Strategic Portfolio Management

Strategic paralysis: the hidden costs of waiting

25/07/2025

In my previous article on strategic agility, why long term strategy isn’t dead – but needs a serious rethink, I also mentioned that doing nothing is not a solution. In uncertain times, doing nothing is the biggest risk to the continued existence of your organisation. And to be clear, hope is not a strategy.

Since Trump’s second term in office, economic nationalism has made a comeback. One day we see new tariffs on electric vehicles imported into the EU, the next day export controls on semiconductors. Our companies are confronted with a geopolitical landscape that is changing faster than most strategy PowerPoints can keep up with. And yet, what do many organisations do today when lightning strikes?

Nothing.

The likely response in a boardroom is to wait and see: budgets are put on hold, strategic projects are postponed, recruitment is cancelled, and board meetings drag on in circles of ‘let’s wait and see’.
We call this strategic paralysis. And it is expensive.

From paralysis to action

As a car enthusiast, I read with great interest about how our European car industry reacted to the news of the new import tariffs. They did not sit still and immediately started lobbying industry organisations, looking at impact scenarios and investigating production relocations. Mercedes-Benz, for example, will move more production to its American factory in Alabama.

While large players often have more options and influence, many smaller companies are stuck. They are more likely to respond more slowly, which increases the costs of waiting. The costs of doing nothing are not immediately visible, but they accumulate over time. Loss of market share, strained relationships with suppliers and reduced customer confidence are just a few of the consequences.

If you want to avoid strategic paralysis, you need a governance model that creates speed, not confusion. The key is balance: central strategic guidance with room for local responses. When roles are unclear, every decision becomes a debate. But when it is clear who is allowed to act – and under what conditions – you gain speed, even in complexity.

Practical takeaways

Three ways to break this deadlock:

Enable tactical decision-making: Don’t let everything escalate. Give regional and functional leaders the mandate to act within predefined limits.
Define escalation criteria: What really needs the CEO’s signature? What can be handled at the portfolio or department level? Make it explicit. Establish clear guidelines on when issues should be escalated to senior management and when they should not, so that critical matters receive timely attention.
Agree in advance on ‘no-regret’ actions: Identify steps that make sense in most scenarios — such as securing alternative suppliers, increasing data transparency or accelerating digitisation.

Conclusion

In uncertain times, the costs of doing nothing are rarely immediate, but almost always real. A week of indecision can mean months of lost revenue, market share or investor confidence. That’s why good governance, which is more than just your strategy, is your best defence. It’s not about being perfect. It’s about being ready.

And in this world, speed is not a luxury. It is survival.