Strategy
Blog
DEENES
  1. Home
  2. Principles
  3. Overstretch
14Principle · Group 2

Overstretch

Overexpansion in business

“If you let your commitments grow faster than the means to sustain them, you will end up losing even what you could have held safely.”

Every new task, every new territory, every new location is a lasting commitment.

Group 2: Forces and ResourcesT4 Political Prudence
Go to the in-depth section ↓
A golden circle is surrounded by a thick teal frame lined with small dots packed close together; with every expansion the frame grows larger and thinner, the dots move apart, and below them a steep line and a flat line diverge. A small mist-blue push makes the frame tear at its thinnest point; afterward it pulls back to a tighter line, grows thick again, and both lines run level.
In short

If you let your commitments grow faster than the means to sustain them, you will end up losing even what you could have held safely.

What it’s about: Every new task, every new territory, every new location is a lasting commitment. Each one on its own may make sense. Together they can demand more than money, people and strength can supply. That is when overstretch sets in. It does not lead to collapse right away. It drains the substance until a small push is enough.

In depth

The principle in detail

Three steps through the principle: grasp it, place it, put it to work. Open each topic on its own.

The core messageCore statement and 3 clarifications
In essence

What matters is the ratio of load to strength. If commitments keep growing faster than the means, even what has proven itself is put at risk.

It does not say
That growth is wrong. Sometimes growth is necessary just to survive, and if you cut back too early, you lose opportunities.
It does not say
That overstretch becomes visible right away. It shows up first in quality, reserves and exhaustion.
It also says
Giving up a commitment can be a sign of strength. If you scale back in order to hold on, you are acting wisely.
The explanationWhat makes overstretch deceptive is that for a long time it looks like strength.
  • What makes overstretch deceptive is that for a long time it looks like strength.
  • Its costs show up late, and first in inconspicuous places.
  • The remedy takes two forms: deliberately reduce your commitments, or strengthen the foundation so that it grows along with them.
The question

Is your load growing faster than your strength?

The signs3 signs when you heed it · 3 when you overlook it
When you heed it
  • Before every commitment, you factor in what it will tie up in time, money and strength year after year.
  • You measure growth by whether it can be sustained, not by volume.
  • You end tasks that overburden the foundation.
When you overlook it
  • You say yes to everything and in the end can no longer do anything properly.
  • Quality drops, reserves melt away, the reliable people are exhausted.
  • Ongoing tasks are never ended because that would look like weakness.
The backgroundFrom Paul Kennedy’s “The Rise and Fall of the Great Powers” (1987). · T4 Political Prudence
  1. 1987
    OriginPaul Kennedy

    The Rise and Fall of the Great Powers

  2. Tradition T4
    TraditionPolitical Prudence

    Thucydides, Niccolò Machiavelli, Baltasar Gracián

    See the tradition on the Origin page
Read more: the full background

From Paul Kennedy’s “The Rise and Fall of the Great Powers” (1987). The idea is older: according to Publius Cornelius Tacitus, Augustus himself advised keeping the Roman Empire within its borders.

The research2 sources: 1 classic, 1 theory · 1987–1990 · with limitations of the research
2 sources1987–1990 period1 classic1 theory
Strength of evidence
  1. weak
  2. moderate
  3. strong

An influential historical interpretation with no measure of when commitments become too much; its forecast for the United States has not come true as stated.

  1. 1987
    Classic
    Paul Kennedy

    “The Rise and Fall of the Great Powers”: when a great power’s strategic commitments permanently outgrow its economic base, its relative decline begins.

  2. 1990
    Theory
    Joseph S. Nye and Paul Kennedy

    Exchange of letters in The New York Review of Books: Joseph S. Nye Jr. disputes that the United States is declining unusually fast; Paul Kennedy stresses that his thesis concerns the gap between means and commitments.

Where the research reaches its limits
  • Paul Kennedy’s forecast for the United States has not come true as stated.
  • It is hard to measure when commitments become too much.
  • Sometimes growth is necessary to survive, and if you cut back too early, you lose opportunities.
  • The principle is therefore not a rule against growth but a rule about the ratio of load to strength.
  • Paul Kennedy studies states; applying the idea to companies, families and churches is an inference.
Read more: what research shows

The historian Paul Kennedy coined the term “imperial overstretch” in 1987 in “The Rise and Fall of the Great Powers.” He examines the great powers from 1500 to his own day, including Habsburg Spain, France and Britain. His finding: military power rests on economic strength. When a state’s strategic commitments permanently outgrow its economic base, relative decline sets in. The thesis is disputed. In 1990 Joseph S. Nye Jr. challenged Paul Kennedy’s application of it to the United States: the U.S. share of the world economy, he argued, had remained stable for about 15 years. Paul Kennedy replied that his thesis was about the gap between means and commitments, not about military spending alone.

The related principles09 Economy of Force · 13 Culminating Point · 15 Logistics · 60 Balance of Power
Culminating Point

A single advance beyond the 13 Culminating Point often leaves lasting overstretch behind

Economy of ForceLogistics

If you are overstretched, you can no longer focus your forces on what matters, as 09 Economy of Force demands, and, as 15 Logistics shows, supply is usually the first thing to break

Balance of Power

For Paul Kennedy, overstretch shifts the 60 Balance of Power among the great powers

Read more: the full text

A single advance beyond the 13 Culminating Point often leaves lasting overstretch behind. If you are overstretched, you can no longer focus your forces on what matters, as 09 Economy of Force demands, and, as 15 Logistics shows, supply is usually the first thing to break. For Paul Kennedy, overstretch shifts the 60 Balance of Power among the great powers.

The action steps5 things you can actually do

  1. Write down all the ongoing commitments in your area, and next to each one what it permanently ties up in time, money and people.

  2. With every new commitment, include the running costs, not just the effort to get started.

  3. Watch for early signs: falling quality, small things left undone, exhaustion among the reliable people.

  4. If your means are not growing, deliberately end one commitment before you take on a new one.

  5. Strengthen the foundation in a targeted way: train people, build up reserves, and only then grow further.
The reflection questions3 questions: Which commitment did you most recently take on without calculating the running costs?
  1. Which commitment did you most recently take on without calculating the running costs?
  2. Where in your area are falling quality or exhaustion already showing?
  3. Which task would you no longer take on today, and what is stopping you from ending it?

Take your time with one question. Write down your answer – or talk it over with someone you trust.

To finish
The picture to rememberThe animation once more, with an explanation
  1. A golden circle is surrounded by a thick teal frame lined with small dots packed close together
  2. With every expansion the frame grows larger and thinner, the dots move apart, and below them a steep line and a flat line diverge
  3. A small mist-blue push makes the frame tear at its thinnest point
  4. Afterward it pulls back to a tighter line, grows thick again, and both lines run level
Strategy Check

What can you really carry?

Get your profile across all 12 groups in about 10 to 15 minutes.

Start the Strategy Check
In context

Group 2: Forces and Resources

Guiding question: Where do you commit your forces, and how long will they last?

Stage 3 of 5: Choose the path

Where the 92 principles come from: eight traditions of strategy, from classical war theory to dealing with uncertainty.

More about the origin

Background: WEGVISOR’s own selection from the strategy literature · More about the origin

Examples

The principle in practice

From the different spheres of society.

Government

Emperor Hadrian, the Euphrates and Overstretch

Emperor Trajan leads the Roman Empire all the way to the Persian Gulf. His successor Hadrian gives up the new provinces in the east in 117, right after taking office, and makes the Euphrates the border once again. He makes the empire smaller so that he can hold it.

Overstretch
Business

Howard Schultz, Starbucks and Overstretch

By 2007 Starbucks is growing so fast that new stores are taking customers away from each other. In July 2008 the company announces that it will close 600 stores in the United States, most of them only a few years old.

Overstretch
Business

Akio Toyoda, Toyota and Overstretch

For decades Toyota is seen as the epitome of quality. In 2009 and 2010 the group has to recall about nine million vehicles worldwide. In February 2010 President Akio Toyoda tells the U.S. Congress that the company may have grown too fast.

Overstretch
Business

Movie: The Founder

In the 1950s Ray Kroc sells franchises for McDonald’s faster than he can finance them. He almost loses his house until an adviser shows him that his business model cannot sustain the expansion.

Overstretch
FAQ

Questions about Overstretch

What does the principle of Overstretch say?

A power or organization fails when its commitments keep growing faster than the means to sustain them. This shows up first in quality and reserves, and later in its entire position.

Where does the principle of Overstretch come from?

The historian Paul Kennedy coined the term in 1987 in “The Rise and Fall of the Great Powers.” The idea can already be found in Roman politics, for example with Hadrian.

What are some examples of Overstretch?

In 117 Hadrian gave up Trajan’s eastern provinces, in 2008 Starbucks closed about 600 stores, and in 2010 Toyota admitted to growing too fast.

How well is Overstretch supported by research?

Evidence: weak – an influential historical interpretation with no measure of when commitments become too much; its forecast for the United States has not come true as stated.

Your next step

Make strategy effective – together with WEGVISOR

Reading changes how you think. Applying changes your results. Choose how you want to continue.

Request Strategy Coaching

We will get back to you personally.

You came from: Overstretch.