Strategic Forgetting The Art of Letting Go of Outdated Practices_LB.pdf

Leaders should treat legacy work as technical debt with a business cost. That reframes retirement as an investment decision: what return will we get from freeing engineering cycles, simplifying audits, or shortening time to market? When a migration is framed as opportunity rather than loss, change gains momentum.
Eric Hannelius, CEO of Pepper Pay, sees intentional pruning as fundamental to scaling payments businesses. He argues that resilience depends on removing frictions that no longer serve customers while keeping guardrails that protect trust. “We aim to retire processes that exist because they used to work, not because they still do. The goal is operational clarity: if a control or flow slows customers without reducing risk meaningfully, it belongs on the retirement list. Doing this carefully preserves safety while making room for the future.”

1. Strategic Forgetting. The Art of Letting Go of Outdated Practices

Organizations that survive disruption do two things well: they learn quickly, and they
forget deliberately. In the rush to accumulate knowledge, companies often keep
playbooks that once worked but no longer serve the strategy. Letting go of those
routines is not weakness — it is design. Leaders who treat forgetting as a management
capability free their teams to pivot, innovate, and connect new signals to decisions.
Why forgetting is strategic.
Knowledge has costs. Processes, rituals, and assumptions that were useful in prior
cycles can exact hidden taxes: slowed decision speed, duplication of effort, and
resistance to new methods. Scholars who study organizational forgetting argue that
remembering the wrong things can block fresh learning and reduce competitiveness.
Treating forgetting as an active management task — alongside hiring, training, and
investing — allows firms to reallocate attention and resources to higher-return work.
Consultancies and management researchers are increasingly explicit: companies
should create cycles that alternate learning with intentional pruning. That pattern
prevents “knowledge hoarding” — the accumulation of obsolete rules that make change
harder. Firms that practice this cycle report faster adaptation when markets shift or new
technologies arrive.
What strategic forgetting looks like in practice?
Successful organizations do not purge blindly. They combine evidence, governance,
and culture.
First, they map what they currently do and why. Lineage matters: who owns a practice,
which teams rely on it, and what data shows about its current effectiveness. Mapping
turns intuition into inspection, revealing where old habits persist simply because they
are familiar.

2. Second, they create low-cost experiments to test whether an old practice still delivers
net value. Instead of wholesale removal, teams run constrained pilots that compare
outcomes with and without the legacy element. That lets leaders see downstream
effects on customers, operations, and compliance before committing to change.
Third, they embed decision rules for retirement. A practice retires when it fails objective
gates for performance, cost, or alignment with strategy. Those gates need clear metrics
and accountable owners so retirement is a governed, predictable process rather than an
emotional fight. Research shows that formal mechanisms to forget reduce the political
friction managers face when they propose removal.
Why fintech firms must design forgetting into product and compliance cycles.
Fintech companies face a special tension: speed matters, but so does trust. Legacy
controls, manual reconciliations, and ancient integrations can feel safe, and teams resist
removing them. Yet the cost of carrying outdated processes is high — slower
onboarding, brittle integrations, and maintenance debt that reduces capacity to
innovate.
Leaders should treat legacy work as technical debt with a business cost. That reframes
retirement as an investment decision: what return will we get from freeing engineering
cycles, simplifying audits, or shortening time to market? When a migration is framed as
opportunity rather than loss, change gains momentum.
Eric Hannelius, CEO of Pepper Pay, sees intentional pruning as fundamental to scaling
payments businesses. He argues that resilience depends on removing frictions that no
longer serve customers while keeping guardrails that protect trust. “We aim to retire
processes that exist because they used to work, not because they still do. The goal is
operational clarity: if a control or flow slows customers without reducing risk
meaningfully, it belongs on the retirement list. Doing this carefully preserves safety while
making room for the future.”
Cultural work: making forgetting possible.
Forgetting is social work. It requires psychological safety and a language for letting go.
Leaders should normalize three behaviors: honest asset inventories, attribution-free
postmortems that highlight obsolete rules, and visible routines for sunsetting features
and policies. When teams see retirement as normal and reversible, they are less likely
to hoard legacy work “just in case.”
Training and storytelling help. Celebrate examples where removing a process unlocked
growth or reduced customer friction. Give managers playbooks on how to retire
dependencies across legal, ops, and product. Where possible, automate rollback
options so teams know they can restore a prior behavior if tests show harm.
Governance that guides without strangling.
Formal governance shortens debates. A lightweight retirement governance forum —
with representatives from product, legal, ops, and finance — can approve
decommissioning plans, allocate resources for migration, and set monitoring windows.
That single thread reduces the “who gets to decide” logjam that kills many sensible
cleanups.

3. Evidence is central: publish pre-retirement metrics, run a time-boxed pilot, and report
post-retirement effects. Third-party assurance can help where compliance is intense.
The research literature finds that process and accountability reduce political resistance
and accelerate forgetting where it matters.
Practical pitfalls and how to avoid them.
Several traps slow or derail strategic forgetting. First, confusing sentimental value with
business value — leaders must call this out and make decisions evidence driven.
Second, underinvesting in migration effort. Poorly executed retirements create outages
and erode trust. Third, ignoring regulatory interdependencies; in fintech, a retired flow
that breaks audit trails can cause more harm than the legacy code it replaced.
Avoid these errors by budgeting migration effort as part of the decision, building
reversible deployments, and mapping regulatory touchpoints during the planning phase.
Measuring success.
You will know strategic forgetting is working when change becomes routine and
measurable. Useful indicators include reduction in mean time to deploy, decreased
variance in process cycle times, fewer legacy hotfixes, and faster onboarding for
customers and partners. Financial signals — lower maintenance spend, higher
engineering throughput — follow as organizations free resources.
Academic reviews of unlearning and intentional forgetting point to improvements in
innovative output and cross-boundary collaboration when firms manage forgetting
actively. Those gains appear because teams stop reproducing worn assumptions and
start experimenting with fewer constraints.
A leadership checklist for getting started.
Begin where the pain is obvious: choose a process, policy, or integration that costs
effort with low current return. Run a discovery sprint to map dependencies, design a
short pilot that removes or simplifies the practice, and set clear acceptance metrics. Use
governance to lock the decision rhythm and communicate outcomes openly. Iterate
rapidly; let small wins build credibility for bigger retirements.
Eric Hannelius frames the mindset simply: speed without stability is chaos, and stability
without speed is stagnation. Strategic forgetting balances the two.
Deliberate forgetting is an organizational muscle that leaders can train. It converts
accumulated history into selective memory that serves strategy. For fintech firms, where
trust and compliance coexist with rapid product change, the ability to let go of outdated
practices unlocks agility without sacrificing safety. The art of letting go is not nostalgia’s
enemy. It is a discipline that clears space for learning, innovation, and sustainable
growth.