When Does “No” Mean “No”?

Note: This article was published in The Globe and Mail on March 3, 2015. The version below includes additional hyperlink references not published in the original.

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On big resource projects, when does ‘no’ mean ‘no’?

By Joel Gehman and Michael Lounsbury
March 3, 2015

A recent column lamented that getting to “yes” on energy projects in Canada has never been tougher: Fossil-fuel developments, pipelines, mines, dams, transmission lines, and even wind turbines “are frequently contested, delayed or blocked.” But do such outcomes mean there is a problem? And if so, what kind of problem is it?

The argument – ‘Getting to Yes’ – assumes that “yes” is somehow on the side of angels. But a critical element of any great strategy is saying “no.” It’s Strategy 101. No organization – whether a corporation, a nation-state or a non-profit – can say “yes” to everything. Choices must be made. In his classic article “What Is Strategy?,” Harvard professor Michael Porter put it bluntly: “The essence of strategy is choosing what not to do.”

Clearly then, “no” is often the better strategic choice. And yet, organizations often fall into a “yes” trap. This is because, once set in motion, strategies are hard to reverse. There are sunk costs, learning effects, organizational inertia and network externalities, among other issues. And so, an organization can easily escalate its commitment to a losing course of action. But in real-time, as these strategic decisions are unfolding, the folly is often hard to stop.

One famous example is New York’s Shoreham Nuclear Plant. First proposed in April, 1966, the plant was expected to cost $75-million and come online by 1973. The plant was eventually completed in October, 1985, only to be decommissioned in March, 1989, having never sold any electricity. By that point total costs had ballooned to $5.5-billion. Predictably, the plant’s owner, Long Island Lighting Company, was unable to survive as an independent company. All because it refused to take “no” for an answer.

On the heels of President Obama’s recent veto, some advocates of the Keystone XL pipeline have proudly proclaimed they won’t take “no” for an answer. Perhaps their persistence in the face of “no” will prove prescient. Or perhaps Keystone XL is another Shoreham Nuclear Plant in the making. Only time will tell. But all of this suggests that perhaps Canada doesn’t have a “yes” problem; perhaps Canada has a “no” problem.

Entrepreneurs in Silicon Valley have a saying: “If you’re going to fail, fail fast.” By comparison, getting to “no” on Canadian energy projects has been taking longer and longer. That prompts some interesting questions. Why has Canada been taking so long to get to “no”? How can we get to “no” faster? Why do so many organizations keep chasing “yes” in the face of “no”? And, perhaps most importantly, what are the costs to Canada of not taking “no” for an answer?

Joel Gehman (@joelgehman) is assistant professor of strategic management and organization and Southam faculty fellow at the Alberta School of Business. Michael Lounsbury is associate dean of research, professor of strategic management and organization and Thornton A. Graham chair at the Alberta School of Business.

Values Work Paper in the Top Ten Again

In March I mentioned that my paper with Linda Treviño and Raghu Garud on “Values Work: A Process Study of the Emergence and Performance of Organizational Values Practices“ was accepted for publication in the Academy of Management Journal.

This week I learned that the paper was listed as an SSRN Top Ten download for the fifth time. This time the paper was ranked as an Top Ten download in 10 different categories:

In addition to being available for free on SSRN, the paper also can be downloaded from the Academy of Management Journal’s In Press website (login required).

Fourth Top Ten Download for Values Work Paper

A couple weeks ago I mentioned that my paper with Linda Treviño and Raghu Garud on “Values Work: A Process Study of the Emergence and Performance of Organizational Values Practices“ was accepted for publication in the Academy of Management Journal.

This week I learned that the paper was listed as an SSRN Top Ten download for the fourth time. This time the paper was ranked as an Top Ten download in 2 different categories:

In addition to being available for free on SSRN, the paper also can be downloaded from the Academy of Management Journal’s In Press website (login required).

Values Work Paper in the Top 10 Again

A couple weeks ago I mentioned that my paper with Linda Treviño and Raghu Garud on “Values Work: A Process Study of the Emergence and Performance of Organizational Values Practices“ was accepted for publication in the Academy of Management Journal.

This week I learned that the paper was listed as an SSRN Top Ten download for the third time. This time the paper was ranked as an Top Ten download in 3 different categories:

In addition to being available for free on SSRN, the paper also can be downloaded from the Academy of Management Journal’s In Press website (login required).

Strategic Social Responsibility

Some interesting sound bites in a recent New York Times article on a large desalination project in China. Although the $4 billion Beijiang Power and Desalination Plant is “a technical marvel,” “the desalted water costs twice as much to produce as it sells for.”

“Someone has to lose money,” Guo Qigang, the plant’s general manager, said in a recent interview. “We’re a state-owned corporation, and it’s our social responsibility.” In some places, this would be economic lunacy. In China, it is economic strategy.

For more in-depth coverage, see Water World’s report on the Chinese desalination market.