Why do we choose not to know? Like those who seem to prefer to ‘bury their heads in the sand’ despite clear evidence to the contrary, choosing ignorance is not unfamiliar to any of us. You’ve probably been caught in the thought, “That’s a weird hill to die on,” but no matter what you say or do to convince them otherwise, they just seem to dig their heels in even deeper. But what drives this behaviour, and why does it seem to be becoming more common? At its core, the answer is simple: avoiding information that highlights the potential negative consequences of our actions – or in many cases, our lack of action – is often easier than dedicating the necessary time and resources, and having to sit with the discomfort that comes with confronting reality.
Kodak, Nokia, Blockbuster – you know their stories. They were giants that famously faltered in the face of change. Despite overwhelming evidence and knowledge indicating a need for transformation, they chose to stay the course despite the changing conditions – a decision rooted in a kind of deliberate, considered ignorance. Yes, acknowledging the truth would have required them to fundamentally overhaul their operational, commercial, and financial strategies – not to mention the profound shifts needed in their organisational structures, cultures, and identities – but had they taken the steps they should have, they may still be industry leaders today.
If it’s widely understood that failing to adapt, innovate, or simply keep up with the pace of the world inevitably heralds the “beginning of the end,” why then do so many hesitate to take preventive action?
The answer rests within our very nature as humans. At first glance, attributing our shortcomings to ‘humanity itself’ might seem overly broad and not particularly enlightening. However, this simplicity is precisely where the truth lies. Occam’s razor suggests that the simplest explanation, requiring the fewest leaps in logic, is often the correct one. The fewer assumptions we need to make, the more probable our conclusion. Thus, at the heart of our reluctance to face uncomfortable truths is a fundamental aspect of human behaviour: our innate resistance to change.
To tackle this seemingly innately human issue, we must first acknowledge the complex nature of this behaviour. At its core we find cognitive dissonance. Cognitive dissonance, the psychological conflict experienced when new information contradicts existing beliefs or assumptions, lays the foundation for understanding why individuals and firms often prefer ignorance to enlightenment. This unease, and the attempts to avoid it, underscores a key driver behind why people may fail to adapt. Yet, to fully understand it in the context of business leadership we need to turn to behavioural economics and organisational behaviour.
Behavioural economics, particularly the areas of loss aversion, offers a compelling explanation for the reluctance to actively engage with and pursue meaningful change. Simply put, loss aversion suggests that the fear, or even expectation, of potential losses—in terms of financial resources, social capital, or even identity—outweighs the perceived benefits of gain. What is interesting about this is that it occurs not only as an individual bias but can also extend to encompass organisational decision-making. For those companies like Kodak, Nokia, and Blockbuster, the prospect of overhauling their business models presented a risk that was perceived to be too great to confront, leading to a preference for the familiar path, even as the warning lights began to flash.
Although I opened with the simple answer of “humanity as the cause of all our woes”, I would be remiss to exclude more tangible barriers to change like, organisational inertia. Imagine organisational inertia as a fast-moving train approaching a critical junction where the track it’s on will soon end. If the train is moving too quickly, even if you pull the lever to switch tracks, it may continue on its original path due to its immense momentum. Worse still, attempting to change its direction too abruptly runs the risk of derailing it entirely. What this means is that businesses must not only anticipate the need for directional changes well in advance but also gradually build the framework necessary for such a transition, ensuring the firm can successfully navigate towards its new trajectory without catastrophe.
It is important to keep in mind that inertia is not merely a result of individual reluctance but is institutionalised within the very fabric of businesses, making transformation often appear to be a Herculean task. This is particularly true in the partnership model, where decision-making is distributed among multiple stakeholders. In such environments, the consensus-building process can significantly slow the adoption of change. Each partner may have different risk tolerances, investment horizons, and visions for the future, making it challenging to align on transformative actions quickly. Moreover, the very nature of a partnership, which often values stability and long-term relationships, can further entrench resistance to change.
In the partnership model, the consensus-building process that permeates such structures can significantly amplify resistance to change, a scenario that becomes even more pronounced in global firms. In these settings, corporate realpolitik rarely emerges victorious in situations that demand widespread change. These divisions are not just ideological but are also deeply rooted in vested interests, ethical convictions, and, notably, geographical differences. For instance, partners in different regions may have divergent views on market priorities, regulatory environments, and risk appetites, leading to a stalemate that hinders the firm’s ability to adapt swiftly.
This sluggishness in the face of necessary change is not merely a matter of logistical complexity; it is also a reflection of the human element at play within these firms. Partners, as stakeholders with significant investment in the firm’s direction, must reconcile not only their professional judgments but also their personal biases and regional loyalties. This dynamic, while fostering a rich tapestry of insight and experience, can also serve as a formidable barrier to embracing change, particularly when that change challenges the status quo or necessitates a shift in strategic direction. Addressing these challenges requires a nuanced approach that balances the need for consensus with the imperative for agility, underscoring the delicate balance that global partnerships must navigate in an ever-evolving business landscape.
Like sailors trusting old maps in new waters, firms often misinterpret market currents and technological development due to cognitive biases. They see what they want to see, not what’s truly there, leading to decisions that seem right in the moment but are disastrously wrong in hindsight.
Failures of information processing complicate the journey even further. Imagine if the ship’s compass was broken but no one checked it because “it’s always worked before.” In many firms, information flows through faulty systems, outdated hierarchies, or gets lost in silos, never reaching the decision-makers in time to avoid the iceberg.
Thus, it is here, at the intersection of behavioural economics, human psychology, corporate structure, and organisational inertia, that we find the strategic crux of the issue for professional service firms: how can firms cultivate an environment where adaptation is not only accepted but embraced?
The answer lies in creating a culture that values learning and instils with it a sense of psychological safety. From a strategic standpoint, this involves embedding adaptability into the organisational DNA. Leaders must champion a vision that encourages experimentation and tolerates failure (to a degree), understanding that innovation is inherently risky and not all endeavours will succeed. However, with the correct governing polices and organisational guardrails, this will not pose a threat to the business. By fostering a culture that views challenges as opportunities for growth, organisations can reduce the aversion to confronting uncomfortable truths.
Furthermore, accurate strategic foresight plays a crucial role. Anticipating future trends and preparing the initial groundwork for potential disruptions requires a commitment to staying informed and engaged with the external and internal environment. To do so adequately and successfully firms must ensure they have systems that ensure information is not only collected but also accurately analysed and promptly delivered to decision-makers. This proactive stance is the antithesis of “not wanting to know” and necessitates a shift in perspective from seeing change as a threat to viewing it as an opportunity. Not only will this allow the business to anticipate required changes of direction in advance, but also to begin building the framework of what the business will need to be to achieve it.
Overcoming the tendency to choose ignorance over insight demands a concerted effort at both the individual and organisational levels. It requires a blend of psychological understanding and strategic acumen to cultivate a culture that embraces change, values adaptability, and is willing to confront the uncomfortable truths that precede growth and innovation. By addressing the root causes of this behaviour—cognitive dissonance, loss aversion, and organisational inertia—leaders can guide their firms toward a future where adaptability and resilience are not just aspirational goals but lived realities.