Whether it’s new technology or a new business model, the default state of every new idea is “No.” Most organizations, especially large and established ones, are risk-averse by nature. They prefer the safety of what has worked before over the uncertainty of something new. And that fear of the unknown often leads to rejection—even when innovation is crucial for long-term success.

About a year ago, I pitched a good friend of mine, who is the Head of IT for a large logistics company, on a custom AI solution. Our conversation had started casually, touching on some of the challenges his employer was facing: inefficient processes, ballooning costs, and missed opportunities for automation. I saw potential. I saw ways to solve these challenges with AI—ways that could result in dramatic cost and time savings.

So, I put together a proposal.

After I sent it over, I reached out. “Hey, I sent you the proposal. Let me know if you need anything else,” I said. He replied, “I need you to lower the cost.” Then he added something that told me everything I needed to know: “I’ll have to stick my neck out for this, and I’m not sure I want to do that.”

That hesitation wasn’t about the numbers on the page—it was about culture.

The Culture of “No”

In large, established businesses, innovation often dies not because the ideas aren’t good enough, but because decision-makers are unwilling to take risks. My friend’s reluctance to stick his neck out spoke volumes about the culture of his company. It was a culture where sticking to the status quo was safer than taking a chance on improvement—even when the potential benefits were clear.

Risk-averse cultures are the greatest blockers to innovation. When decision-makers protect their careers by avoiding risk, the entire organization stagnates. Experimentation is at the core of innovation, and if a company fears experimentation, it ultimately fears progress.

A Tale of Two Companies

Nothing happened with that logistics company. The culture was too risk-averse, and my friend wasn’t ready to put his neck on the line for the proposal. But it was a valuable reminder: even the best ideas can fail if the environment isn’t right for them.

A month before, I closed a proposal with another, much larger logistics company. We started conversations with their Head of IT but quickly realized we needed buy-in from the top. So, we asked for a meeting with their CEO. A week later, we met with the CEO, and things moved fast from there because he was already thinking about how to use technology to eliminate inefficiencies, reduce problems, and automate processes. He was open to new ideas and pointed us in the direction where those problems existed.

The difference was leadership. The CEO of the second company wasn’t afraid to take risks. He understood that experimentation was necessary to solve their challenges and move the company forward. He fostered a culture where innovation was encouraged, not feared.

The Truth About Risk-Aversion and Innovation

The truth is, innovation is the opposite of predictable; innovation requires bravery. It requires decision-makers who are willing to take a chance. When decision-makers protect their careers by avoiding risk, they create an environment where new ideas struggle to survive. A risk-averse culture becomes a barrier to growth and progress.

If you’re in a leadership position, it’s essential to recognize that avoiding risk often means avoiding progress. Encouraging a culture of experimentation—where it’s safe to test, fail, and learn—is key to driving innovation. Without it, the organization stagnates, and opportunities are missed.

The difference between companies that innovate and those that don’t often comes down to culture. A culture that encourages experimentation and calculated risk-taking is fertile ground for new ideas. A culture that fears the unknown, on the other hand, stifles creativity and growth.

To move beyond a culture of “No,” organizations need leaders who are willing to champion new ideas, even if it means taking risks. They need decision-makers who understand that the potential rewards of innovation far outweigh the comfort of the status quo. Only then can they create an environment where new ideas can thrive, and real progress can be made.

Bottom line: If you’re afraid of experimentation you’re afraid of innovation.