Why Good Companies Go Bad—and How Great Companies Stay Great
Eric Ries · 2026
Why successful companies drift
Financial gravity and the golden goose
A blueprint for lasting mission
Purpose, coherence and integrity
Structures and examples
Governance, ownership and influence beyond the company
How can a company remain true to its purpose as it grows and succeeds?
The pressure to succeed in future transactions shapes behaviour, and eventually values.
A company depends on investors, customers or other powerful actors.
People anticipate what those actors will reward.
Small compromises accumulate and the mission drifts.
A successful company can undermine the principles that made it successful.
Purpose
Build something worth protecting, with human flourishing at its heart.
Coherence
Align the business around its mission.
Integrity
Create structures capable of protecting that mission.
Design the business so that fulfilling its mission is how it makes money.
Keeping members healthier can improve patient outcomes and the company’s economics.
The mission and the business model reinforce each other.
Legal duties and available structures depend on the jurisdiction.
A spiritual holding company separates economic ownership from control over the mission.
The Patagonia Purpose Trust protects the mission. The Holdfast Collective receives profits to support environmental work.
Bosch, Novo Nordisk, Hershey and IKEA use different ownership and governance arrangements to protect long-term purposes.
Companies, foundations, trusts and cooperatives can reinforce one another. Mondragón is an example of a cooperative network.
Tony’s Chocolonely carries its commitment to reducing exploitation into its cocoa supply chain. That constraint also helps distinguish its business.
Volvo made its three-point seat belt patent freely available, helping spread a safety standard across the industry.