How To Harness Paranoia To Avoid The ‘Success Trap’

Entrepreneurs’ Organization (EO) helps business owners achieve their full potential at every stage of their venture. Marc Olesen is president and CEO of Sift, which helps companies outpace evolving fraud threats to grow and scale. We asked Mark why paranoia can be beneficial in leadership.

We’ve all heard the adage, “If it ain’t broke, don’t fix it.” In an era of unprecedented speed of innovation, business leaders who abide by this mantra today are on the fast track to failure.

Countless studies have shown that successful companies often struggle to innovate, which leads them to extinction driven by technological change. Just look at Blockbuster, Borders, and Kodak. Each once a powerhouse in their respective industry eventually became the victim of their own success, failing to innovate in response to shifting market demands.

Why? In part because leadership was not paranoid enough. I am not suggesting that these leaders should have been paralyzed with crippling distrust or fear–that doesn’t make good leadership either. But, in my experience, successful business leaders all have a healthy dose of paranoia which drives their ability to question perceived truths about their business and market and ultimately make needed changes to maintain success.

Fast forward to March 2020 and the onset of a pandemic business climate. Virtually every industry–from healthcare and legal services to retail and hospitality–needed to transform digitally overnight. For most, it was “digital or bust” in the blink of an eye, and we bore witness to many falling in the latter category. While businesses certainly could not have predicted a global pandemic and the cascading effects of shelter-in-place mandates and physical office closures, companies that were already failing to adapt to digital commerce took the hardest hit. Lack of paranoia is partly to blame for business failures here, too.

As business leaders consider what’s next in times of continued uncertainty, here are some  critical ways to turn paranoia into a tool to help your business remain innovation-driven and maintain hard-won success.

Question everything.

Ruminating on feelings of worry is a waste of time. Business leaders can first harness their paranoia by constantly asking questions–both about your business and the market overall. Most markets are more dynamic than they’ve ever been, and change happens fast. If you’re not asking questions, you’re not intimately familiar with your market, and you’re going to get passed by.

For example, my company experienced a major product breakthrough two years ago when we started probing customers about how they use our product to stop fraudulent transactions. We wanted to know specifically how they measured the rate at which legitimate purchases were declined after being mistakenly identified as fraud. We discovered that none of our customers knew what this metric was or how to measure it. In fact, there weren’t even industry benchmarks to guide them.

This discovery, and the willingness to continuously question, led to an innovative new feature that helps measure “false positives” and ultimately eliminates them altogether.

Stay humble.

Asking questions will likely prove that you don’t have all of the answers–and that’s okay. Even the most successful leaders embrace humility and acknowledge that they need a trusted team to figure out the best path forward.

I strictly adhere to the philosophy of “hire the best and trust them.” We need to empower our domain experts to make decisions and sometimes “disagree and commit.” Or more often, express our point of view and then defer to the domain expert or functional owner.

It takes humility, but I try to practice this with everyone in our organization. It’s essential that leaders both demonstrate their engagement with team members and defer to their expertise.

Stay nimble and pivot.

With a healthy dose of paranoia and a “question everything” mindset, your business can respond much more quickly to market changes and new demands–not just externally but internally as well.

When the pandemic hit, we were in a position to not only quickly transform to a fully remote workforce but also to meet the emerging needs of this new workforce. With continued employee feedback gathering, in the last 18 months, we’ve zeroed in on mental health, balance, and self-care with new investments ranging from five extra mental health days off to “deep work” Wednesday blocks where Zoom meetings are avoided.

As new challenges related to remote collaboration, equity, access to leadership, and team bonding surface, our nimble leadership team is eager to take them on to refine our people strategy and ultimately create an even more agile organization.

It’s easy to get caught up in your business’s success. While there is a time and place to acknowledge and celebrate big wins and market leadership, complacency is a death knell in today’s business reality. By harnessing paranoia, leaders can avoid finding finite satisfaction in today’s victories and focus on maintaining a competitive edge for tomorrow.

The opinions expressed here by columnists are their own, not those of

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