One of our favorite quotes at the Motley Fool is from Warren Buffett's 1988 letter to shareholders of Berkshire Hathaway: "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

The emphasized portion (mine) is inscribed on a wall at our headquarters, and this philosophy of investing over the long, long haul exemplifies our stock-picking approach as much as any other.

But in reality, it's a mind-set more than anything. Even great companies will fade, and many will self-destruct. As the late Steve Jobs noted: "Death is the destination we all share. No one has ever escaped it, and that is how it should be. ... It clears out the old to make way for the new."

For investors, how do you recognize the symptoms of self-destruction? While even the seemingly impenetrable "blue chips" will eventually meet their demise, there are three key questions you can ask to help protect your portfolio from the wreckage.

Does management prioritize the product?
Great companies falter when leaders fail to relentlessly prioritize the things that matter. And what matters, for any organization, is the product or service being offered to the customer.

For Steve Jobs and Apple (AAPL -1.22%), the product always came first. Apple followed many different paths over the past 37 years, but it only prospered when the company focused on creating the right products. Jobs describes how great organizations lose their way in his Walter Isaacson's biography of him:

The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they're the ones who can move the needle on revenues.

If you consider the alternate paths taken by Apple and many of its competitors, this concept crystallizes. Computer companies like Dell, Gateway, HP, and IBM managed to deliver PCs for the masses during the 1990s, which was a tremendous feat. But the PC itself became a commodity, an undifferentiated product for customers.  

More often than not, marketing the PC's numerous features became more important than the PC itself. Second, a race to rock-bottom prices began. In either scenario, the engineers were relegated to the sidelines, and the marketers and accountants took over. The products are no longer the focal point, and as Jobs points out, this causes the engineers to "turn off."

This problem, incidentally, seems to occur less often at would-be competitor start-ups, but emerges when complexity increases within organizations and various parties vie for resources. As David Karp, CEO of the highly successful blog platform Tumblr (now owned by Yahoo!), stated recently: "My philosophy toward [profitability] has always been, like, the guy on the corner selling fruit is running a profitable business. There are many profitable businesses out there. There are only so many very large networks."

At start-ups, it's a little easier to place the product on a pedestal. Hopefully, the rest -- profits, lenders, and stock bonuses -- will take care of itself down the road.

For larger companies with highly vocal stakeholders, the marketers, accountants, and financiers can end up running the show. Which is exactly what can lead a great company astray.

Has the company protected its blind side?
Even with a steadfast dedication to the product, a business can lose its way. By keeping its eye on the prize -- say, a superior product for a high-margin customer -- an established business tends to ignore its peripheral vision. And you can't defend against something you can't see.

Harvard business professor Clayton Christensen dubbed this management challenge the "innovator's dilemma" in the mid-1990s, and he continues to refine the following theory:

Disruptive innovation occurs when upstart competitors attack an existing market by targeting a different set of values for customers.

Source: Southwest Airlines Newsroom.

The airline industry is a classic example, where Southwest Airlines (LUV 1.10%) was able to lure customers away from big carriers by offering frequent, low-priced trips to underserved markets. In this scenario, it can be hard to blame the big carriers for initially ignoring a threat like Southwest. In order to boost the bottom line, legacy airlines realized they needed to offer more long-haul flights where they catered to first- or business-class customers and provided a differentiated service. After all, these were the most profitable routes and frequent fliers were their most valuable customers.

The industry giants, insistent on capturing the low-hanging fruit, allowed dirt cheap carriers like Southwest to pick up the scraps. So Southwest did, and it built a loyal, dedicated following in the process. Christensen sums up the dilemma as follows:

What disrupts any business is somebody takes a piece of business that is not attractive to the leaders, and because it's not attractive in the pursuit of profit, they go to bigger and bigger, and nicer and nicer pieces of business. And then the disruptor starts at the bottom and moves up.

From Christensen's perspective, the only solution is to "develop a disruption of your own before it's too late." Accommodate all levels of the food chain in your industry, and seek out the next big thing before someone else introduces it to the marketplace.

For investors, that means identifying whether a company's leadership has their finger on the pulse of the industry's future, not the present. Are they investing in niche, up-and-coming markets or products? While these investments will consume resources and hamper profit margins today, they just might save the business in the long run.

Who's safeguarding the company culture?
Finally, companies self-destruct when a great culture erodes. It might be the most difficult-to-measure asset in a business, but culture could also be the most important. CEOs who fail to define or defend a company's culture are destined to lose control over time.

The evolution of the investment banking industry illustrates how culture can take a backseat at one of the world's most-revered banks, Goldman Sachs (GS 0.22%). Steven Mandis, a former employee, documents the shift in his recent book, What Happened to Goldman Sachs. Mandis describes the Goldman of years past as a tight-knit family, where tenure and teamwork took precedence over rainmakers and where IPO fundraising was reserved for proven, profitable businesses. Over time, all of that changed as Goldman "drifted" away from its roots.

Instead of it happening overnight, a steady stream of pressures -- regulatory, organizational, and technological -- nudged Goldman's leadership in a certain direction. Today, Goldman remains a preeminent bank, but the transformation, from Mandis' perspective, could "[I]ncrease the probability of some sort of organizational failure, when you drift from the original principles."

The banking industry stands on more solid ground today than it did a few years ago, but the culture on Wall Street leaves a lot to be desired. As Tony Hsieh of Zappos points out, "Corporate culture is every bit as important as the bottom line." Those companies that want to remain on top should take note.

What a Fool should look for
When evaluating an investment, the warning signs of decline will be difficult to decipher. But from my perspective, investors should prioritize the culture above all. With a thriving and inspired workforce, internal quarrels over resources are less likely to occur and distract the company from its core mission. Second, motivated employees serve as a watchful eye for the company. Instead of looking to jump ship themselves, employees will be on the lookout for industry disruptions that can be communicated to the management team.

For investors, start by reading the company's annual report and poring over the CEO's letter to shareholders. Get a sense of the product focus and the industry landscape, but most important, understand the company culture. Is it a "we" culture or a CEO-centric environment? Consult websites like Glassdoor, which provides insight into the workforce. Is the sentiment positive among employees? Do they believe in their leadership team?

These issues might be the last concern for a Wall Street-type investment analyst. For a Foolish investor, they should be the first priority.