Leadership Judgement Series – Part Nine
Business reality can change long before a leadership team’s understanding of the business catches up.
A successful B2B company may have spent years learning why customers buy from it. Its reputation is strong, the proposition is understood, sales cycles are relatively predictable and leadership knows the competitors it expects to encounter.
None of that knowledge is imagined. It has been built through years of customer relationships, commercial experience and results.
Then, gradually, things begin to move.
Procurement becomes involved earlier in buying decisions. Customers conduct more research before speaking to sales. Competitors appear that the organisation did not previously regard as serious alternatives. A proposition that once felt clearly differentiated becomes easier for buyers to compare.
Existing customers continue to renew, but some are staying because changing supplier would be difficult rather than because their preference has strengthened.
There is no single moment when somebody announces that the market has changed. Instead, a series of small differences accumulates around a business that may still be performing reasonably well. Leadership can therefore continue making logical decisions based on knowledge that was once entirely accurate.
The danger is not always that leaders do not know their business.
Sometimes they know a version of it that no longer quite exists.
Leadership judgement depends not only on what leaders know, but on whether what they know still describes reality.
Current B2B research provides a live example. McKinsey’s 2026 Global B2B Pulse, based on nearly 4,000 decision-makers across 13 countries, found that buyers now use an average of ten channels across the purchasing journey, while new digital tools are influencing supplier discovery and evaluation earlier in the process. The point is not that every organisation should chase the latest channel. It is that customer behaviour can move materially while an organisation’s inherited understanding of how customers buy remains intact.
Knowing Is Not the Same as Continuing to Know
Businesses need accumulated knowledge. Without it, leadership would have to rediscover the organisation every time it made a decision. Over time, experienced leaders build a detailed understanding of what customers value, where margins come from, which competitors matter, why customers leave and which routes to market perform most effectively.
That knowledge informs thousands of decisions.
A commercial leader knows which types of opportunities are most likely to convert. An operations director understands where delivery becomes difficult. A CFO knows which parts of the business generate dependable returns. A founder may have a highly developed understanding of why customers originally chose the company and what made its proposition successful.
Much of that knowledge remains valuable for years. The problem begins when established knowledge gradually loses its question mark. Something that once required evidence becomes part of the organisation’s accepted understanding:
- “Customers value us because of our expertise.”
- “Our reputation is our strongest competitive advantage.”
- “Customers in this market want a direct relationship.”
- “Price isn’t the main reason we lose business.”
- “Our largest customers are very loyal.”
Perhaps every statement was demonstrably true when it entered the organisation’s collective understanding.
However, a fact can be true historically and dangerous strategically, because once something becomes known, leadership has less reason to ask whether it remains true.
The longer something has been true, the easier it becomes to forget that it might stop being true.
Yesterday’s truth can gradually become today’s assumption.
Success Creates Powerful Evidence for the Existing Business Reality
It is easy to explain missed market shifts as complacency, but often that is far too simplistic. Successful businesses have something less successful organisations frequently lack: a substantial body of evidence showing that their existing understanding works.
- If customers have bought through the same route for ten years, leadership has ten years of commercial evidence supporting that route.
- If a proposition has consistently generated attractive margins, there is good reason to believe customers continue to value it.
- If a particular customer segment has historically produced strong retention and growth, investing behind it is not irrational simply because somebody suggests the market might be changing.
Successful models earn credibility. That creates an interesting leadership problem when change begins.
Early evidence of a new reality is often weak.
- Perhaps two account directors report that buying committees are changing.
- A previously reliable customer segment becomes slightly harder to acquire.
- A new competitor wins three opportunities.
- Customers begin asking different questions during sales conversations.
Meanwhile, the leadership team has several years of strong financial and commercial evidence showing that the existing model works. Against that history, the new signals can look insignificant, and they may be.
Not every change is structural, not every competitor matters, and not every unusual quarter represents a trend. However, this asymmetry explains why capable leadership teams can be slow to recognise genuine shifts without being complacent or badly informed.
Change often begins as weak evidence competing against years of proof that the old model works.
The challenge is identifying when those weak signals are starting to describe something more important.
Business Reality Often Changes at the Edges First
Organisational change rarely appears everywhere at the same time. People closest to customers, operations and delivery often experience it before the effects become obvious in consolidated performance.
- A salesperson notices that previously straightforward deals now require more stakeholders.
- An account manager hears increasingly similar concerns from established customers.
- A product team sees usage moving towards capabilities that were once considered secondary.
- A service employee repeatedly encounters a customer problem that does not yet feature prominently in management reporting.
- Finance sees that the economics of winning new customers are becoming slightly less attractive even though overall margins remain healthy.
Individually, these may be unremarkable; together, they may be the early outline of a different business reality. The difficulty is that senior leadership generally receives information after it has been organised.
- Customer conversations become themes.
- Sales activity becomes pipeline.
- Operational problems become service measures.
- Individual commercial experiences become averages.
That aggregation is necessary. Nobody running a sizeable organisation can personally experience every customer interaction or operational decision, but aggregation also creates delay.
A new pattern can exist locally before it becomes sufficiently large to move a central measure.
Business reality often moves before the measures leadership uses to describe it.
That is why observation matters alongside reporting.
The organisation needs ways of noticing not only what has become statistically significant, but what is becoming different.
There is useful research behind this idea. A 2023 open-access study of weak signals describes them as subtle early signs of potentially important change that are often overlooked because their predictive certainty is low. Although the research was conducted in the energy sector, its wider point is relevant to leadership judgement: the value of a weak signal is not that it predicts the future perfectly, but that it broadens awareness early enough for an organisation to investigate what may be changing.
A Metric Can Remain Accurate While Its Meaning Changes
Consider customer retention.
A business reports retention of 92%. The number is accurate and historically leadership has interpreted high retention as evidence of strong customer relationships. That interpretation may also have been accurate, but suppose customer behaviour has changed.
Three years ago, customers renewed because they strongly preferred the company. Today, some remain because migrating their systems would be difficult, procurement teams lack the capacity to review alternatives or no competitor has yet provided enough incentive to justify the disruption.
The retention figure can remain 92%. The number has not become wrong, but what the number means has changed.
The same thing can happen elsewhere. A company retains strong overall market share while losing ground rapidly in the segment expected to drive future growth. Average margin remains healthy because mature contracts are highly profitable while the economics of newly won business deteriorate. Pipeline coverage looks consistent, but sales cycles lengthen and more opportunities require executive intervention to close.
None of the measures need to be inaccurate.
A metric can remain accurate while the meaning of that metric changes.
This is why today’s business reality cannot always be understood by asking whether the numbers remain correct. Leadership also needs to understand whether the relationship between those numbers and the underlying business remains the same.
Different Parts of the Organisation Can Know Different Realities
A business does not always move from one reality neatly into another. For a period, several realities can coexist.
- The established customer base may still behave largely as it always has.
- New customers may behave very differently.
- One geographic market may remain stable while another changes rapidly.
- Senior salespeople may continue succeeding through relationships and reputation while newer members of the team discover that the same approach is much harder to reproduce.
- Operations may be dealing with changes that have not yet affected profitability.
- Product teams may be seeing shifts in customer usage that have not made their way into strategic planning.
This can create a peculiar situation in which several people inside the same organisation make apparently contradictory statements and are all describing something they genuinely see.
- Sales says buying behaviour is changing.
- Finance says revenue remains strong.
- Customer teams say relationships feel less secure.
- The board sees retention holding steady.
None of those observations must be wrong. They may simply represent different parts of a changing reality.
The leadership challenge is not merely getting more information upwards. It is recognising when separate weak signals collectively describe a different business.
That requires leaders to remain interested in information that does not yet fit comfortably into the established picture.
How Recently Was Reality Allowed to Answer the Question Again?
Some organisational knowledge is relatively stable. Contractual obligations can be checked, physical capacity measured and regulatory requirements usually change through identifiable processes.
Customer and market knowledge is different. Buying behaviour, competitor positions, technology expectations, willingness to pay and routes to market can all move much faster.
Leadership may have researched these things rigorously, but the important question is when.
A detailed customer study from four years ago may have been excellent research. A segmentation model may have been built on strong evidence and an analysis of why the company wins business may have been completely accurate at the time.
None of that guarantees that the conclusions still describe the market today.
The question is not whether leadership knows the answer. It is how recently reality was allowed to answer the question again.
What Do We Still Know to Be True?
That changes the questions leadership should ask.
Rather than simply asking why customers buy from us, ask when we last tested whether those reasons still hold.
Instead of assuming we know our competitive set, ask who customers are actually considering today.
And rather than relying on historical reasons for churn, look at what current customer behaviour says about why relationships are becoming stronger or weaker.
This is not about distrusting organisational knowledge. It is about recognising that some knowledge has a shorter useful life than others.
For decisions carrying significant commercial consequences, what matters is whether the assumptions behind them still reflect today’s business reality, not simply whether they were once supported by good evidence.
Recent research into strategic decision-making under uncertainty supports the importance of keeping that information current. A 2024 open-access study analysing 218 survey responses found that greater environmental dynamism was associated with increased use of both business analytics and environmental scanning, with environmental scanning also contributing to rational strategic decision-making. It reinforces a practical point: when the environment is moving, leadership cannot rely solely on previously accumulated knowledge. It has to keep looking.
Revalidating Reality Does Not Mean Constantly Reopening Everything
There is an obvious danger in taking this too far. Leadership cannot and should not repeatedly challenge every established belief in the organisation.
Strategy needs continuity. Teams need priorities. Decisions need enough time to produce results and leaders need to be able to rely on organisational knowledge rather than permanently returning to first principles.
Constant doubt can be as damaging as excessive certainty. The discipline is therefore selective.
Revalidation becomes more important when the business environment is moving, when customer behaviour begins to diverge from expectation, when performance changes without a convincing explanation or when new technology and competitors alter what customers can choose.
It also matters when an important decision relies heavily on knowledge inherited from an earlier period.
If a proposed £5 million investment assumes customers will continue buying in broadly the same way for the next five years, the question of whether that buying behaviour remains current deserves serious attention. If the decision barely depends on it, repeatedly researching the issue adds little value.
Leadership does not need to ask whether everything it knows could be wrong. It needs to know which beliefs matter enough that being wrong today could materially change the decision.
Five Questions to Test Today’s Business Reality
Leadership teams do not need another process for this. They need enough discipline to make important existing knowledge visible and periodically allow reality to challenge it. Five questions can help.
1. What do we believe we know about this business that materially affects this decision?
Make the relevant knowledge explicit. What do we believe about customers, competitors, demand, economics, capability or the market that makes this particular decision sensible?
2. When did we last test whether it remains true?
Not when did we first establish it. When did customers, the market or current evidence last have the opportunity to confirm it?
3. What has changed since that evidence was gathered?
Consider customer behaviour, competitors, technology, regulation, economics and the organisation itself. Change does not automatically invalidate existing knowledge, but it gives leadership a reason to test its continuing relevance.
4. Where might people closer to the market be experiencing a different reality from leadership?
Look for differences rather than simply seeking confirmation. What are salespeople, account teams, delivery staff, customers or suppliers seeing that has not yet become obvious in central reporting?
5. What would we expect to see if our current understanding were becoming outdated?
Do not wait until the old model obviously fails. Identify the earlier signals that would suggest the relationship between what leadership knows and what the market is doing has started to change.
These questions are not designed to undermine confidence. They are designed to make confidence current.
Good Judgement Knows the Difference Between What Was True and What Remains True
What Was True Is Not Always What Remains True
Experienced leadership depends on accumulated knowledge. A business that continually forgets what it has learned is no better positioned than one that never learns at all.
The judgement challenge is recognising the difference between what has been true and what remains true.
A proposition may once have been clearly differentiated. A route to market may have worked exceptionally well, a competitor may genuinely have been irrelevant and a customer relationship may have been particularly strong.
Those things do not become historically untrue because circumstances change. But historical accuracy does not guarantee continuing commercial relevance.
Yesterday’s truth can become today’s assumption.
Keep Experience Connected to Reality
The answer is not to distrust experience or constantly reopen everything the organisation has learned. It is to periodically test the knowledge that matters most against current customers, markets and evidence.
That is particularly important when an established belief is carrying significant weight in a strategic decision, investment or commercial commitment.
Good leadership judgement does not require distrusting what you know. It requires being willing to check whether reality still agrees.
So there is one question worth asking:
Which of the things we currently “know” about our business have we not tested recently enough to know whether they are still true?
Next in the Leadership Judgement Series
How Active Listening Improves Leadership Judgement
Business reality can only influence leadership judgement if leaders remain capable of hearing it.
In Part Ten, we look at active listening not simply as an interpersonal skill, but as a leadership discipline for allowing customers, employees, evidence and alternative perspectives to genuinely change what leaders understand.