How many times have you been in a planning session and heard yourself use the phrase “cover all the bases”? It’s a phrase that feels good—it has a ring of prudence and thoughtfulness. But these four words can often produce the opposite of safety: sluggish organizations, wasted resources, and missed opportunities. I’ve said them myself. I’ve heard clients and colleagues say them. And almost without fail, these words trigger decisions that weigh down an organization rather than strengthen it.
We’re living in uncertain times, and that uncertainty can nudge even experienced leaders into playing it safe. The instinct is understandable. No one wants to overpromise or bet too heavily on the wrong initiative. But there’s a crucial difference between preparing thoughtfully for uncertainty and reacting to it by building layer upon layer of perceived safety into our plans. The first makes us resilient. The second leaves us exposed.
When Being Safe Spreads Us Too Thin
Faced with uncertainty, leaders sometimes try to protect against being wrong by backing everything. Instead of placing deliberate bets, we spread resources broadly across projects, functions, and markets. The reasoning is understandable: with chips placed on every square, at least one will pay off.
But this kind of hedging rarely works. Kodak, during its long decline, is a case in point. The company saw digital photography coming but couldn’t commit fully to any one direction. It invested in digital cameras, printers, film enhancements, online photo sharing—even dabbling in pharmaceuticals at one point. But no single initiative gained traction. Kodak was busy everywhere and successful nowhere. Its hesitancy wasn’t from lack of vision—it was from an inability to place bets. The “cover all bases” mindset scattered attention, drained cash, and left Kodak vulnerable to more focused competitors.
Brad Garlinghouse’s famous 2006 memo at Yahoo—known as the “Peanut Butter Manifesto”—coined the phrase for this common mistake. It described spreading strategy “like peanut butter on too much toast,” and it can serve as a guidepost if we feel our organizations are drifting toward trying to “cover all the bases.” Better to pick a slice of bread and spread thickly than to smear ourselves into irrelevance.
Seeking Safety In The Numbers
Overcautiousness doesn’t just diffuse focus—it blurs numbers. During the pandemic, many companies faced the pain of not having enough product on hand to meet demand. Shelves were bare, customers were frustrated, and leaders swore they’d never be caught short again. So when the supply chain stabilized, the pendulum swung hard in the other direction. Manufacturers and retailers raised their production and inventory forecasts just to be safe.
What happened? Warehouses filled to bursting. Retailers found themselves saddled with excess goods, much of it already losing relevance as consumers moved on. Target, for example, admitted in 2022 that it had badly overestimated demand, leaving billions in inventory it had to mark down or liquidate. The “safe” financial forecast looked responsible in the moment, but it ultimately produced enormous waste and weakened margins.
And it doesn’t take a pandemic to surface other similar examples. In the 1970s and 1980s, Detroit carmakers routinely padded production forecasts to protect themselves from being caught short. But “safe” forecasting led to chronic overproduction. Dealers’ lots were packed with unsold vehicles. Incentives and rebates became the norm, eating into margins and cheapening brands. Competitors like Toyota, which relied on leaner, more accurate forecasting, grabbed market share by delivering what customers actually wanted, without flooding the channel.
Overcautious strategies naturally nudge us toward overcautious financial forecasts, which don’t just waste money—they alter behavior. Teams build excess capacity, stockpile inventory, and over-invest in infrastructure. Eventually, an organization that once prided itself on efficiency becomes bogged down in the very inefficiency it tried to avoid.
Overcautiousness, Amplified
What makes overcautiousness especially harmful is the way it multiplies as it travels down an organization. A strategy that tries to cover every option at the leadership level turns into confusion among our teams: no one knows which priorities really matter, so no one feels ownership. As leaders, we might think we’re simply being careful, but our teams experience it as hesitation, lack of clarity, and even distrust. Over time, the culture itself absorbs the message that playing it safe is the only way to stay out of trouble.
How to Avoid the Trap
The answer—of course—isn’t to throw caution to the wind. We need thoughtful preparation. But we also need the courage to distinguish between planning for uncertainty, which strengthens resilience, and being ruled by uncertainty, which drains vitality. Here are practices I’ve found useful for maintaining that balance:
- Scenario Planning: Rather than a “peanut butter” approach, develop multiple plausible futures—optimistic, pessimistic, and disruptive—and test strategies against them.
- Probabilistic Financial Forecasting: Use strategy to assign likelihoods rather than creating safe buffers. This gives a clearer picture of risks without inflating estimates.
- Small Pilots, Fast Scaling: Instead of sprinkling resources across everything, run controlled pilots. Scale quickly if they work, shut them down if they don’t.
- Clear Prioritization: Choose a few initiatives that matter most and resource them properly. Signal to the organization that these are non-negotiable priorities.
- Dynamic Resource Reallocation: Create processes that allow budgets and people to shift quickly as information changes, rather than trying to predict everything upfront.
- Green-Team/Red-Team Reviews: Appoint a group to argue not only against reckless optimism, but also against overcautiousness. They should ask: what are we losing by playing it too safe?
- Tight Feedback Loops: Monitor forecasts against reality frequently. Don’t build in safety buffers months in advance—adjust them continuously as conditions evolve.
- Culture of Ownership: Assign clear accountability for each priority initiative so responsibility isn’t diluted across too many hands.
- Reward Smart Risks: Recognize teams not only for wins but for disciplined, thoughtful risks—even when they don’t pan out. This keeps the culture from calcifying.
The Paradox of The Peanut Butter Principle
The paradox of overcautiousness is that it produces the opposite of what it promises. Scattered strategies foster mediocrity. And because our strategy decisions shape how sales teams set goals, how marketing teams tell stories, and how R&D decides which bets are worth taking, cultures built on overcautiousness become timid and slow. Ultimately, what looks safe in the moment turns out to be dangerous in the long run.
Real safety comes from disciplined boldness—acknowledging uncertainty, preparing for it, but still committing to clear bets and standing behind them. That’s what builds resilience.
We will never be free of risk. As leaders, our job is to see further, choose wisely, and give our teams the confidence to act with conviction. If the last few years have taught us anything, it’s that clinging to safety can leave us more exposed than we realize. Courage—it turns out—is the safer choice.