The Local Team Knew: Why Regional Knowledge Never Reaches the Decision

A decision gets made at head office. A new market, a price, and a partner. Four months of work go into it. The regional team sees it and they know straight away that this will not work in their market. Five months later, it’s failed. And in the review, someone asks that question: did anyone know about the partner? And the regional team says, yeah, we knew from the start. Today I want to look at why that happens to good companies run by great people, and what we can do to stop it. I’m Brendan Quinn, and this is Cultural Friction. Twenty minutes or so about one real problem and what we can actually do about it. Today: why the knowledge that would have saved a regional launch never reaches the people making the decision. Let’s go.

So let’s look at Daniel and let’s look at Ana. So Daniel is a commercial director at head office. He’s really good at his job. He’s opened three markets in the last four years, and two of them are doing really well. This year, the plan is a fourth market, and Daniel’s team has spent four months on it. They’ve got the pricing model, a launch date, the distribution partner that the company has already worked with is ready to go, and they’ve already used this distribution company in two other regions.

Ana runs the regional office in the market. She’s been there six years, she’s got a team of 12 people, and she knows the customers, the competitors, and most of the people who matter in that industry locally. She sees the plan for the first time on a regional leadership call about a couple of weeks before the launch, and within 10 minutes, she knows three things. The price is too high — not by a little, it’s well above what customers in her market will pay for that kind of product. She’s watched two competitors try that price and end up lowering it within a year. The partner is a problem. Everyone in her office knows the partner. Two people on her team used to work there, and both of them left for the same reason. Nobody at head office knows this because nobody at head office has ever had to deal with this partner in this market. And the launch date lands in the quietest buying months of the year in her market. The whole industry there slows right down during that month. Daniel’s team picked it because it fits the global calendar, but it just does not fit Ana’s market.

So what does Ana say? Well, she says this in that meeting. That’s what she says on the call, in front of the regional leaders from four of the markets and three people from Daniel’s team. Daniel says, “Good, let’s pick up on that and let’s deal with it offline.” And he moves on to the next item. Now the problem is, “let’s pick that up offline” sometimes means that nobody really picks it up. Now that might seem strange, but I’ve seen this a lot, where people just plough on through with their plans, regardless of those little signs that might be telling them this isn’t going to work. Anyway, the launch goes ahead.

Now let’s stop and look at what each of them understood in that moment — on that call, in the meeting where Ana raised her concerns — because that’s where the whole thing starts to slide. Ana understood that she had told head office, in the clearest way possible and acceptable for her, that the plan wouldn’t work. In her working culture, telling a senior person from the centre, from head office, that his four-month plan that his whole team’s been working on — and telling him in front of all of his colleagues — that it won’t work, is a really big move. So from where she sat, the message had been delivered. Head office had heard it, and head office had decided to go ahead anyway. And that’s their decision to make at head office. Daniel understood that he had heard a regional manager asking for a small adjustment: a pricing detail, a check on the partner — a partner that they’ve used in lots of other markets. Both sounded like things the launch team could handle. He wasn’t brushing her off; he was doing what a good chair does with a detail in a full meeting. He parked it so the meeting could move on, and in his mind, if the problem had been serious, she’d have said it in a much more direct and clear and serious way. But Ana wasn’t being timid, and Daniel isn’t being arrogant. It’s just that one sentence means two completely different things to two completely different people.

So the launch misses its numbers in month one, in month two, in month three. Customers just don’t buy that product at that price in this market. The partner doesn’t deliver what was agreed, and the regional team spends weeks managing the partner instead of actually selling the product. And by month five, head office has to make a decision. They cut the price, they unwind the partner deal, they relaunch. So the company pays twice: once for the launch that failed, and again for the work to put it right. And while all of this is happening, there’s a competitor who understood the market, and he goes on to take those customers that our client was counting on. That’s three months of lost sales in that region. And in some markets it’s more than three months, because the first impression is already made — and we know that once that first impression is made, if it’s negative, it doesn’t matter how good that product is, it’s going to struggle to get traction in that market and to get the kind of sales everybody’s hoping it’s going to get. And Ana could have given them all of this information, because it’s there — she has it, she’s worked in this market for years, she’s got a whole team that understands this market. But the problem is that nobody asked.

So why does this happen? The information existed inside the company; nobody needed to go out and find it anywhere. It just failed to travel from where it was known to where the decisions get made. So there’s a couple of reasons why I think this happens, and the first one is this: it’s all about where the decision rights sit. So in most international companies, the important decisions are held at the centre, in head office. So it’s head office that decides, and the regions execute those decisions. And that’s not a bad design in itself — it gives you consistency and it means that someone is accountable. Christopher Bartlett and Sumantra Ghoshal studied how large international companies actually work, and they found that in this kind of company, knowledge flows in one direction: it goes from the centre out. The regions receive plans, targets, and products. They rarely send anything back that changes a decision. And the companies that did best in their research were the ones that treated their regional offices as sources of knowledge, not just places where the plan gets carried out.

So the second reason is all about power distance. And power distance is the extent to which people with less power in an organisation accept that power is distributed unequally in that organisation. In a working culture with high power distance, the gap between the centre, the head office, and the region is real. People can feel it — it’s quite tangible. So challenging somebody above you has a real consequence; there’s a real cost associated with that. And so people don’t want to pay that cost, because that could result in a stalled career, it could result in a reputation as being somebody who’s difficult or not a team player, or just simply being left out of the next conversation. So most people don’t want to pay that cost. They mention the problem once, they do it in a way that for them is clear, it’s careful — but then, when nothing changes, they stop.

So we looked at this in an episode called “You Said Your Door Was Open,” one of our previous podcast episodes. That was where Priya gave her manager the loudest warning that she could give, but her manager didn’t hear it as a warning — he just heard a routine comment. What Ana is doing is the same thing, it’s just one level up. It’s not one person and their boss; this is a whole region and the head office. And the consequence, the price of correcting head office in a meeting full of everybody, everybody watching you, eyes on you, everyone listening to you — that price is actually really, really high.

Now, there’s a piece of research that explains exactly what’s going on in Ana’s head at this moment. Jim Detert and Amy Edmondson — you may know Amy Edmondson as the person who wrote The Fearless Organization, all about psychological safety in our teams. So they have this piece of research that studied why people stay quiet at work even when they have something really important to say. And they found that most of us carry a set of beliefs about speaking up. They call them implicit voice theories — implicit because we never say them out loud, we just act on them. Here are some of the beliefs they found: don’t embarrass a senior person in public; don’t raise a problem unless you also have the solution; don’t speak unless you have solid data to back you up; and if the boss is personally attached to the idea, leave it alone. Look at Ana’s position against that list. The plan is Daniel’s. He’s senior, he’s from the centre, he’s from head office. She’s on a call with people from four other markets, and what does she have? A price she knows is wrong, but no spreadsheet to prove it, because this is the first time she’s really hearing about it. A partner that she knows is bad, but her evidence is two people in her team who used to work there. She has this knowledge and this evidence, but it’s not real hard data. So every one of these beliefs tells her the same thing: say it softly, say it once, and then leave it. And that’s exactly what she did.

So, what can we do about it? The fix isn’t to give the region control of the decision. Daniel should still make that decision — he’s head office, that’s where the strategy is being developed. The fix is to make sure the region gets an input — that the knowledge they have gets to head office in time for it to actually make a difference. So I’m going to split this into two halves, with two changes in each. The first half is about when we ask and how we ask. The second half is about what happens when we get an answer. So here’s our first half.

When we ask and how we ask. So first: bring the region in before the decision, not after. This is the most powerful and probably the most obvious change, and it’s the simplest. If Ana only sees the plan when it’s finished, she cannot influence it — she can only object to it, and objecting to a finished plan is expensive, for all the reasons we’ve already mentioned. So we move the conversation earlier — not to the launch call, but to the point where the plan is still just a set of options. “We’re looking at your market next year. Here are three ways we could enter. How do you see this working? Anything you think is interesting, anything that could go wrong here?” And at that point, Ana isn’t correcting anyone, she’s helping to build something. Same knowledge, completely different conversation, and no cost to her for giving it.

Now, the second: ask the people who actually know, and ask very specific questions. If Daniel had asked Ana “any concerns about the plan?”, he’d very likely have got a no. The question is just too general, and it’s too easy to say no to. What he needed was three direct questions. Will this price work in your market? Will this partner help us or damage us? What will customers in your market actually do in the first 90 days? Specific questions do two things. They tell the person exactly what you want to know, so they don’t have to guess whether their concern is the kind you’re looking for. And they change what the answer is. “No, that price won’t work here” is an answer to a question; it’s not a challenge to a plan. Ana isn’t volunteering a correction anymore, she’s answering the commercial director who’s asked a very specific question that requires a very specific answer. It makes that process easier. And ask the right person — not the regional director you joined last quarter, but the person who’s been in the market for six years, whose team has to work with the partner. That’s the person we need to be asking, not the person who’s just joined. So that’s our first half.

And here’s the second half: what happens when we get an answer. The first thing is that we have to make it safe to disagree. If disagreeing with head office is risky, we only ever hear agreement — and agreement gives us no information at all. A plan everyone agrees with might be a good plan, or it could be a terrible plan that nobody dared to question. So making it safe is mostly about how we respond in the moment. When Ana says “that price won’t work here,” the response that keeps her talking is “tell me more — what would work?” That opens up a conversation. The response that ends the conversation is “well, it worked in the other three markets” — and that’s probably one of the most natural responses you’ll hear people say. It’s defensive, on the back foot: somebody’s pushing back, so I’m going to push back again. And that closes down the conversation. And it matters, because the person has to be no worse off for having spoken — not overruled and then quietly moved down the list, because that’s a consequence of them having spoken up. They don’t need to be left out of the next decisions just because they pushed back — because their pushback is actually key to making this successful. And if all the people around them are watching what happens to the person who makes that first disagreement, that first bit of pushback, and they see that it doesn’t go well, we’re not going to get other people to push back when we really need them to.

Now, the second thing is to tell people what happened to their input, even when we’ve made a different decision. And this is one that gets forgotten a lot. Suppose Daniel hears Ana out, and then he thinks about it and decides to keep the price where it is, for reasons that make sense at a global strategic level. That’s his call. But he then owes Ana an explanation. “You told me the price was too high for your market. We’ve kept it for now, because the global pricing structure is the way it is, it fits in with the strategy. And here’s what we’re going to watch in that first quarter.” That’s it. Ana has now learned that her input went somewhere, it was considered, it affected how the launch is being watched — and so the next time she knows something, she’ll say it, because she knows it doesn’t just get batted away, it doesn’t just disappear. If people never hear what happened to what they said, they stop saying it. It’s not because they’re angry; it’s just a sensible observation — “nothing ever happened when I said something, so why should I say something?” And finally: none of these asks Ana to change, to be braver, to speak more directly. They don’t ask her to change her working culture or anything like that. Every one of them changes something that head office controls — when we ask, what we ask, how we respond, and what we say afterwards. Daniel keeps the decision; he just makes it with the information the company already has.

So if you’re going to take one thing away from this episode, I’d love it to be this. The deal didn’t fail because the company lacked the knowledge to get it right. The knowledge was already there, inside the organisation. The deal failed because the information and the decision are in two different places, and there isn’t anything connecting them. Fixing this doesn’t mean handing the decision to the region — it means making sure what the region knows reaches head office in time for it to actually make a difference. We need to ask earlier, ask specifically, and make it safe to answer, in a way that may mean we hear things we don’t want to hear. And then, when people do give us things we don’t want to hear, we tell them what we’ve done with it, so they know that when they make contributions, they’re listened to, they’re considered, and they’re acted upon.

If this is a live issue for your team right now, that’s exactly the kind of thing I work through one-to-one with leaders — through advisory, through coaching, and through workshops. You can find out more about the work that I do by visiting brendanthomasquinn.com, and you can also find me on LinkedIn.