A few years ago, I sat with a group of senior executives at a strategy retreat somewhere outside Kuala Lumpur. The company was profitable. Revenue had grown steadily for a decade. The leadership team was experienced, disciplined, and by any conventional measure, good at what they did.

Halfway through the afternoon session, one of the directors said something I have not forgotten: “We keep doing everything right and somehow it feels like we’re falling behind.”

Nobody in the room disagreed. They just went quiet.

That feeling of doing everything right and still falling behind is one of the most common experiences I encounter when working with business leaders today. And I’ve come to believe it points to something specific: their business model has not failed. It has been invalidated.

“The gap between where most leaders are and where the world is going is not a strategy problem. It is a model problem.”

The difference matters

A failing business model is one where execution has broken down – poor decisions, weak management, and wrong markets. That’s fixable. You tighten operations, change leadership, and refocus the strategy.

An invalidated business model is different. The execution is fine. The management is competent. The decisions, within the logic of the original model, are often correct. What has changed is the context those decisions were designed for. The assumptions underneath the model—about how value is created, how customers behave, how competition works, and what scale looks like is no longer valid.

No amount of better execution fixes that. You cannot optimize your way out of a model that the market has moved past.

Think about the taxi industry across Southeast Asia in 2012. The operators weren’t incompetent. Many were well-run businesses with strong local knowledge, loyal customers, and years of operational discipline. They were executing their model well. What they missed — or chose to ignore — was that a smartphone, a GPS chip, and a willingness to let strangers drive strangers had just made their model structurally obsolete. By the time Grab had reached critical mass, the question was no longer how to run a better taxi company. The model itself had been invalidated.

This is happening across more industries than most leaders want to admit

The taxi story is easy to tell because it happened fast and visibly. But the same dynamic is playing out more slowly and therefore less visibly across manufacturing, professional services, retail, education, logistics, and finance across our region.

The companies affected are not failing. Revenue is often still growing. Margins may still be acceptable. The warning signs are subtler: customer acquisition is getting harder, younger competitors are winning accounts that used to be automatic, pricing power is softening, the best talent is going elsewhere.

Leaders in these situations often respond by doing more of what worked before—more marketing, more efficiency drives, more product variants, more training. These are not wrong responses. They are just responses designed for a model that is being made redundant underneath them.

The question that changes everything

When I work with leadership teams on exponential transformation, one question tends to cut through the noise faster than anything else:

“What assumption does your entire business model depend on, and what happens if that assumption stops being true?”

Most leadership teams have never been asked to articulate that assumption explicitly. Once they do, the conversation shifts. This assumption is usually something that the market, technology, or a new class of competitor is already in the process of removing.

BYD asked what would happen to the EV industry if battery scarcity became battery abundance. Their answer restructured the entire supply chain. Moderna asked what drug development would look like if the platform could be reprogrammed instead of rebuilt from scratch for every disease. Their answer compressed decade-long timelines to months.

Neither of these was a strategy refinement. Both were model-level responses to a world that had moved on from the assumptions their industries were built on.

What this means for you

I am not suggesting that every business in Southeast Asia is facing imminent disruption. Some models are more durable than others. But the honest question every senior leader needs to sit with is not “Are we executing well?” — it is “Are we executing the right model?”

Those are not the same questions. And in my experience, leaders who conflate them are the ones most likely to be caught out.

The executive at that retreat was right. They were doing everything right. What they needed wasn’t better execution. It was the courage to question the model itself—before the market did it for them.