Tip: Strategic Thinkers Look for “What’s Interesting”

I realized (while writing the prior article, Could Strategy Be as Simple as This?) that the factor of “advantage” was the most interesting of the three strategy components (objective and scope being the other two). Advantage refers to position or potential versus another.

What makes advantage interesting as a factor of strategy? First, my experience is that many strategists seldom think about advantage. Too often, strategists assume that their job is done when they establish goals and objectives. However, a competitive reaction will always occur. Second, the idea of competitive rivalry creates the tension that makes for a good story; and stories are enormously powerful leadership tools. Third, creative and innovative ideas gain much of their power and impact simply because they address unrecognized issues. They are pleasant surprises.

This leads to a powerful question that provokes strategic thinking: Who do you want as a future competitorAs you answer the question, you imagine the evolution of your strengths and weaknesses versus a new set of competitors.

As an example of thinking about future competitors, I was part of a business development team that was leading our venture into an entirely new market, where we would no longer be competing against “mom and pop” enterprises, but would be facing well-funded and professionally-managed corporations. We constantly reminded ourselves that we would need processes and intellectual assets to be able to prevail against them – even though the competitive face-off was at least a year away.

An Aside: Why is being interesting so interesting?

The key word in this stream of thought is interesting. Strategic thinkers know that people will want to engage with someone whose ideas are eye-opening in some way. The further exploration of those ideas provides camaraderie, mental stimulation, and open up the opportunity for economic benefit.

Here is an interesting point that I learned from the management guru, Tom Peters: If you want to innovate, look to your most interesting customers. Interesting customers are typically NOT your biggest customers. Your interesting customers are trying to solve novel problems. As Eric Von Hipple – the guru of lead user research – suggests, develop and provide tool kits and search out those users who invent solutions to problems.

How to make scope interesting

The scope of strategy to determine what is “in” and “out” of consideration. I think the interesting question is where the organization chooses not to venture. Note what Chris Peters of Microsoft (Microsoft Secrets, Page 210) has to say about excluding items from the scope:

“There can be good and bad vision statements. A good statement tells you what’s not in the product; a bad vision statement implies everything is in the product. In order to give you guidance on what’s in and out, you have to kind of explain what the thing isn’t. And too often marketing will decide that it’s best if everything’s in… The hard part is figuring out what not to do. We cut two-thirds of the features we want to do in every release off the list. If we could actually write down everything we wanted to do, it would be a fifteen-hundred-page document. So the vision statement helps you in the chopping mechanism, not in the creation mechanism.”

How to create an interesting objective

An interesting objective is one that is counterintuitive.  It might possibly be of the type where one “loses the battle in order to win the war.”

Here is an example of a counterintuitive action.  In the 1940s, a group of 17 forest fire fighters were dropped into Mann Gulch in Idaho to battle a blaze. The blaze unexpectedly reversed course on the group and started running up the mountain towards them.  The leader of the group -Wagner Dodge – recognized that they could not outrun the blaze, so he built a small escape fire  to consume nearby fuel (fuel, heat, and oxygen being three necessary ingredients in fire), resulting in a protective zone.  This objective was not standard fire-fighting procedure. He survived, but those who tried to outrun the fire perished. (Gary Klien covers this incident in his book Seeing What Others Don’t. He calls this process of insight development creative desperation.)

Strategic Thinkers are Curious

The question about “interestingness” is one that a curious person would ask. Because they are curious, strategic thinkers add value to the strategic planning process. Instead of approaching strategy with a checklist mentality of completing each prescribed step and moving on to the next one, they stay alert for opportunities.

Do you agree that curiosity is an important characteristic of the strategic thinker?

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Could Strategy Be As Simple As This?

Strategic thinking is purposeful, and one purpose is to spark strategic insights. These insights make it easier to make decisions.

This article’s proposition is that strategy involves three choices by the strategist: choice of scope, choice of objective,  and choice of advantage. These choices do not constitute strategy, but answering them puts you on the course to actually having a strategy and not just a list of goals and initiatives.

What is the scope of our venture?

Scope is a term used to mean what is “in” and “out” of consideration. In other words, what is the definition of the venture? It could refer to the firm, the program, the team, or the individual.

The following sub-questions can help the strategist in partitioning and defining the scope of strategy:

  • Are we thinking big, or small?
  • Where is our geographic domain? Local, regional, expatriate, or global?
  • When we think about the venture as a “solution provider,” to what extent do we want to produce the solution, sell the solution, and service the solution? Stated differently, what part of the value chain do we want to operate in? Are there unexploited or under-exploited opportunities to capture value?
  • Is there anything that the venture explicitly won’t do?

What objective(s) do we choose to pursue?

The strategist first considers the circumstances – diagnosis – and selects an objective that best fits her diagnosis of the situation. Next, they choose an objective that is most sensible for the stakeholders.

The following sub-questions can help the strategist in identifying strategic objectives:

  • How do we think about success?
  • If we commit to a stretch goal, can we acquire the resources that will get us to the goal?

Critical thinking is a component of strategic thinking. Activate the logic to see if the objective is sensible.

For example, I once worked for a CEO said, “We grew revenues 35% last year, so our goal for next year is 35%.” That probably qualifies as a BHAG: a Big Hairy Audacious Goal.  BHAGs can be be useful if they are based on a logic and commitment to apply resources. They can be discouraging if there is no underlying design.

Who or what are we trying to gain advantage over?

Most people have heard this joke.

Strategic thinkers outrun the bearTwo campers come upon an angry bear. The first says, “I’m glad I wore my running shoes.” The second says, “you can’t outrun the bear.” The first says, “I don’t have to outrun the bear, I just have to outrun you.”

Sometimes it is only a small advantage that allows our success. But nevertheless, it is an advantage. Strategy is about leveraging a small advantage – and combining it with other advantages – so as to gain a more significant advantage.

Here are three sub-questions that help to identify the areas where the strategist can find advantage:

  • Who are the competitors and where is their focus and power?
  • What alternatives are available (including the “do nothing” alternative)?
  • Is the identified advantage actually important to the customer (or other important stakeholders)?

As it pursues its objectives, the venture needs to provide something of value to its stakeholders. There are always competitive alternatives and substitutes available to these stakeholders; for customers, its other product/service offerings; for                            not-for-profits, it is a competition for attention for funding or policy.

Conclusion

These three decisions do not comprise a complete definition of strategy, but they do provide a useful framing perspective. Insights are often simple ideas that tell us about the essence of something.

As you consider your answers, consider how you would blend them together into a problem-solving or opportunity-capturing design.

Do you agree that this is a simple way to think about strategy? How can a strategist apply the questions?

How to Improve Strategic Planning with Strategic Thinking (and vice versa)

Strategic thinking v planningStrategic thinking is an individual activity that is a style of thinking. It is not an organizational process or activity for the basic reason that people do not share the same brain.

Many writers use the phrase strategic planning to describe the organizational process of setting strategy. One style of strategic planning is adaptive, starting with scanning the external environment. For example, a firm may notice a trend in its customers or in government policy that opens new market opportunities.  The strategic planning process then moves into developing responses, and those responses often constitute the “strategy.”

Another style of strategic planning is a straight-forward planning exercise to achieve a pre-determined goal. Here the emphasis is more on the word plan, with the adjective “strategic” suggesting that it is an “important plan.”

Strategic thinking and strategic planning are similar in that:

  • Both deal with strategic intent and strategy
  • Both involve collecting and logically-processing information

Strategic planning receives much criticism. In many organizations, strategic planning has become highly structured; a groan-inducing set of templates that yield an artifact called the “strategic plan.” Often the reason for that is that strategy becomes tied to budgeting, and the words that comprise the “strategy”  becomes the documented rationale for the proposed budget. In too many organizations, strategic planning exists solely as an annually-repeating bureaucratic process of creating artifacts, discussing them, and filing things away.

This bureaucratic approach is further magnified by use of pre-structured templates. A common response to the templates is that practitioners skip the analysis by writing down the first thing that comes to their mind. Analysis is mentally exhausting and they are busy, and no one really notices what they write.

Yet, strategic planning is also supported and lauded. It certainly receives important resources.

Strategic planning can be done well or it can be done poorly.  Strategic thinking can be done well or it can be done poorly.  We don’t need to replace strategic planning with strategic thinking, we need to focus on the unique value adds of each.

I have a modest proposal: mix the advantages of strategic thinking
with the advantages of strategic planning to maximize the contributions of both.

~~~

How Strategic Thinking Improves Strategic Planning

Strategic thinking is the source of insights.  Insights are important design elements in strategy formulation. Consider how these insights are generated and applied:

  • Strategic thinkers imagine the “what ifs” and the future state. They contrast  the desired future with the current state. This information can is often captured (recorded) in strategic artifacts as situational analysis and vision statements.
  • Strategic thinkers often generate imaginative and creative problem solutions. The solutions would probably be recorded in the documents as strategies, or guiding policies.
  • Strategic thinking is opportunistic, and SWOT-type analysis includes capturing and recording opportunities.

How Strategic Planning Improves Strategic Thinking

Experience with strategic planning can foster an individual’s competence in strategic thinking. Participation in the process of strategic planning processes forces individuals out of their comfort zone into their learning zone. Here are a few of the benefits:

  • They learn to recognize and tolerate ambiguity and abstraction
  • They learn that while processes reduce ambiguity, processes the status quo; this anchoring on the status quo can cause the organization to be slow to respond to threats or opportunities
  • They learn that there is seldom one right practice or vision
  • The learn to ask better questions
  • They learn some of the specialized jargon, and can better communicate with others about concepts associated with strategy

I saw the value when I worked with volunteer leaders of a Project Management Institute (PMI) component group. PMI Headquarters required strategic plans and measures. These volunteer leaders were primarily trained in science or engineering and were accustomed to being provided a “scope” to which the would develop execution plans. They thought of planning as an exercise create documents that answered explicit questions.

Strategy is ambiguous and working with ambiguity put the people out of their comfort zone. They struggled (and complained) but they learned.

In the post-activity lessons learned, the participants felt that they had matured some as strategic thinkers. Here are a few representative comments:

  • “I learned to look for data, and not make assumptions when I had little data to support my hunch”
  • “I started to ask some of the same questions about my own organization’s strategic position”
  • “I became much more focused on our customers, and how we create value for them; If we can’t develop a good value proposition, we won’t succeed”
  • “I feel much more comfortable with the ambiguity that characterizes strategic situations”

Manage the Interface Between Strategic Thinking and Strategic Planning

Because organizations are social entities that must act collectively, individuals often (and should) share their information and insights with others. Here are some suggestions:

  • Encourage individuals to reflect and think strategically, with the purpose of developing relevant and meaningful insights.  Allocate time and encourage people to work individually, at least for a while. Strategic thinking is a somewhat solitary and reflective activity.
  • Discourage the sole reliance on formal written documents and templates.
  • Encourage people to have conversations where they share insights with each other.
  • Encourage people at all levels of the organization to participate in contributing to strategy.

Do you agree that strategic thinking and strategic planning are complementary?