The Shame—or Success—of Reversing Course

The EU offering the UK a way out of Brexit is a reminder that companies and countries regularly reverse decisions.

Is there a possibility 2018 could bring the “ultimate” flip flop? In a recent eye opening development, European Union president Donald Tusk told Britons that the U.K.’s decision to leave the bloc could be reversed. In other words, there could be an exit from Brexit. 

To be sure, that kind can change is a long way off.  But whether it is politics or business, seemingly monumental reversals do have precedent. After all, Coke quickly abandoned New Coke. Automaker Daimler merged with Chrysler and then unmerged after the deal didn’t work. Sweden even reversed which side of the road on which cars could legally drive. 

These flip-flops do raise questions (the original Brexit decision and any potential move to reverse it will be scrutinized for decades). Was the leader’s judgment or due diligence faulty when he or she made the original decision? Or is the decision to do a 180-degree turn a sign of incompetence? And sometimes reversing the original decision backfires. 

But the move to switch course can be the right one, too. Like so many things, the devil is in the details, says Sonamara Jeffreys, managing director for Korn Ferry and regional market leader for the EMEA Financial Services practice. “I don’t think you lose credibility when suddenly the scales have shifted, but obviously you can’t do that too often.”   

For instance, when a situation changes it can make sense to alter a recently-made decision, Jeffreys says. Beverage giant Coke shelved its New Coke after less than three months when it was clear the public didn’t like the new drink. It should be seen as both decisive and a learning experience for executives. The costs of developing New Coke had already been spent, and there was no way to recover it. Executives realized that they made a mistake and needed to avoid any potential future losses by killing New Coke. Fast action was the right course, experts say. Dithering could have been disastrous. “I see more criticisms of CEOs who can’t make decisions than of those who do,” says Jeffreys. 

Sometimes, it is better to have a view that it isn’t necessarily shared by everyone. Swedish citizens didn’t want to switch driving lanes, but in the 1960s it became clear that Sweden would be at odds with the rest of mainland Europe if it didn’t fall in line and drive on the right. On top of that most drivers had cars with the steering wheel on the wrong side of the vehicle which led to sometimes-avoidable accidents. In 1967, the government made the switch and Sweden fell in line with Europe.

Reversals also can help foster a risk-taking culture.People don’t like to admit their mistakes, that is human nature,” says Jeffreys. “But I wish they would because it promotes openness and transparency.” She says she would trust a leader more if they admitted to their errors. Plus, doing so can help create a culture where employees are willing to innovate in the workplace. “There are all sorts of benefits by having that sort of environment, such as fostering a willingness to take risks,” she says. Indeed, risk-taking and a willingness to fail is what makes Silicon Valley tech scene successful.