By Joel Gehman and Michael Lounsbury A recent column lamented that getting to “yes” on energy projects in Canada has never been tougher: Fossil-fuel developments, pipelines, mines, dams, transmission lines, and even wind turbines “are frequently contested, delayed or blocked.” But do such outcomes mean there is a problem? And if so, what kind of problem is it? Originally published in The Globe and Mail on March 3, 2015. https://www.theglobeandmail.com/opinion/on-big-resource-projects-when-does-no-mean-no/article23260658/

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On big resource projects,
when does ‘no’ mean ‘no’?
JOEL GEHMAN AND MICHAEL LOUNSBURY
Special to The Globe and Mail
Published Tuesday, Mar. 03, 2015 10:38AM EST
A recent column lamented that getting to “yes” on energy projects in Canada has never
been tougher: Fossil-fuel developments, pipelines, mines, dams, transmission lines, and
even wind turbines “are frequently contested, delayed or blocked.” But do such
outcomes mean there is a problem? And if so, what kind of problem is it?
Veto supporters rally in front of the White House on the same day U.S. President Barack
Obama vetoed a Republican bill approving the Keystone XL oil pipeline from Canada.
Reuters
The argument – ‘Getting to Yes’ – assumes that “yes” is somehow on the side of angels.
But a critical element of any great strategy is saying “no.” It’s Strategy 101. No
organization – whether a corporation, a nation-state or a non-profit – can say “yes” to
everything. Choices must be made. In his classic article “What Is Strategy?,” Harvard
professor Michael Porter put it bluntly: “The essence of strategy is choosing what not to
do.”

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Clearly then, “no” is often the better strategic choice. And yet, organizations often fall
into a “yes” trap. This is because, once set in motion, strategies are hard to reverse.
There are sunk costs, learning effects, organizational inertia and network externalities,
among other issues. And so, an organization can easily escalate its commitment to a
losing course of action. But in real-time, as these strategic decisions are unfolding, the
folly is often hard to stop.
One famous example is New York’s Shoreham Nuclear Plant. First proposed in April,
1966, the plant was expected to cost $75-million and come online by 1973. The plant was
eventually completed in October, 1985, only to be decommissioned in March, 1989,
having never sold any electricity. By that point total costs had ballooned to $5.5-billion.
Predictably, the plant’s owner, Long Island Lighting Company, was unable to survive as
an independent company. All because it refused to take “no” for an answer.
On the heels of President Obama’s recent veto, some advocates of the Keystone XL
pipeline have proudly proclaimed they won’t take “no” for an answer. Perhaps their
persistence in the face of “no” will prove prescient. Or perhaps Keystone XL is another
Shoreham Nuclear Plant in the making. Only time will tell. But all of this suggests that
perhaps Canada doesn’t have a “yes” problem; perhaps Canada has a “no” problem.
Entrepreneurs in Silicon Valley have a saying: “If you’re going to fail, fail fast.” By
comparison, getting to “no” on Canadian energy projects has been taking longer and
longer. That prompts some interesting questions. Why has Canada been taking so long
to get to “no”? How can we get to “no” faster? Why do so many organizations keep
chasing “yes” in the face of “no”? And, perhaps most importantly, what are the costs to
Canada of not taking “no” for an answer?
Joel Gehman (@joelgehman) is assistant professor of strategic management and
organization and Southam faculty fellow at the Alberta School of Business. Michael
Lounsbury is associate dean of research, professor of strategic management and
organization and Thornton A. Graham chair at the Alberta School of Business.
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