Unknowns are everywhere. Senior leaders hesitate to commit. Teams are asked to "wait until we know more," yet each milestone brings fresh questions, fueling further delay.
Corporate innovation leaders across multiple industries report their organizations are moving, but mostly placing safe bets, citing "other priorities," "risk-averse leaders," and "long-term planning cycles" as the primary causes.
Dr. Rebecca Homkes (London Business School and Duke), Frank Mattes (Lean Startup) and Ryan Larcom (Alloy Partners) address the structural and cultural forces creating paralysis and the specific operating models designed to break the cycle.
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The Diagnosis: Delusion, Paralysis, and Frenzy
Identify organizational reactions to uncertainty
Rebecca identifies three common responses leaders exhibit when facing the unknown: "Delusion, paralysis and frenzy. In most crises or periods of uncertainty, I see a mix of all three. I'm really seeing an over-index to paralysis right now."
In the current climate, paralysis manifests as a waiting game. Leaders delay decisions, hoping for a "false sense of clarity" before making big bets. They wait for interest rates to stabilize, for election results, or for competitor moves. Conversely, some organizations fall into a frenzy—throwing resources at the market without direction, hoping something sticks.
Building on this behavioral diagnosis, Frank argues that this hesitation has financial consequences. "Fear has become a big cost center, so it drags everything down." He notes that leaders often view decision-making in the unknown as "politically dangerous."
Ryan adds that this hesitation is paradoxical given the resources available. "Corporations are sitting on historic levels of cash… studies show that the best time to innovate is in down economies." Yet, without clear priority, a "diffuse throw-everything-at-the-wall is taking hold."
Reframing Uncertainty and Value Creation
Transform "uncertainty" from threat to opportunity
The first step to breaking paralysis is a linguistic and conceptual reframe. We often treat "uncertainty" as a synonym for "bad." Rebecca challenges this directly.
"Uncertainty is a series of future events that may or may not occur. Whether or not those events are good or bad depends on what you're trying to do and how you're set up."
In fact, uncertainty is the best time to grow… because it's the most powerful time to learn, experiment and innovate as feedback loops are tighter.
While the environment changes, the fundamental goal does not. Rebecca insists that leaders must anchor themselves in the unchanging definition of strategy. "The definition of value creation has not changed… it's still about driving the biggest gap between customer willingness to pay and total cost of delivery."
To achieve this in an uncertain world, the organizational stance must shift. Our job is to be in heads up learning mode, not heads down execution mode. "Heads down" focuses on hitting daily execution metrics—a trap during volatility. "Heads up" focuses on scanning for insights.
Strategic Options: Selling Peace of Mind
Frame innovation as insurance, not just growth
For organizations that remain strictly risk-averse, Frank suggests framing innovation not just as growth, but as insurance.
"Why not take this constraint as an opportunity and focus ourselves on preparing technology options?" Even if a company is not ready to launch a new business model, they can use this time to build the capability to do so when conditions change.
"At the end of the day… you also sell a little bit of peace of mind: whatever the uncertainty will bring, we are prepared." This approach keeps the innovation engine running by aligning it with the risk-mitigation mindset of the core business.
The Problem of "Watermelon Dashboards"
Moving from mindset to measurement, Frank identifies that hesitation is often structural, rooted in how organizations report progress. He warns against "watermelon dashboards"—metrics that are "green on the outside, but if you dip a little bit deeper, they suddenly turn red."
These dashboards create a false sense of security while hiding the true risks of new growth initiatives. The problem intensifies because strategic growth initiatives are often "intellectual bets" that change multiple aspects of the business model simultaneously. The hesitation stems from a lack of transparency regarding these risks.
"You cannot fix hesitation with a purely intellectual argument. It needs to go deeper. Speed comes from an operating model, and not from some slogans or alignment meetings."
Frank proposes an operating model that balances the urge for short-term measurable outcomes with shared ownership for risks. This concept of shared ownership is non-negotiable.
Innovation as Capital Allocation, Not P&L
Restructure how innovation spend is measured and governed
Taking this measurement challenge deeper, Ryan diagnoses a fundamental mismatch in how innovation is measured versus how it operates. The hesitation cycle is reinforced when long-term exploration is forced into short-term reporting structures.
"Most teams are asked to measure the wrong metrics. Quarterly earning cycles are driving short-term thinking… innovation is being measured in short-term ways."
The solution requires a fundamental reset. We need to reset innovation as a capital allocation rather than a P&L allocation. By viewing innovation spend as a balance sheet investment—similar to R&D or capital expenditures—organizations can ask different questions about risk-adjusted returns rather than immediate profitability.
Two Weeks is Too Long: The Physics of Experiments
Design experiments that deliver insights in days, not months
Once the financial and strategic frames are reset, the tactical execution must change to match. The speed of learning must increase.
There should be a strict constraint for experimentation: "Two weeks is too long. If we have to wait more than two weeks to get an initial insight, the experiment was poorly designed.", Rebecca says.
A critical distinction often confuses teams: Pilots and experiments are not the same things. Pilots test scalability, not feasibility. By the time you're running a pilot, you should have run an experiment on every single assumption within that in the most cost-effective way possible.
Ryan agrees, urging teams to shrink our experiments down way, way smaller. The goal is not to solve the whole business model at once but to "stop asking very large meta questions and instead understand all the assumptions that sit inside those questions."
"How do we gain confidence by taking really fast, cheap and weird experiments?" The fundamental principle: "Action creates data." Rather than debating strategy in a boardroom, teams should take the smallest possible step to generate real-world feedback.
The "What Must Be True?" Standard
Replace opinions with testable assumptions
To move from internal debate to market action, think of the mechanism that founders of Match.com use: banning opinions.
"Opinions are out of the way. The only one who gets an opinion is the market."
When a team member says, "I think this is a good idea," the leader must shift the prompt. The question becomes: "What would have to be true for this to be a great idea?"
This shifts the conversation from subjective bias to objective verification. The team lists the variables that must be true, ranks them by uncertainty, and tests them. This creates what Rebecca calls a "learning loop."
"A learning loop is about going through this mode of I execute in the market, I get an insight. I embed that insight in the organization, experiment and execute again."
The impact on leadership dynamics is profound. Ryan adds that when you expose assumptions in this way, the dynamic with leadership changes. "When you expose all of the assumptions… suddenly leaders stop sitting on one side of the table throwing darts at your idea." Instead, they join the problem-solving process.
Aligned Speed: The Formula One Model
Codify decision rights to eliminate committee delays
Ultimately, breaking the cycle of hesitation requires clarity on who makes the decision. Ambiguity in decision rights is a primary cause of slowness.
Formula One has a principle in place for this. In F1, decision rights transfer based on the physical location of the car. When the car is in the factory, the head of operations decides. When it is on the track, the head of race strategy decides.
"This is all about aligned speed. Alignment without speed is too slow to matter. Speed without alignment is chaos."
Corporate hesitation is rarely a strategy; it’s the symptom of outdated structures, misaligned incentives, and a cultural bias toward safety.
But as Rebecca, Frank and Ryan highlight, this moment is not a threat—it’s a competitive window, that asks leaders to start optimizing for the speed and direction of their learning.
