How to Escape The Irrelevance Trap

Companies don’t wake up one morning to discover they’ve become irrelevant. It happens slowly. Quietly. A few percentage points of share lost in a growth market. A two-year delay on a critical capability because the legacy business “needed the budget.” A management team that keeps winning last year’s game while the market plays a new one.

I call this the Irrelevance Trap, and it shows up again and again in my work with leadership teams. It’s the core pattern that ties together my recent writing on “Winning the Past but Losing the Future” and the leadership challenge of achieving escape velocity.

The Irrelevance Trap is easy to fall into. When the world outside your walls moves faster than the world inside, the gap eventually swallows you.

Why it happens

Ironically, success is the biggest culprit. A bank that grows on the strength of personal service, local knowledge, and relationship depth builds a culture around those strengths. Teams come to believe that what worked yesterday will work tomorrow. They trust the familiar. They optimize the known. They celebrate the stories that built the institution.

None of that is wrong. It’s just incomplete.

The gravitational pull of past success slows leaders down. You hesitate to abandon what got you here. You add instead of subtract. You spread capital thin across too many priorities because no one wants to say “this isn’t worth doing anymore.” The status quo becomes the path of least resistance.

Meanwhile, challengers are not burdened by legacy systems, legacy customers, or legacy expectations. They pick a narrow wedge, move fast, and are comfortable being underestimated. They win tomorrow’s relevance while established institutions sprint to protect yesterday’s wins.

The illusion of strength

The Irrelevance Trap rarely feels like a crisis in real time. That’s part of its danger.

A bank can post solid ROA, stable NIM, and a familiar (even if not exactly efficient) efficiency ratio for years while the foundation weakens. Those metrics reflect the past more than the future. By the time the board sees growth stall or attrition climb, the real damage is already done.

Leaders often tell themselves they need “just one more planning cycle” to align resources for the next phase. Or that the market “isn’t moving as fast here.” Or that customer loyalty “will buy us time.”

My experience tells a different story. When leaders rely on loyalty to mask a relevance problem, loyalty eventually dissolves. Customers stick with you until you make it easier for them to leave.

What creates escape velocity

Breaking free of the Trap is a leadership challenge, not a technology challenge. The winning moves are usually straightforward. The hard part is choosing them.

Three disciplines matter more than anything else:

1. Focus on the real customer jobs you can win.This requires a cold review of your portfolio. Which markets and use cases still reward the strengths you have? Which ones are quietly taxing you because you lack true differentiation? Most institutions pretend they can win everywhere. The best leaders pick their battles. They protect the parts of the legacy business that still earn their keep and stop funding the rest.
   

2. Rebuild the resource model. In most banks, the budget is a museum of past decisions. Lines that were justified ten or fifteen years ago still soak up capital. Projects that once had a sponsor roll forward untouched. Leaders assume the underlying problem is “not enough funding,” when the real answer is reallocating what they already have. You don’t need to spend like a megabank to regain momentum. You need to stop spending like a bank trapped in its past.
   

3. Make two or three genuine bets.Incrementalism is the silent killer. A little more digital. A little more analytics. A little more marketing to younger households. These aren’t bets. They’re noise. A meaningful bet gives you a shot at new relevance. It could be a segment you know better than anyone, a partnership strategy that compounds over multiple cycles, or a capability that will matter far more in the next decade than the last. The key is to commit and measure progress in real business terms.
   

The role of subtraction

If there’s one leadership muscle that separates those who escape the Trap from those who don’t, it’s subtraction.

What will you stop doing to create room for what comes next?

The answer is rarely neat. You will retire products that still bring in some revenue. You will trim branches in communities where you’ve been a cornerstone. You will shut down reports and committees that once made sense. Each of these decisions feels small, but together they free the energy required to regain speed.

Leaders who cannot subtract will suffocate the future by overfeeding the past.

A practical question for every leadership team

The most useful diagnostic question I give executives is blunt:

If we were starting this bank today, what would we build, and what would we ignore?

It’s not just a thought experiment. It exposes gaps between what you know is necessary and what you continue to protect out of habit. It forces clarity on priorities. It cuts through the politeness that often masks strategic drift.

When leaders answer this question honestly, they start to see where the Irrelevance Trap has already taken hold.

What the best teams do differently

The teams that break out aren’t braver or smarter. They’re clearer.

• They replace nostalgia with evidence

• They watch what non-customers are actually doing, not just what their current, often dwindling, existing base verbalizes

• They reward speed over consensus when exploring new value propositions

• They revisit the cost structure line by line instead of treating it as an inevitable byproduct of their legacy footprint

And they understand something many miss. A bank does not become irrelevant because it fails to innovate at the frontier. It becomes irrelevant because it underinvests in the parts of the business that could still win, while overinvesting in the parts that no longer matter.

Why this matters now

Volatility in rates, shifts in household formation, generational changes in financial behavior, and a wave of new entrants have all raised the stakes. The gap between institutions that adapt and institutions that drift is widening. The leaders who still believe they have time are the most at risk.

The Irrelevance Trap is avoidable. It just requires uncomfortable choices made earlier than you’d like. The reward is a bank aligned with where the world is going instead of anchored to where it has been.

That’s the essence of escape velocity. Not futuristic bets or flashy tech. Just the discipline to stop winning the past and start building the future.