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Competitive Strategy Thoughts

Combating the Culture of “Can’t”

“You can’t do that. It’s not how we do that here.”

When working for (or with) a large company, “can’t” may be a word you hear on a fairly regular basis. A corporate “culture of can’t” molds employees and decision-makers into being risk-averse, void of strategic thinking, and creates artificial limitations on execution. It creates a fear-based work environment where employees don’t want to suggest a new strategy, make an investment, or highlight a new trend for fear of ridicule. Fortunately, inventive cures for a “can’t culture” are out there – if you’re not afraid to use them.

Confronting this issue requires admitting that risk-averse thinking may have taken hold in your firm, and that it has consequences. In the article Overcoming a Bias Against Risk, global management consulting firm McKinsey & Company points (ironically) to serious risk in risk-averse corporate culture. McKinsey said, “…executives making repeated decisions about the many smaller investments that a company might make during the course of a year—expanding a sales force at a consumer-goods company into a new geography, for example, or introducing a product-line extension at an electronics firm—should be risk neutral. Decisions about projects of this size don’t carry the risk of causing financial distress—and aversion to risk at this level stifles growth and innovation.”

McKinsey notes that, “Risk aversion is unnecessary because statistically, a large number of projects are extremely unlikely all to fail (unless they are highly correlated to the same risks). Yet many managers at this level—who make many such investments over a career—exhibit an unwarranted aversion to risk.”

I’ve seen this first-hand. When I was a consultant, one of our customers was a huge North American wireless communication provider. This company had a very risk-averse culture led by managers that constantly re-enforced this culture. For one project, we needed to better understand customer satisfaction with their technology support services. We proposed a survey to gauge perceptions of support strengths and weaknesses. But management shot it down, saying, “We don’t survey our customers. We can’t do that here.” At least one senior manager called it an “unwritten policy.”

Sometimes, straight up defiance is the best tonic for corporate risk phobia. A great example of this was the Fail Faire, last hosted by The World Bank in Washington DC in 2012. Several large global corporate sponsors and a list of illustrious public and private sector participants gathered to talk about their failures, and how success grew out of them. Organizers said, “Failure is no reason to be ashamed. Failure shows leadership, innovation, and risk-taking in pushing the boundaries of what is possible in scaling ideas from pilots to global programs. There is great value in examining our mistakes as we go beyond the easy and the simple.”

Since the “culture of can’t” is often unchallenged (and even indirectly encouraged by hyper-critical micro-managers), companies need internal change agents and a committed effort from employees, managers, and leadership. Like using a map to travel, there are many routes to get to a destination. It can be difficult to embrace risk, but it’s critical to encourage innovation and successful project execution. As the manager or a team leader, it is up to you to release the reins and trust employees that they will get to the result you are expecting using multiple different avenues to get there. Otherwise, the "culture of can't" will likely be a blog post one of your employees writes about in the future.

Amanda Cash-Crowley