‘All or nothing’ business strategies can backfire, study suggests

When a company launches a new initiative, framing it as an “all or nothing” pathway to success is tempting, especially when the goal is restoring the status quo of years before, perhaps when business was more profitable.

But is it the best approach?

Not always, according to a new study co-authored by Matthew Lyle, assistant professor at Binghamton University, State University of New York’s School of Management. Researchers found that “all or nothing” strategies are more likely to weaken employees’ support for future initiatives if those plans fail to completely meet the objective. Instead, managers should frame new initiatives as chances to improve upon what they have done wrong while building on what they have done right.

“We know that history can be very motivating—returning to a proud period and using it as an inspiration to break away from an awful period—but we found in this study that you can motivate people more effectively by telling them that even their attempt to enact the initiative is valiant,” Lyle said. “That’s enough to get people on board so you can get the support you need to make a change happen.”

Lyle and his co-researchers believe a good way to start is by encouraging the more experienced employees to share their memories of previous initiatives—successes and failures—openly and honestly. This can create strong bonds that outlast a single strategic initiative, Lyle said.

Their study, “Generation Gap? The Branching Influence of Historical Myths,” published in the journal Organization Science involved examining two union organizations within major South Korean broadcasters. Both displayed distinct generations of cohorts shaped by experiences and memories of South Korea’s media democratization struggles from the late 1980s to the early 1990s.

Between 2009 and 2012, new CEOs were appointed to each organization, and during that time, journalists perceived internal pressure to provide biased coverage alongside stories involving public criticism. Unions at both broadcasters went on strike in 2012 to remove their CEOs and advocate for their journalistic values, but both strikes ended without achieving their goals.

Lyle and fellow researchers analyzed data collected through direct interviews, analysis of online message boards used by senior and junior members of both unions to share news and opinions, and 30 YouTube videos produced by the unions. A co-author of the study also spent significant time alongside strike participants attending rallies, protests and informal gatherings.

Based on the information gathered, researchers determined that when organizations talk about learning from an entirely positive past to prevent a disastrous future, failure leads people to avoid collective discussions about what happened and, therefore, miss opportunities to learn from it.

As a result, Lyle said, they develop a feeling of “learned helplessness,” and people tend to ask themselves or others, “What’s the point in trying again?”

When another chance at organizing a strike arose in 2014, one of the unions avoided it. Junior employees felt they had betrayed an organization that had “always succeeded,” describing it now as being in a “vegetative state,” unable to try again when the previous failure effectively paralyzed them.

By contrast, the study noted, the union exposed to “a largely shameful past” in 2012 jumped at the opportunity to strike again, viewing this as an opportunity to finish what they had started when their shameful history ended—and their proud one began—two years prior. This union viewed the simple act of striking in 2012 as a historic turn and endured through the failure. Their success in forcing the CEO’s resignation in 2014 appeared rooted in how they motivated participants in 2012, according to the researchers.

“There’s a good use for this research in any organization wondering if it can stay afloat. I would encourage them to be more honest about what needs to get done and acknowledge that, while they likely haven’t always succeeded, everyone’s going to do their best now to draw upon those positive elements of the past to make a better future,” Lyle said. “Some might view that concept as ‘loser talk,’ but we’ve found that it’s much more sustainable as a strategy in the long run.”