORK

Recognizing the Red Flags

If you’re listening to this episode, you’re probably wondering whether your organization is experiencing drift. Let me give you a quick assessment. Consider how many of these warning signs you recognize in your organization.

First, decreasing performance. Is the organization losing market share, seeing declining demand, or experiencing profit pressure that can’t be fully explained by external factors? Second, increased competition. Has there been a sudden influx of new competitors or increased pressure from existing ones who seem to be outmaneuvering you? Third, operational inefficiencies. Are you seeing slowdowns in processes, increased error rates, or wasted resources that you didn’t see before?

Fourth, employee dissatisfaction. Is turnover increasing? Is morale declining? Are your best people leaving for competitors or startups? Fifth, declining customer engagement. Are you seeing less interaction on digital platforms, lower event attendance, and reduced participation in loyalty programs? Sixth, stagnant growth. Are your sales numbers flat while the overall market is growing? Seventh, leadership disconnection. Has leadership lost touch with customers, employees, or market reality?

If you recognized three or more of these warning signs, drift may already be underway in your organization. That’s not a reason for panic; it’s a reason for honest assessment and strategic action.

A Framework for Reversing Drift

Understanding drift is the first step. Reversing it requires a strategic framework that addresses both the operational symptoms and the psychological causes. Here’s the approach we use at 2040 Digital to help organizations recover from drift.

The first element is iteration: systematically reviewing strategic plans to ensure alignment with market reality. This isn’t the annual strategic planning exercise that produces beautiful documents nobody reads. It’s a quarterly discipline of examining whether your current strategy still makes sense given what you’re learning from the market. The question isn’t whether you have a strategy; it’s whether your market is evolving faster than your strategy.

The second element is measuring what matters: monitoring key performance indicators that reveal drift rather than obscure it. Ask yourself whether you’re measuring yesterday’s success or tomorrow’s relevance. Many organizations track metrics that confirm their existing strategy is working while ignoring metrics that would reveal how the market is shifting. If your dashboard shows all green while your market position is eroding, you’re measuring the wrong things.

The third element is maintaining an open mind: cultivating curiosity, surrounding yourself with diverse perspectives, and studying your market position objectively. Can you identify three people in your organization who regularly constructively disagree with leadership? Are their voices heard? Do they influence decisions? If not, you’ve probably created the conditions for insularity that enable drift.

The fourth element is empathy: encouraging open communication and creating formal channels for dissenting opinions without retribution. When did leadership last receive feedback that genuinely challenged their assumptions? When did they change their minds based on input from frontline employees? Organizations that prevent drift create psychological safety for people to raise uncomfortable truths.

The fifth element is preparation: investing in market intelligence and staying informed about industry trends. Consider assigning someone to be your organization’s chief disruption officer, someone whose job is to identify threats before they become crises. This person needs authority, resources, and most importantly, protection from the organizational antibodies that typically attack bearers of bad news.

The sixth element is flow: challenging the status quo and embracing change before change becomes mandatory. When did your organization last kill a profitable legacy program because it was no longer strategically relevant? The willingness to cannibalize yourself is what separates organizations that adapt from those that drift.

The seventh element is innovation: investing in new capabilities without simply being additive. Innovation often means subtraction, not addition. Sometimes the most innovative thing an organization can do is stop doing something that used to work but no longer serves strategic objectives.

The eighth element is connection: staying engaged with all stakeholders and genuinely listening to their concerns. When did leadership last have an unscripted conversation with frontline employees? With customers who stopped buying? With partners who reduced their commitment? These conversations reveal drift signals that formal channels often filter out.

CLOSING

Here’s the uncomfortable truth I want to leave you with: the most successful organizations are often the most vulnerable to drift. Success breeds comfort, comfort breeds complacency, and complacency breeds irrelevance. The question isn’t whether your organization will drift. It’s whether you’ll recognize it before the current carries you over the falls.

The river metaphor I opened with isn’t just a convenient illustration. It captures something essential about how drift operates. When you’re floating downstream, being carried by a current, it feels like progress. You’re moving. The scenery is changing. You’re getting somewhere. But motion isn’t the same as direction, and being carried isn’t the same as steering.

The six human factors I described today, living in oblivion, confirmation bias, complacency, intelligence gaps, insularity, and erosion, all work together to create the illusion that passive floating is the same as active navigation. They protect leadership from the anxiety of acknowledging that their current course may be wrong. They maintain the psychological comfort that comes from believing you know where you’re going.

But the market doesn’t care about your psychological comfort. It rewards adaptation and punishes stagnation. It moves in directions that may have nothing to do with where you expected it to go. And it does all of this continuously, which means that the alignment you achieved yesterday may not be the alignment you need tomorrow.

The organizations that avoid drift are the ones that stay uncomfortable. They’re not confident that their strategy is right; they’re constantly testing whether their strategy is still right. They don’t assume market position is permanent; they’re always asking what could disrupt their position. They don’t celebrate success and relax; they celebrate success and ask what’s next.

That river of change keeps flowing. The question is whether you’re steering your way along or just along for the ride.

If you found this episode helpful, subscribe to The Human Factor Podcast wherever you listen to podcasts. Leave a rating and a comment. And share this episode with your leadership team, because recognizing drift requires collective awareness, not just individual insight.

If you want weekly insights about transformation psychology, organizational behavior, and the human factors that determine transformation success, subscribe to the Ideas and Innovations newsletter on Substack. Every week I share practical frameworks and research on why change succeeds or fails.

Until next time, remember: success is wonderful, but success without vigilance is dangerous. Stay curious, stay uncomfortable, and keep steering. Because the moment you become a passenger is the moment drift begins.

This is The Human Factor Podcast. I’m Kevin Novak. Thanks for watching or listening.

END OF EPISODE

🎵

Upcoming: Available December 26, 2025

EPISODE 012: The Lies We Tell at Work – Why Workplace Dishonesty Destroys Transformation

Learn the uncomfortable truth about why people lie.

Research suggests that the average person tells between one and two lies per day in social interactions. In workplace settings, that number increases significantly. And that creates consequences for organizations.

More Episodes Coming Soon

View Main Podcast Page →