15 Mar 2025 10 min read chronicles

The Cargo Cult of Modern Teams & Companies: When Belief Replaces Reality

In the mid-20th century, anthropologists studying Pacific island cultures encountered a phenomenon that would later be known as the cargo cult. Indigenous groups, having witnessed technologically advanced military forces arrive with airplanes full of supplies, came to believe that the material wealth, the cargo, was a result of rituals rather than logistics, manufacturing, or economics. After the war, when the cargo stopped arriving, some islanders began building mock airstrips, wooden radios, and bamboo control towers, believing that if they mimicked the behaviours of the soldiers, the cargo would return.

This concept, originally used to describe isolated societies attempting to summon technology through ritualistic imitation, has found an uncanny parallel in modern companies and teams, particularly in startups, tech firms, and corporate innovation efforts.

Cargo Cult Thinking in Business: The Shock Between Two Realities

As Arthur C. Clarke famously stated: "Any sufficiently advanced technology is indistinguishable from magic." When less developed societies encountered modern technology, they attributed its arrival to rituals and belief systems rather than understanding the underlying infrastructure. The same dynamic occurs in the business world, where companies see successful organisations implementing specific frameworks, cultural principles, and methodologies, and assume that by adopting them, they too will achieve similar success. Without truly comprehending why these approaches work within their specific contexts, many organisations blindly copy them, believing that success will naturally follow.

The illusion of success can be particularly strong in startups and high-growth companies, where the influx of funding, media attention, or prestigious partnerships can create an internal narrative of invincibility. Employees and leadership begin to believe that their company is fundamentally superior, that their approach is inherently innovative, and that their eventual success is inevitable. However, when there is little grounding in actual performance or market validation, this belief system can quickly collapse when external pressures mount.

Real-World Examples: Cargo Cult Thinking in Companies

As Phil Rosenzweig highlights in The Halo Effect... and the Eight Other Business Delusions That Deceive Managers, many organisations fall into the trap of mistaking correlation for causation, adopting practices from successful companies without understanding the underlying factors that led to their success.

The Berlin Automotive Startup Collapse

One striking example of cargo cult thinking is a Berlin-based automotive startup that received a $400 million investment but ultimately failed. Officially, the company attributed its downfall to the COVID-19 pandemic in 2020. However, the deeper reality pointed to a different cause. The startup was dominated by young engineers who were deeply infatuated with their own perceived success, convinced that they were executing everything flawlessly despite mounting internal inefficiencies. Work culture was driven more by self-congratulation than disciplined execution. The result was the layoff of ninety employees and the eventual outsourcing of the entire codebase to India. The internal belief in their superiority blinded them to real performance issues, leading to their downfall.

The Silicon Valley Bubble: When Unicorns Believe Their Own Hype

Another well-documented case of cargo cult thinking occurred in Silicon Valley with companies such as Theranos and WeWork. Theranos, for instance, built a culture of secrecy, self-congratulation, and unwavering belief in its proprietary blood-testing technology, despite overwhelming scientific evidence that it did not work. The organisation focused on rituals—confident investor presentations, prestigious board members, and carefully curated media narratives—rather than actual scientific breakthroughs. In the end, the myth collapsed when the external world imposed reality, leading to legal action and the company’s downfall. Similarly, WeWork, under Adam Neumann’s leadership, relied on grandiose vision statements and a cult-like internal culture, disregarding the fundamental financial and operational realities of its business model. The valuation plummeted when investors began scrutinising the company’s actual performance, demonstrating that even the most well-funded illusions cannot defy economic gravity forever.

The Development of Self-Fulfilling Myths in Teams

Cargo cult thinking is not only found at the company level but also within individual teams. Some teams develop internal myths that reinforce their own sense of importance and superiority. These groups are often led by long-standing employees who have successfully evaded performance reviews and external scrutiny. Over time, they create a self-sustaining bubble where they isolate themselves from the rest of the organisation and limit visibility into their actual contributions.

In such environments, dissent is often discouraged, and an "us versus them" mentality takes root. Those who question the team’s effectiveness or practices are seen as adversaries rather than constructive voices. These teams may also aggressively recruit from other departments, arguing that their work is too critical to be broken down into smaller, manageable tasks. They continuously demand more resources, expanding their ranks under the guise of being indispensable. The unfortunate reality is that those who join often find themselves trapped, whether through organisational inertia, the threat of dismissal for non-conformity, or emotional pressure to remain loyal.

The Psychological Drivers of Cargo Cult Thinking

Why do individuals and teams cling to belief-driven execution over reality-driven performance? Several psychological factors contribute to this tendency:

Confirmation Bias: People tend to seek information that supports their existing beliefs while ignoring evidence that contradicts them.
Survivorship Bias: Organisations may only focus on successful companies that exhibit certain traits while ignoring the many failures that followed the same path.
Groupthink: Within insular teams, dissenting opinions are often discouraged, reinforcing collective delusion.
Authority Bias: When charismatic leaders perpetuate a particular narrative, employees may suspend critical thinking and accept it without question.
Sunk Cost Fallacy: The longer a team or company invests in a flawed approach, the harder it becomes to abandon it, even when evidence suggests they should.

The Broader Societal Trend: The Decline of Rational Thought and the Rise of Mimicry

Nicholas Carr, in his book The Shallows: What the Internet Is Doing to Our Brains, argues that the increasing reliance on digital media has led to a decline in deep thinking and sustained attention. This aligns with studies from the OECD PISA reports, which highlight a decline in mathematical and reading comprehension skills across many Western nations. As Daniel Kahneman explains in Thinking, Fast and Slow, cognitive biases such as confirmation bias and survivorship bias reinforce the belief systems that sustain cargo cult thinking, making it difficult for individuals and organisations to break free from their self-imposed myths.

Recent studies suggest that intelligence levels are decreasing in many Western countries, particularly in OECD rankings. This decline is not solely due to technological reliance but is also influenced by changes in education systems, cultural shifts, and evolving societal norms. Reduced emphasis on rigorous analytical thinking, shifts towards more subjective assessment methods, and a greater focus on convenience over deep intellectual engagement have contributed to this trend. As critical reasoning skills wane, individuals may find it increasingly difficult to evaluate information effectively, leaving them more susceptible to simplistic narratives and belief systems based on imitation rather than understanding. This decline is not limited to mathematical ability but extends to language skills, which has significant implications. As comprehension weakens, individuals struggle to critically analyse information, leading to a reduced capacity for independent thought.

At the same time, the growing reliance on technology has contributed to cognitive decline. With the internet, media, and artificial intelligence automating many aspects of decision-making and information processing, mental engagement decreases. People no longer need to memorise, analyse, or synthesise information in the way they once did. As a result, intellectual effort diminishes, and with it, the ability to question, challenge, and think critically.

Humans have always sought belief systems to provide order, meaning, and discipline in their lives. However, as traditional belief structures erode, they are often replaced by newer, more simplistic ideologies based on mimicry rather than deep understanding. This shift helps to explain the rise of radical ideologies that provide easy answers, regardless of their basis in reality. It also sheds light on the way individuals seek to establish identity and significance within a company, a team, or broader society. When individuals feel disconnected or lack a sense of belonging, they may create their own mythology, one where they and their peers are uniquely enlightened, misunderstood, or superior to those around them. In doing so, they construct a belief system that shields them from the discomfort of reality.

Denial of reality can become an essential survival mechanism. If an individual or group perceives that they do not fit within an organisation or a societal structure, rather than adapting or improving, they may choose to reject objective feedback altogether. In such cases, myth-making becomes a way to sustain self-worth, even in the face of clear evidence to the contrary.

Additionally, studies have shown that declines in IQ and critical thinking skills are not solely due to reliance on technology. Changes in education systems, cultural shifts, and the increasing preference for short-form content over deep analysis have also played a role. The shift away from rigorous, logic-driven education towards more subjective and self-expressive models has contributed to the erosion of complex problem-solving skills. The decline in mathematical proficiency and reading comprehension across many Western nations is not merely a technological byproduct but a broader societal shift towards convenience and surface-level understanding over depth and discipline.

When the Cargo Stops Arriving

Cargo cult beliefs persist only as long as external conditions allow them to remain unchallenged. However, some organisations manage to sustain these beliefs for extended periods despite external pressures. They do so through mechanisms such as continuous influxes of funding that delay the need for tangible results, internal narratives that reinforce their own perceived success, and carefully curated metrics that create the illusion of progress. Additionally, strong internal cultures of conformity and selective information filtering can shield teams from recognising their own shortcomings, allowing them to sustain belief-driven execution long after external warning signs appear. Eventually, reality intervenes. When companies or teams operate under delusions of superiority without genuine performance to back them up, the inevitable reckoning occurs.

The moment funding dries up, companies are forced to shift from grand visions to tangible execution. Some organisations, when faced with financial constraints, successfully pivot by reassessing their strategies, focusing on core strengths, and implementing cost-effective innovation. They may streamline operations, foster a culture of adaptability, and prioritise long-term sustainability over short-term expansion. However, many others struggle to adjust, as their internal belief systems and cargo cult practices have not prepared them for the realities of operating under financial pressure. Without a foundation of real execution, such companies often collapse under the weight of their own illusions, unable to transition from ritualistic imitation to genuine performance-driven adaptation. When customers make purchasing decisions based on value rather than branding, internal narratives no longer hold weight. When competition exposes internal weaknesses, teams that believed in their own exceptionalism are forced to confront the truth. At some point, leadership must acknowledge that metrics once used to reinforce internal myths were, in reality, mere vanity indicators with no real substance.

How Leadership Perpetuates Cargo Cult Thinking

Patrick Lencioni, in The Five Dysfunctions of a Team, describes how groupthink and an avoidance of conflict within leadership teams create an environment where myths go unchallenged. Similarly, Jim Collins, in Good to Great, emphasises that the best-performing companies prioritise rigorous execution and critical decision-making rather than blindly following industry trends. Leadership that fails to challenge ingrained myths contributes to an environment where cargo cult thinking thrives.

Leadership plays a pivotal role in enabling or dismantling cargo cult behaviours within an organisation. Executives who prioritise optics over substance contribute to an environment where appearance matters more than execution. Many leaders, often driven by investor expectations, present a narrative of innovation and market dominance while internally suppressing dissent and discouraging scrutiny. This disconnect between vision and operational reality allows myths to flourish within organisations. In contrast, effective leaders focus on tangible impact, iterative learning, and internal accountability, creating an organisation that adapts rather than clings to hollow rituals.

Moving Beyond Cargo Cult Thinking

As Eric Ries explains in The Lean Startup, companies must adopt an iterative, experimental mindset rather than simply imitating the visible structures of successful organisations. This approach ensures that decisions are based on real-world feedback rather than assumptions. Leaders and teams can take specific steps to diagnose and dismantle cargo cult thinking within their structures:

To break free from cargo cult thinking, organisations and teams must prioritise a return to fundamental principles. A compelling example of this can be seen in the transformation of IBM in the early 1990s. Faced with financial difficulties and the rapid shift in the technology landscape, IBM abandoned outdated hierarchical structures and rigid operational methods. Instead of merely imitating competitors, it focused on genuine customer needs, decentralised decision-making, and a shift towards service-oriented computing. Through a combination of strategic adaptation, cultural transformation, and a return to core competencies, IBM not only survived but went on to thrive in a rapidly changing industry. This demonstrates that organisations which confront reality, embrace adaptability, and make decisions grounded in genuine performance rather than ritualistic processes can successfully move beyond cargo cult thinking. It is not enough to mimic the practices of successful companies; the underlying logic behind these practices must be understood and adapted to the organisation’s unique context. Leaders and teams can take specific steps to diagnose and dismantle cargo cult thinking within their structures:

Diagnosing Cargo Cult Thinking in Your Organisation

Are decisions made based on clear evidence or simply because "this is what successful companies do"?
Do internal metrics reflect real performance, or are they crafted to tell a positive story?
Is dissent encouraged and critical discussion fostered, or are teams expected to align unquestioningly?
Are rituals (such as Agile ceremonies, OKRs, and innovation initiatives) yielding actual results, or are they performative in nature?

Practical Steps to Avoid Cargo Cult Thinking

Encourage First-Principles Thinking: Break down strategic decisions to fundamental truths rather than following industry trends blindly.
Emphasise Execution Over Optics: Ensure that goals, metrics, and success criteria focus on tangible outcomes rather than perception.
Foster an Environment of Open Inquiry: Create mechanisms where employees can challenge assumptions and provide honest feedback.
Regularly Reassess Organisational Practices: Evaluate which processes are driving impact and which have become hollow rituals.
Reward Critical Thinking: Recognise individuals and teams that question inefficiencies and propose reality-based improvements.

By taking these steps, organisations can move beyond ritualistic mimicry and build genuinely adaptive, high-performance cultures. Regular and honest performance assessments must replace blind optimism, and feedback loops should be designed to challenge, rather than reinforce, existing beliefs.

It is essential to foster an environment where questioning and critical evaluation are encouraged. Instead of celebrating adherence to process for its own sake, organisations must reward tangible impact. Above all, companies and teams must recognise that success is never guaranteed. It is not something that can be summoned through rituals and belief but must be earned through effort, adaptation, and genuine competence.

True progress is not achieved through imitation, but through understanding. The real magic is not found in the ritual—it is in the work.