The Sharpness Theorem

Most students of strategy and strategic thinking will find their way to the work of Henry Mintzberg. From him, we gain an elegant statement that serves to powerfully focus our study of strategic thinking. He writes, “The real challenge in crafting strategy lies in detecting the subtle discontinuities that may undermine a business in the future. And for that,” he continues, “there is no technique, no program, just a sharp mind in touch with the situation.”[i] I have taken to calling the Mintzberg quote as the “sharpness theorem” and it is an effective introduction to strategic thinking.[1] It yields at least three notable principles:

A strategic thinker is “a sharp mind in touch with the situation.” Mental keenness is an essential characteristic of strategic thinking. The emphasis is on alertness for patterns and anomalies in the specific situation and not on universal methodology.

The ability to detect nuance is essential.

Detecting subtle discontinuities” is the “real challenge” of strategy. A discontinuity is a break in a trend. A discontinuity should cause your confidence in a prediction to significantly decline. In strategy work, a discontinuity is a difference in the environment that expresses itself over time. A common result is the disruption of the status quo.

A discontinuity transforms a linear phenomenon into non-linear. By contrast, linear thinking is a mindset that emphasizes understandability, predictability, and coherence. That becomes the criteria for whether something makes sense or not.

An ongoing task for the strategic thinker is noticing discontinuities and then proactively addressing emerging threats and the opportunities.

Good strategy is “crafted.” The word craft should suggest to you a design-oriented sensibility. It is a reasoning approach that emphasizes finding and capturing proprietary knowledge that is useful for creating strategy. Importantly, word craft connotes action.

Conventional thinkers tend to tell you that strategy is planned. The basis for any planning (and it is the limitation as well) is that the future can be predicted. The subtle mistake is that people confuse goals (what is wished for) for situational analysis (what is really happening).

Do you agree?

[1] This definition of theorem applies: an intelligible product of contemplation and something that can be proved.

[i] Henry Mintzberg, Crafting Strategy, Harvard Business Review, July 1987

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Why strategic thinkers embrace subjectivity (and are skeptical of objectivity)

Patterns & Strategic ThinkingStrategic advantage comes from possessing a proprietary insight; it means that you know something valuable that others do not appreciate. These insights are “facts” that belongs to you and not to others. That proprietary insight gives you an advantage over your rivals.

Now, if you don’t feel comfortable that an insight is a fact, consider that it is a hypothesis that you want to prove and enhance.  One good example is Starbuck’s growth from a stand-up only coffee bar to a social lounge. By the time that rivals figured out that Starbucks was doing something different, it was already established.

Reality is socially constructed

Imagine one person saying this to another, “I’ll telephone you tomorrow at six o’clock.”  Does that mean 6AM or 6PM? What if the person is in a different time zone? You can’t understand the “truth” of the fact of six o’clock without considering the context of social/cultural conventions like time zones or AM-PM.

Thus, time is subjective.

The overvaluing of objective truths

You’ve probably heard the story about black swans. As Nassim Nickolas Taleb writes,

“before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seems completely confirmed by empirical evidence. The sighting of the first black swan…. illustrates a severe limitation to our learning from observation or experience and the fragility of our knowledge”

Whenever we hear about objective truths, we’re likely in the realm of conventional knowledge. There is no opportunity for gaining advantage in that space. Facts are not as clear cut as we tend to assume. When we are in a hurry, or not considering the context and the culture, it is easy for our minds to overlook things that will turn out to be important.

Instead, the strategic thinker looks for interesting and small signals: the discontinuities that can be exploited by a good strategy.

The microskill of contextualization

Contextualization is the act of understanding the themes and patterns of the particular situation. A competent strategic thinker notes the particular policies, institutions, worldviews, and circumstances that shape a given moment in time. In other words, the “truths” that are useful to a strategic thinker are those that are shaped by context. To say that competitive advantage is important means entirely different things to a philanthropy, military unit, entrepreneur, or mayor of a small city.

Subjectivity is good. Do you agree?

Five Tips for Recognizing and Avoiding Incompetence

Over the years, I’ve encountered hundreds of executives and managers who were absolutely sure that they had a strategy, and similarly were confident that that they were good strategic thinkers. Their actual performance shows that their confidence is unjustified.

The Dunning-Kruger effect is the phenomenon of incompetent people who act and believe as if they were competent. Let’s take a moment to see some evidence of the Dunning-Kruger effect in the real world. This video is hilarious. It is from the TV program Jimmy Kimmel Live and involves an interviewer asking people at the South-by-Southwest festival their opinions on some non-existent bands. Notice how confidently they provide their opinions!

Writes David Dunning, in an article titled, “We Are All Confident Idiots,”

Incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.

This is because our minds develop by accumulating and associating random bits of knowledge. People are not ignorant, they are misinformed:

An ignorant mind is precisely not a spotless, empty vessel, but one that’s filled with the clutter of irrelevant or misleading life experiences, theories, facts, intuitions, strategies, algorithms, heuristics, metaphors, and hunches that regrettably have the look and feel of useful and accurate knowledge. This clutter is an unfortunate by-product of one of our greatest strengths as a species. We are unbridled pattern recognizers and profligate theorizers. Often, our theories are good enough to get us through the day, or at least to an age when we can procreate. But our genius for creative storytelling, combined with our inability to detect our own ignorance, can sometimes lead to situations that are embarrassing, unfortunate, or downright dangerous.

The Jimmy Kimmel Live video seems like harmless fun. But it shows up in business and government. To see another scary-but-funny example of the Dunning-Krueger effect, watch this analysis of Donald Trump’s answer in a December 2015 debate for the Republican nomination for the US presidency.

The Dunning-Kruger effect is a paradox. Dunning writes,

The trouble with ignorance is that it feels so much like expertise.

Strategic Thinking Tips

A competent strategic thinker will recognize that the Dunning-Kruger effect exists in all areas of life, including strategy making.

Tip 1 – Watch for overconfidence in others.

Tip 2 – Don’t be afraid to say, “I don’t know.”

Tip 3 – Find a colleague to be your strategic thinking partner. Each of you have a responsibility to be a devil’s advocate to the other. This article gives you some develops the idea that strategy making is similar to jury duty.

Tip 4 –  Use the prospective hindsight technique. It involves imagining a future outcome (disaster or delight), and then asks the question “What happened to cause that outcome?”  More can be found in this article.

Tip 5 – Don’t assume that a person’s training or education has been remembered or practiced. I know a senior executive who gets upset when people don’t manage projects well.  “They’ve been trained,” he says, as if it is a definitive declaration. The fact is that they attended a 2-day awareness session and got no follow up support from their organization.

What other examples do you have to share?  

Expectations Casting


Fly CastingForecasting and backcasting are common techniques for understanding the future. They have specific meanings. Forecasting is an extrapolation of current data into the future. When I identify a trend, I can choose to forecast that trend to continue. Back casting is the selection of a future  scenario and then identifying the variables that would be needed to bring about that future scenario. An example: I wonder if  a presently-strong company will fail in the future; I identify the premises and arguments that explain what would cause that failure.

Neither of those two concepts quite captured what I wanted to explain about strategic thinking, so I made up a new phrase, Expectations Casting. I’ll use the analogy of casting a fly fishing line to introduce it. In fly fishing, it is the weight of the line that provides the momentum that allows the fisherman to get his fly to the a target. A single cast is not feasible if the target is far off. The fisherman begins by feeding out a little line, and then swishes his rod slightly forward and then back, releasing a little bit of line to extend the distance of each cast. Eventually, the fly fisherman allows the line to fully extend and settle on the target.  It may take several iterations of backward and forward to reach the desired target.

Like a fly fisherman casting his line back and forth, expectations casting is an iterative cycling of looking retrospectively into the past, and then prospectively into the future. The back casts are reviews of your knowledge and memory, typically tied to a short passage of time. The forward casts involve the use of your imagination.

Like casting fly line, you start with a short manageable line, and feed it forward in a controlled way.

Suggestions for the practice of expectations casting

  • Start by making a short retrospective cast of 3 months into the past. Ask yourself, “What in the last 3 months has been interesting, exciting and significant?” Here is a variant that turned out to be very fruitful for me, What’s the most interesting idea I’ve found by participating in social media?” (The answer was finding data on showing that personnel recruiters regarded strategic thinking as a very difficult-to-find skill.)
  • I find it helpful to review the “lab book” that I keep for ideas. I make it a practice to write down interesting things and patterns.
  • I put them into categories. Here are some: career/business, family, personal finances, personal health, community, society.
  • Identify and ask powerful questions (the purpose is to stimulate insights). An example is, “What might happen in next three months?”
  • Which of your observations might qualify as a pocket of the future (POTF)? A POTF is a thing that is presently low in prevalence, but have the potential to increase in prevalence and the potential to be seen by our future selves as significant. We are especially concerned with those trends that would change in a non-linear fashion.
  • Record them in a lab book, and allow room for capturing strategic thinking reflections.
  • It is generally better to pick just one expectation. Relax and take a walk to mull over your speculations. What is the nature of a future opportunity with a given person, client, technology? Record your thoughts, especially if an insight occurs.
  • Repeat, with a longer iteration. Look back 6 months, and look forward 6 months. Then 9 months, then a year. Etc.

The purpose of the expectations casting is to generate a portfolio of educated guesses about the future. Part of the value is in the number of guesses, and part of the value is in the mental process of retrospection and prospection. As with most strategic thinking practices, it is essential to search for powerful questions and to budget time to record and reflect.

I find that I slip into a trap when making educated guesses. I’m basically an optimist, so I am biased to believe that markets will keep going up and that people will love my ideas. I have to put a little extra mental effort into making sure I’ve considered the non-optimistic scenario. Too, I find it’s easier to declare my wishes than my expectations. I need to discipline myself to say, “Here’s what I expect to happen, and here’s my probability estimate.”

Do you think that expectations casting can help you become a better strategic thinker?

Orient Your Strategic-Thinking Map

strategic thikning beaconAll students of strategic thinking occasionally feel just a little lost and frustrated. I imagine the topic of strategic thinking as a map – albeit a fuzzy and dynamic map – with salient landmarks that help you navigate through the subject. Even with the best of maps, you can find yourself wandering about when you’re in the field for the first time. Fortunately, with experience, the landmarks seem familiar and expected. The exploration seems more natural.

This article describes one “beacon” and two “cues” that will help you develop and improve your conceptual map of strategic thinking. By way of introduction, consider these three questions that apply to any orientation:

  • Where am I now?
  • Where should I be headed?
  • What other landmarks are relevant?

Where am I now? (Find Orientation Cues)

An orientation cue helps you locate your position on a larger field of concepts.

Too often, people look for “best practices” on the basis that the external environment is predictable and obvious (which it is not). Instead, a strategic thinker will be sensitive to nuance and relationships. I like Dave Snowden’s Cynefin framework. It takes as a starting point the idea of disorder and diagnosing whether you are in a simple system (causes and effects are obvious and linear), a complicated system (an expert is needed to analyze and design a solution), or a complex situation (the ultimate solution will emerge and each experts brings a distinctive view of the problem).

Pay attention to the current discourse; the conversations you are having with your colleagues as well as with your internal thought process. If the conversations are about productivity, quality, and efficiency, then you likely to be practicing operational (rather than strategic) thinking.

Where should I be headed? (Find Navigational Beacons)

A navigational beacon gives you a point to navigate towards. When you lose sight of a navigational beacon, you practice a kind of “dead reckoning” towards the beacon, making course corrections when you sight the beacon.

The two most useful beacons of strategic thinking are the future and success. By definition, strategic thinking is concerned with “success in the future.” Does your organization have a diagnosis of its strategic situation and policies for addressing that situation (these are essential elements of good strategy)? What threats and opportunities are present? How far into the future are you looking? What metrics are you using beyond basic financial measures?

What other landmarks are relevant? (Find Associative Cues)

An associative cue is an object or concept that contains useful navigational information. It helps you know what to do and what to think about next. In the past, I’ve written that insights are the secret sauce of strategy, so they are an example of an associative cue; when you have an insight, you should consider their use in the design of strategy.

Another tip for associative cues in the strategic thinking map is to stay attuned to the emotional tenor of the discussions: Are people feeling frustrated? Tired? These would be cues to approach the strategic situation with a fresh perspective.

Finally, the search for associative cues gives us a way to build the reflective competence essential for developing competence in strategic thinking. What patterns have you observed? Notice the number and nature of the questions that have been posed. If you are reflecting on the specifics of your situation, you’re not thinking strategically.

What other examples of beacons and cues might be found in a strategic thinking map?

Enhancing (and Correcting) Your Understanding of Strategic Thinking

Strategic thinking before & afterThe nearby graphic is a “before and after,” prepared by workgroup from my How to Think Strategically Workshop in offered a few months ago in St. Paul. (The before is on the left and the after is on the right.) Both of them were developed in response to this question, What is strategic thinking about? In developing the graphics, the groups were given time to brainstorm and asked to narrow them to the top answers.

As you can see in the left side “before,” the group answered the question of What is strategic thinking about? with outcomes, transformation, focus, collaboration, planning, vision, and risk. This is a very respectable set of answers, but it could easily have been the answer for the question, What is project planning about? This is typical of many people’s understanding of strategy: it’s mentally categorized alongside the word plan. The word plan connotes the ideas of structure, alignment, prediction, and goals, which distract from an accurate understanding of strategic thinking.

The right-hand drawing was after a morning of seminar discussions and presentation. The same team relooked the question of what is strategy about, and came up with a much better set of criteria: Alert for opportunities, know [your] competitors, evaluate options, problem solving, re-framing, and insights. This “after” diagram clearly shows their understanding had become more accurate.

I particularly liked how labeled the graphic, “Making sense of the world around you.” That sense-making activity ties closely to the ideas of reframing and insight that are noted on the graphic. A strategic thinker looks at a situation with the intent to clearly and accurately perceive the situation. What is happening? is an important question. Supplementing that situational analysis is a recognition that there are always competitors (or substitutes); strategy is more than a set of aspirations.

As the strategic thinker gets a feel for the current situation, there are a two more questions that can energize their minds: What might happen? And What can we do about it?

Do you agree?

Strategy is Not One Right Answer

In a recent HBR blog post, Roger Martin poses and answers a question: Why Do Smart People Struggle With Strategy? The answer he gives is this: because there is no right answer.

While I agree with Martin that GOOD strategy probably does not have one right answer, I think he missed some important points.

Smart People can be Good Operations Thinkers, but Can’t Think Strategically

I think the reason for the struggle is that many smart people in organizations quickly become accomplished managers and executives. They run operations, find right answers, and get results.

I call these smart people operational thinkers. It’s mostly a learned skill, but there are some personalities that lend themselves to that domain. Operational thinkers, as a general rule, value productivity and prefer those tools and models that enhance productivity.  As a result (and over time), they learn a set of workplace skills that take them far in their careers: a value on planning, a keen sense of responsibility for production, the ability to get along with their peers (not hurt their feelings unless absolutely necessary), a desire for orderliness, the value of experience in a given domain (and the intuition that comes with the recognizing the patterns of that domain), a liking of process and a dislike of ambiguity, and a preference for use of deduction in a problem solving.

As a consequence of their accrued organizational power, operational thinkers are privileged to participate in discussions about long-term plans and budgets. As they do this work, they conflate the word strategy with strategic (as in strategic decision) and with the word plan. Long-term plans and budgets, while necessary for coordination of activities, are often confused for strategy, which is a kind of problem solving involving the interests of the organization in the face of dynamic and potentially disruptive change.

Strategy involves Inverse Problems, not Direct Problems

Direct problems as typical of operations work and inverse problems are typical of strategy work. Direct problems are well defined and inverse problems are ill defined.

Here is an example of a direct problem that a client company regularly faced: It would pay premium pricing to air-freight relatively inexpensive parts from China. The reason this problem was that product designers did not identify long-lead time items and communicate their needs to the procurement team. The solution was training and incentives to create new behaviors. Here we see effect (expense of air freighting parts) and we can easily find the cause (lack of knowledge, skill, and incentive). Well-defined and direct problems have a clear path to a solution.

Goal setting is an example of a direct problem.

Strategy are inverse problems, such as “what markets do we want to be in, and how might we prevail?” Inverse problems are ill-defined problems in the sense that there are numerous possible causes, possibly more than solution, and the ultimate goal may change as circumstances change.Simple solution are not likely to exist.

Instead, inverse problems require holding a lot of information in mind, tolerating ambiguity, and searching for insights. This is a doubly-difficult job because of organizational politics and culture.

Do you agree?

Strategic Thinking Contrasted with Operational Thinking

Strategic Operational Thinking largeStrategic thinking describes the individual’s capacity for – and practice of – using their mind to identify and apply factors that will result in success in the future. I’ve always felt that finding an opposing concept to contrast with strategic thinking would help my readers to develop an understanding.

Operational thinking is that concept. I imagine an operational thinker (OT) with this analogy:

He or she manages a factory that is focused on production of a widgets. Everyday raw materials come in, and widgets go out. Although there can be considerable variation in the quality of the inputs, quality of the means of production, and demand, the system is more-or-less predictable. The operational thinker values predictability and stability. Even though the production system might be complex, a disciplined systems thinking approach can reveal the main drivers of performance; thus, it a linear and quantitative thinking approach is useful.

Again using the factory analogy, the OT prefers concrete problems and measures performance with efficiency metrics. The OT’s solution to almost any problem is creating, enhancing, or streamlining a process. Ideally, with excellence in process, the OT can secure the ultimate prize of “ordered perfection.”

I’ve met many people like this, and you probably have too. Although many begin their careers with a capacity for strategic thinking, after a while they lean so heavily on operational thinking that it becomes their dominant thinking habit. One key element is associated with the processes and systems that surround them; processes eliminate ambiguity but strategy is inherently ambiguous.

Most everyone dislikes ambiguity, but can tolerate it to some extent. I think that most operational thinkers find ambiguity to promote a lot of anxiety. Consequently, they find ways to simply avoid it. This denial explains why externally imposed change is so disruptive to organizations.

Operational thinking, like strategic thinking is purposeful. The distinction is OT’s focus is on success in the present. The operational thinker has a strong production orientation and the importance of the production orientation comes to dominate their thinking.

Is there a way to measure or contrast operational versus strategic thinking? I think there is, and it is based on the work of Anthony Gregorc, who has attempted to measure four learning styles that he terms concrete sequential, concrete random, abstract sequential, and abstract random.

Operational thinkers are strong on dimension of concrete sequential work. They are organized and like to get to the point. They value predictability. Operational thinkers are also good with analysis and structured methodology, which is in Gregorc’s abstract sequential domain.

Strategic thinkers, by contrast, are open to experimentation and new viewpoints; these are qualities of Gregorc’s concrete random domain. Strategic thinkers are also imaginative, like the big picture, and flexible, which are in Gregorc’s abstract random domain.Strategic Operational Thinking small

Take a look at the two nearby graphics. Operational thinking is more characteristic of the bottom half and strategic thinking is on the upper half. I have discovered several patterns from the results of people who take the test. The box pattern suggests that the person is equally comfortable with operational and strategic thinking. The kite pattern is similar to the box, but the person has a stronger preference for one of the four axes; a tail toward abstract random would probably indicate a strong strategic thinker and a tail oriented towards concrete sequential would indicate a strong operational thinker. Arrowheads have weak orientation on one axis. Spears are long and skinny patterns.

Do you agree with my characterization of operational thinking? Do you agree that it is the “opposite” of strategic thinking?

You can learn more about Gregorc’s model here:

Gregs new book available now

Time: A Resource to Manage or A Source of Opportunity?

Most of the people who attend my seminars are project and program managers. Their work (and probably their personal life too) is oriented by the urgency of due dates. For them, time is a resource, a precious and scarce resource.  Due dates create a useful urgency, but also create stress.  The result is the frequent complaint of being “lost in the weeds,” a topic that I addressed in this article.

We expect strategic thinkers to be future oriented and have a broader “big picture” view of their organization and its environment.  That’s good in theory, but difficult in practice.  I’d like to suggest that part of the solution is to create different thinking habits about time. More specifically,

We need to create some mindspace for the idea that time is a source of opportunity. We have to create a balance between the managerial mindset of time is a resource and the entrepreneurial mindset of time is an opportunity.

Here are a few tips:

  • If you are concerned about due dates for your project, ask about time in a more subtle way. Examples: “What’s your sense of urgency?” or “Tell me about your timing preferences for delivery.”
  • Use the mAPPpeS model described in this article. The acronym stands for mentality of abundance, plausibility not perfection, and expect to be surprised.
  • Spend some time thinking about the famous William Gibson quote, “The future is already here, it’s just distributed unevenly.” That means that there are – in the present movement – small indicators of what the future holds. Some examples are wearable technology, increased prevalence of non-English texts in USA classrooms, changing weather patterns, etc. Things that are rare or less common now with be much more common in the future.
  • Mentally practice (imagine) the four responses to opportunities: sharing, enhancing, exploiting, and accept. Here is a way: imagine you have won a large cash lottery. What would you do with that money: keep and squander it, invest it, donate it, bequeath it?
  • For those involved in product development, what is the balance in investment in incremental innovation versus more disruptive innovation? The too-common model is that firms under-invest in those products that change the basis of competition, and established firms end up getting disrupted by entrepreneurial upstarts.

Scaling Up to Enterprise Strategy Making

As I’ve shared in earlier articles, it makes sense to develop individual strategic thinking competency, then blend that competency into strategy making.  Too often, executives are unpreparedly thrown into strategic planning sessions where they are expected to talk about trends and disruption.  Their minds have not been prepared to think about time as a source of opportunity.

Scenario TemplateExperience shows that this practice of looking for smaller changes is helpful when using more sophisticated futures techniques like scenario development. If you are not familiar with scenarios, it involves first identifying the top two uncertainties that would be causes of future turbulence. Those two uncertainties become the X and Y axis of a 2×2 grid, as shown in the nearby graphic.  The four resulting scenarios become a topic for further study and response of contingencies.

Another use is with responding to the question, What is our core challenge as an organization? Keeping in mind that the future is a source of opportunity, we let our imagination explore possible futures rather than getting mired in today’s operational issues.

Acknowledgement: this article is influenced by the thinking of Bill Sharpe and his book, Three Horizons: The Patterning of Hope. The 1-hour webinar (you can find it on YouTube) is an excellent introduction.

Today’s decisions affect our success in the future. Do you agree?