“The call is coming from inside the house” is one of those classic quotes that crossed over from urban legend and horror movies to become a common pop-culture phrase. While originally a warning to teenage babysitters, recent research indicates that it’s also a warning to corporate execs that murderous business threats are closer than they think.
In the early weeks of 2025, Box of Crayons, a Toronto-based learning and development company, partnered with The Harris Poll to survey over 1500 business leaders and knowledge workers to diagnose and understand the greatest challenges facing organizations.
They found that “while there is a tendency to focus on external pressures like economic uncertainty, technological disruptions, and labor market issues, our research shows the most critical challenges are unfolding within the workplace itself.”
The threat is coming from inside your house.
Here’s what they found and what you can do about it
Nearly 1 day each workweek “is lost to the fear of making mistakes.”
Fear is at the core of all the issues making headlines – burnout, disengagement, lost productivity. It “breeds doubt, prompting individuals to question themselves and others, instigating anxiety, hindering productivity, and promoting blame instead of teamwork.”
Fear is also a virus, spreading rapidly from one person to their team members and on and on until it infects the entire organization, embedding itself in the culture.
Executives and managers are key to breaking the cycle of fear that kills innovation, initiative, and growth. By reframing mistakes and learnings, rewarding smart risks even if they result in unexpected outcomes, and role-modeling behaviors that encourage trust and psychological safety, their daily and consistent actions can encourage bravery and remaking the culture.
70% of people don’t see value in listening to people they disagree with.
Unless you’re employed by Lumon Industries, it’s impossible to be a completely different person at work compared to who you are outside of work. So, it should come as no surprise that most people no longer listen to opinions, perspectives, or evidence with which they disagree.
The problem is that different perspectives and experiences are essential to elements of the problem-solving process. Without them, we cannot learn, develop new solutions, and innovate.
Again, executives and managers play a critical role in helping to surface diverse points of view and helping employees to engage in “productive conflict.” Rather than rushing to “consensus” or rapidly making a decision, by expressing curiosity and asking questions, people-leaders create space for new points of view and role model how to encourage and use it.
87% of leaders lack the skills needed to adapt. 64% say funding to build those skills has been cut.
Business leaders are fully aware of the changes happening within their teams, organizations, and the broader world. They recognize the need to constantly adapt, learn, and develop the skills required to respond to these changes. They can even articulate what they need help with, why, and how it will benefit the team or organization.
But leadership training is often one of the first items to be cut, leaving new and experienced people-leaders “ill-equipped to manage the increasing complexity of today’s workplace, stifling their ability to inspire, guide, and support their teams effectively.”
The solution is simple – invest in people. Given the acute need for support and training, forget big programs, multi-day offsites, and centralized learning agendas. Talk to the people asking for help to understand what they want and need and how they learn best. Share what you can do right now with the resources you have and engage them in creating a plan that helps them within the constraints of the current context.
Answer the phone
Just like that terrifying movie moment, the call threatening your business isn’t coming from mysterious outside forces—it’s echoing through your own hallways. The good news? Unlike those helpless babysitters in horror films, you can change the ending by confronting these internal threats head-on.
What internal “call” is your organization ignoring that deserves immediate attention?
“A Few Good Men” is one of my favorite movies. As much as I love Jack Nicholson’s classic line, “You can’t handle the truth!” lately, I’ve been thinking more about a line delivered by Lt. Daniel Kaffee, played by Tom Cruise – “And the hits just keep on comin’.”
But, just like Lt. Kaffee had to make peace with Lt. Cdr JoAnne Galloway joining his Cuba trip, we must make peace with uncertainty and find the guts to move forward.
This is much easier said than done, but these three steps make it possible. Even profitable.
Where We Begin
Imagine you’re the CEO of Midwest Precision Components (MPW), a $75 million manufacturer of specialized valves and fittings. Forty percent of your components come from suppliers now subject to new tariffs, which, if they stay in effect, threaten an increase of 15% in material costs. This increase would devastate your margins and could require you to reduce staff.
Your competitors are scrambling to replace foreign suppliers with domestic ones. But you know that such rapid changes are also risky since higher domestic prices eat into your margins (though hopefully less than 15%), and insufficient time to quality test new parts could lead to product issues and lost customers. And all this activity assumes that the tariffs stay in place and aren’t suddenly paused or withdrawn.
3 Steps Forward
Entering the boardroom, you notice that the CFO looks more nervous than usual, and your head of Supply Chain is fighting a losing battle with a giant stack of catalogs. Taking a deep breath, you resolve to be creative, not reactive (same letters, different outcomes), and get to work.
Step 1: Start with the goal and work backward. The goal isn’t changing suppliers to reduce tariff impact. It’s maintaining profit margins without reducing headcount or product quality. With your CFO, you whiteboard a Reverse Income Statement, a tool that starts with required (not desired) profits to calculate necessary revenues and allowable costs. After running several scenarios, you land on believable assumptions that result in no more than a 4% increase in costs.
Step 2: Identify and prioritize assumptions. With the financial assumptions identified, you ask the leadership team to list everything that must be true to deliver the financial assumptions, their confidence that each of their assumptions is true, and the impact on the business and its bottom line if the assumption is wrong.
Knowing that your head of Sales is an unrelenting optimist and your Supply Chain head is mired in a world of doom and gloom, you set a standard scale: High confidence means betting your annual salary, medium is a team dinner at a Michelin-starred restaurant, and low is a cup of coffee. High impact puts the company out of business, medium requires major shifts, and low means extra work but nothing crazy.
Step 3:Attack the deal killers. Going around the room, each person lists their “Deal Killers,” the Low Confidence – High Impact assumptions that pose the highest risk to the business. After some discussion to determine the primary assumptions at the beginning of causal chains, you select two for immediate action: (1) Alternative domestic suppliers can be found for the two highest-cost components, and (2) Current manufacturing processes can be quickly adapted to accommodate parts from new suppliers.
A Plan. A Timeline. A Sense of Calm.
With this new narrowed focus, your team sets a shared goal of resolving these two assumptions within 30 days. Together, they set clear weekly deliverables and reallocate time and people to help meet deadlines.
A sense of calm settles on the team. Not because they have everything figured out, but because they know exactly what the most important things to be done are, that those things are doable, and they are working together to do them.
How could you use these three steps to help you move forward through uncertainty?
Risk management is critical in uncertain times. But traditional approaches don’t always help when volatility, ambiguity, and complexity are off the charts.
What many leaders overlook in their rush to safety is that many of the most effective tools for managing risk come from an unexpected place: innovation.
The Counterintuitive Truth About Risk Management
Risk Management’s purpose isn’t to eliminate risks. It’s to proactively identify, plan for, and minimize risk. Innovation is inherently uncertain, so its tools are purpose-built to proactively identify, plan for, and minimize risk. They also help you gain clarity and act decisively—even in the most chaotic environments.
Here are just three of the many tools that successful companies use to find clarity in chaos.
Find the Root Cause
When performance dips, most leaders jump to fix symptoms. True risk management means digging deeper. Root cause analysis—particularly the “5 Whys”—helps uncover what’s really going on.
Toyota made this famous. In one case, a machine stopped working. The first “why” pointed to a blown fuse. The fifth “why” revealed a lack of maintenance systems. Solving that root issue prevented future breakdowns.
IBM reportedly used a similar approach to reduce customer churn. Pricing and product quality weren’t the problem—friction during onboarding was. After redesigning that experience, retention rose by 20%.
Focus on What You Can Actually Control
Trying to manage everything is a recipe for burnout. Better risk management starts by separating what you can control, what you can influence, and what you can only monitor. Then, allocate resources accordingly.
After 9/11, most airlines focused on uncontrollable external threats. Southwest Airlines doubled down on what they could control: operational efficiency, customer loyalty, and employee morale. They avoided layoffs and emerged stronger.
Unilever used a similar approach during the global supply chain crisis. Instead of obsessing over global shipping delays, they diversified suppliers and localized sourcing—reducing risk without driving up costs.
Attack Your “Deal Killer” Assumptions
Every plan is based on assumptions. Great risk management means identifying the ones that could sink your strategy—and testing them before you invest too much time or money.
Dropbox did this early on. Instead of building a full product, they made a simple video to test whether people wanted file-syncing software. They validated demand, secured funding, and avoided wasted development.
GE applied this logic in its FastWorks program. One product team tested their idea with a quick prototype. Customer feedback revealed a completely different need—saving the company millions in misdirected R&D.
Risk Management Needs Innovation’s Tools for a VUCA World
The best risk managers don’t just react to uncertainty—they prepare for it. These tools aren’t just for innovation—they’re practical, proven ways to reduce risk, respond faster, and make smarter decisions when the future feels murky.
What tools or strategies have helped you manage risk during uncertain times? I’d love to hear in the comments.
Nothing drives my husband more insane than when the “80/20 Rule” is invoked. Whenever we’re doing something and I wave my hand and say “Eh, it’s good enough,” I watch, mildly amused, as he takes a deep breath, tenses his shoulders, and tries his very very best to find a way to explain to me that it is either right or wrong and that there is no such thing as “good enough.”
The look on my husband’s face when I say “it’s good enough”
When you consider that he spent 6 years as an officer in the US Navy’s nuclear submarine fleet, learning how to run nuclear reactors, and occasionally sleeping on missiles because they offered more room than his bunk, it’s easy to understand why he approaches the world with an All-of-Nothing mindset.
But most of us don’t live in a metal tube, deep under the ocean, side-by-side with nuclear warheads, knowing that the smallest spark could result in a long, agonizing death from suffocation, starvation, or melting (seriously, he has a story of nearly melting to death. It’s one of my favorites).
So why do we act like it when it comes to innovation?
Don’t believe me?
Every innovator working within a big company has had at least one moment in which they have very promising news — fantastic customer feedback on a new concept, promising early revenue from a small in-market test, genuine interest from a potential partner or acquisition — and it’s time to go to the powers that be and ask for more money and/or people.
They enter the meeting, bursting with optimism because they’ve always been told by the bosses that “We know innovation is more risky than our current business” and “we know we need to fund experiments because that’s how you de-risk innovations” and “we’ll find the money when we need it.”
They sit down, present the great news, share the data, outline the next steps, and make the Ask for the money that they were promised would be found the moment it was needed.
The look on your boss’ face when you ask for more money or people for an innovation project
The bosses are silent. Squirming uncomfortably in their seats, they start talking about the current business. Maybe it’s not doing so well so they need to funnel all the extra resources to it. Or maybe it’s doing great and they want to allocate all the extra resources to capitalize on the momentum. Or maybe it’s going exactly as expected but you never know what could happen so we need to hold on to the extra resources, just in case. And, by the way, you’re scrappy innovators, so see what you can do with what you’ve got.
This is when innovation runs into the Winner-Take-All Effect and, more often than not, it’s not the winner.
In this fascinating Medium article, James Clear asserts that,
“Not everything in life is a Winner-Take-All competition, but nearly every area of life is at least partially affected by limited resources. Any decision that involves using a limited resource like time or money will naturally result in a winner-take-all situation.”
All businesses face the challenge of limited resources. In fact, one could argue that business strategy is fundamentally about resource allocation decisions and that businesses succeed because they allocate resources better than their competitors.
The issue here is not that resources are limited and that they are, more often than not, allocated to existing business operations. The issue is that often they are ALL allocated to existing business operations.
Situations in which small differences in performance lead to outsized rewards are known as Winner-Take-All Effects.
Admittedly, the differences between innovation and core business projects are greater than the 1/100th of a second Olympic medal example Clear gives in his article. But given the context of a world that is transforming ever faster and in more unexpected ways, businesses can scarcely afford to commit all their resources to their existing businesses and treat the creation of new businesses as if it were fun little hobby.
There are countless reasons why this Effect seems to have taken hold — the need to deliver short-term quarterly results even at the expense of long-term investments, performance incentives that encourage people to adhere to the status quo, the ever-present demand to do more with less so the company can show higher profits. What’s important is not tracing the root causes. What’s important is figuring out how to overcome the root causes and shift towards a Results-Get-Rewards model.
This is probably the hardest part of working in innovation. Yes, there is a lot of advice (create a growth strategy, quantify the business results required from innovation, invest like a VC), many frameworks (70/20/10 ratio of innovation investment), and tons of tools and most of them are incredibly useful and very on-point. They are also not sufficient to escape the Winner-Take-All Effect.
The reason is that, ultimately, these frameworks and tools are applied by humans who are juggling more demands, decisions, and pressures than are accounted for in the frameworks and tools. Most business leaders have to juggle the tangible demands of sustaining the current business with the felt need to create new businesses. If they succeed at the former but fail at the latter, they will likely still be rewarded with performance bonuses and maybe even promotion. But if they succeed at the latter and miss on the former, they’ll be questioned, put on probation, and maybe even fired.
Your job, as someone trying to make innovation happen, is to help your boss to move past his or her risk aversion by addressing the risks (real or perceived) to the business AND to your boss individually.
In addition to pitching all of your great learnings (increased confidence from tests, and early revenue) you also need to tell your boss what’s in it for him or her. Perhaps the CEO has just announced a key strategic priority and this project is an example of how your boss/team/business unit is on the cutting edge (and can get your boss some face-time with the CEO). Perhaps someone was recently promoted because they “exemplify our company’s values of innovation and initiative” and this project positions your boss in a similar way.
To be clear, this is NOT manipulation and you should NOT say anything that is untrue. This is simply knowing your customer (your boss), knowing their important and unmet needs (build the business, feel secure in my job), and pitching a solution that addresses functional, social, and emotional needs.
Admittedly, this doesn’t work all the time but it works more often than you might think. They key is to be thoughtful, honest, and truly committed to advancing your innovation project AND the people working on it (your team) AND the people investing in it (your boss).
How your boss will look when you help him or her invest in building the existing business and creating the net new business
