In the quest for innovation, the encouragement of risk-taking by employees is often ineffective because of entrenched, counterproductive mental models. One example is a successful manufacturing company whose commitment to quality has morphed into a stifling perfectionism that impedes progress. While the organization advocates risk-taking for transformation, it struggles to create change. This article explores the core of this challenge-the ingrained mental models that foster resistance-and advocates a balanced approach that reconciles innovation and stability.
Consider this manufacturing company. Since its creation, it has been very successful and has become one of the reference players in its market thanks to the high quality of its products and services. However, this concern for quality, fueled by a strong engineering culture, has gradually evolved into a perfectionism that has become obsessive, to the point where it is now a major factor in slowing down projects and increasing costs. Considerable energy is spent solving minor technical problems; unprofitable customers are over-served. As a result, the company is increasingly constrained in its ability to respond to a rapidly changing environment. Aware of this, the CEO has embarked on a transformation effort, primarily by encouraging managers to take more risks, but without much success. Why is this? And what can be done? To answer, we need to look at two things: first, the source of the blockage, and second, the goal being pursued.
Immunity to change
The source of the blockage is the immunity to change created by the organization’s deep mental models. The company sees perfectionism as the key to its success. It has developed a mental model that can be summarized as follows: “We’re successful because we don’t miss a detail that would get our customers in trouble”. This is a deep collective belief, largely unconscious but very strong among employees, and it profoundly influences day-to-day behavior. Like any mental model, it seems obvious, but it has its limits. As the CEO clearly understood, and as many employees readily admit, this perfectionism is also exhausting and costly. However, encouraging risk-taking, even officially, will not solve anything: everyone agrees on the need to move faster to innovate, but the imperative to take risks is perceived as a challenge to perfectionism. And perfectionism is still seen as the key to success. The imperative to take risks therefore hits a wall of mental models: when employees hear “take more risks,” they understand “put at risk what has made us successful,” which is unthinkable. The organization feels under attack and tries to protect itself by generating an immune response; no one really takes risks, and perfectionism continues unabated. It should be noted that this is not so much a “resistance to change” as a rational response that reflects the imperative of protection that is paramount for an organization.
It is therefore necessary to start by working on this mental model of “perfectionism” (if we want to call it that) and to get employees to admit that concern for quality should not necessarily translate into perfectionism. In this way, employees become aware that they are not necessarily giving up on quality when they decide not to pursue certain projects or clients. Employees can be encouraged to redefine their strong belief in the concept of quality by giving it a new meaning and, above all, new implications. In this way, the company can change while remaining itself. The immune reaction is not triggered because its identity has been respected.
Second, innovation does not necessarily mean reckless risk-taking. Effectuation, the logic of entrepreneurial action, has long advocated a logic of affordable loss, showing that entrepreneurs can succeed by taking controlled risks: they aim small; if it works, they capitalize; if it doesn’t work, it’s no big deal because it was a small bet to begin with. In short, small can become big.
Address these underlying barriers
In the realm of innovation, the battle is not only against the status quo, but also against the ingrained mental models that shape it. Encouraging risk-taking is not enough without addressing these underlying barriers. To forge a path of successful transformation, it is essential to recalibrate these mental models, balancing the pursuit of innovation with the preservation of an organization’s identity.
➕Read more about effectuation here: ▶️Effectuation: How Entrepreneurs (Really) Think and Act. About mental models here: ▶️The Conflict of Mental Models: The Key to Organizational Transformation ▶️How Mental Models Prevent Organizational Change: The Tragedy of the Greenland Settlers.
📬 If you enjoyed this blog post, why not subscribe?
🇫🇷Version in French here.
One thought on “Rethinking Risk-Taking: Unblocking Innovation by Challenging Mental Models”