Why Canadian CEOs Are More Chicken Than They Think

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In early September, an Apple executive described a shift in the firm’s product line with a word usually associated with war heroes and disaster survivors. The firm was ditching the headphone jack on its new iPhone, said marketing chief Phil Schiller. “The reason to move on: courage,” he explained. “The courage to move on to do something new that betters us all.” Online ridicule of the boast came swiftly.

But Schiller’s mistake wasn’t claiming bravery, it was bragging about it. Altering the design of Apple’s most popular product did require courage, particularly when a backlash was guaranteed. The corporation has a history of making daring bets; it faced a similar consumer uprising for abandoning disk drives. The annals of American business are filled with these tales, from IBM selling its PC division, to Netflix making the leap into video streaming. In comparison to these Yankee neighbours, Canadian firms can look downright cowardly.

That isn’t a generalization but an empirical fact. A 2011 study by Deloitte found Canadian executives to be far more risk-averse than their U.S. counterparts. A follow-up study released this fall confirmed we’re a milquetoast nation. The management consultancy surveyed 1,200 business leaders across the country, probing them on their tolerance for calculated risk and challenging the status quo. They concluded only 11% of Canadian firms could be considered “courageous,” while another 30% were headed that way. Such bravery eluded most respondents, however, with 43% classified as “hesitant” and another 15% viewed as “fearful.” Canadian firms “shy away from making key investments and executing dynamic strategies,” the study concluded. This reluctance hurts them. Seven in 10 of the courageous firms saw revenues increase last year, compared with less than half of the fearful ones.

Most worrisome, the executives didn’t realize they have the hearts of chickens. More than 40% of those surveyed identified their companies as “courageous,” four times the number that met the researchers’ standard.

There are practical steps that any organization can pursue to make itself bold. Courageous companies invest in R&D and offer incentives to employees who take chances, rather than punishing calculated risks that lead to failure. They also encourage engagement between groups, whether it’s executives connecting with employees or the company as a whole interacting with its community. Bravery means not being afraid to hear about shortcomings.

These practices can help a company build its courage. But it ultimately comes down to the character of its leaders. Writing in 1963, management consultant Peter Drucker observed the best executive “had the courage to go through with logical decisions—despite the all pleas to give this or that product one more chance, despite all the specious alibis.” You can create a checklist for a product launch, but “I know of no checklist for managerial courage,” Drucker said. It takes a leader to say “Jump,” or “Fire,” or “Stop.”

James Cowan is the editor-in-chief of Canadian Business.

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