A Manifesto for Excellence in Strategic Thinking

Strategic Thinking Manifesto BadgeThere are two good reasons for you to read this article. First, a manifesto can help make strategic thinking more prevalent in your culture. Given the confusion in the field of strategic thinking, a manifesto is in order. Second, the practice of writing one will sharpen your own capabilities to communicate clearly to integrate divergent viewpoints.

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Manifestos are a literary genre. Generically, they are a tool for making public a set of ideas and advocate for those ideas. Some manifestos are radical in nature, and call for the overthrow of the status quo.  Since strategic thinking needs to be better socialized in organizations, and since the status quo leads to stagnation, the manifesto can be powerful. A manifesto is a call to action; a rejection of conventional ways of doing things.

A Simple Formula for a Manifesto

According to Tristan Tzara, “To launch a manifesto, you have to want A, B, & C and fulminate against 1, 2, & 3.”  It’s a nice straightforward template.  We first identify the kinds of things we want (Tzara’s ABC) and then register our complaints about the current state (Tzara’s 123). The final step is combining the 123s with the ABCs.

A Short List of Desirable Things (Tzara’s ABCs)

By definition, strategic thinking has an orientation towards “success in the future” (see the first article in this blog for the definition of strategic thinking). The word success is multidimensional in meaning. Here is a short listing of desirable things that people would want for the future of their organizations:

Survive and thrive. To win the game. Create wealth for shareholders. Avoid disruption. Be creative: express self and solve problems. Collaborate. Get things done in the here and now. Principles. Leave a better world for our descendants. Hope. Prestige. Coherence. Fairness. Social responsibility. Quality. Enlightenment. Transparency. Accountability.

A comment:  Strategy involves advancing the organization’s interests. All of the above are generically in the interests of most organizations, most of the time.  Because strategy is a kind of specialized problem solving, strategies must establish the relative prioritization of those interests given its current reality.

Social Responsibility is One of Several Interests

Notice many of the items in the above list, for business organizations, fall into the category of social responsibility. This is good news for strategic thinking, because current trends to expand the scope of organizational interests beyond financial metrics means that people are going to be more open minded and flexible in their values.

A Not-So-Short List of Things to Complain About (Tzara’s 123s)

Back to Tzara’s formula for a manifesto. He says a manifesto describes the things – a litany if you will – that we fulminate against. Consider these facets of the current condition:

Failed states and institutions. Short term, selfish behavior. Lack of integrity. Bureaucracy. Sloppy language and terms drained of meaning. Mediocrity. Existing power structures preserve the status quo. Desire for predictability. Excesses of functionalism and synoptic planning. Dogma. Disruption. Polarization in organizations and in society. Narrow, silos focused on strategically-irrelevant activities. Reasoning backward. Nepotism. Multitasking. Isolation and self-doubt. Firefighting and crisis management. Waste, sloth, and inefficiency. Distractions.

They are the current state.  Let’s quickly review current practices about strategic thinking. For most individuals and organizations, there is mediocrity and dysfunction. Most of them have to do with sloppy language. Consider:

  • Some people (erroneously) declare strategic thinking as the front end of the strategy process. First you think about things, and then make plans.
  • Some people (erroneously) use it as a label for their plea to “think about” strategy.
  • Some people (erroneously) use it as an excuse to introduce tools and frameworks of strategy analysis and strategy making.

Now, to top that off, the word “strategy” has been drained of meaning. For some, it is the goal or the vision. For some strategy is the steps to an objective. For some, it is an inspirational mission and vision.  Hence, the value of Richard Rumelt’s practice identifying good strategy so as to distinguish from bad strategy (bad strategy being the norm for most organizations).

I don’t know about you, but the current state of strategic thinking is populated by lazy people, cowards, charlatans, and the misinformed.  It makes me angry, and it believe that competency in strategic thinking and clarity of good strategy is a fight worth fighting!

Putting it All Together into A Manifesto

Following Tzara’s formula and the items listed above, we now have a template.  Here is what you write for the first part of the manifesto:

The current state of the world is ____ (select from your 1-2-3 list).  You continue with a statement that you find the current state unacceptable. If you want, reject it outright (the Latin roots of the word manifesto translate into “hostile hand”). This is unacceptable to us.

As you establish the current state is unacceptable, you move forward with a call to action. That is where the A-B-C list is helpful. You select from those “interests.” that are most basic, perhaps referring to them as original (first principles). In political discourse, you’ll find often reference to God in some (USA’s Declaration of Independence or Martin Luther King Jr’s Letter from a Birmingham Jail) or rationality (again, the Declaration of Independence and add to that Communist Manifesto). In artistic discourse, you’ll simply note that the prior state lacks truth or integrity.  In business, you’ll often find the reference point the founder’s values (care for the customer, frugality, excellence).

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Here my first cut at a manifesto:

A Manifesto for Strategic Thinking

Current practice in strategic thinking and strategy-making  is poor. Those leaders of organizations who hold misconceptions about strategy and strategic thinking are putting at risk the future of their organizations, and are not fulfilling their fiduciary obligations to shareholders and social responsibilities to stakeholders.

History shows our organizations and institutions are constantly under threat of disruption. If we are incumbents, we need to overcome the stubbornness of the status quo. If we can ethically gain advantage for ourselves by disrupting the status quo, we should take advantage of opportunities presented to us.

Board of Directors should replace leaders who can’t competently practice strategic thinking and can create good strategy. Corporate Governance should audit for good strategy and not just supporting verbiage for budgetary projections.

Leaders at all levels must invest in learning and practicing strategic thinking. People at all levels need to have a clear understanding of what good strategy is and is not. Further, they need to clearly understand what strategic thinking is and is not

With clear and reasonable understanding of the foundation concepts, any person can practice strategic thinking. In working with their organizations, they can develop and implement good strategy. It simply takes courage to identify and face up to challenges, the willingness to invest resources, and combine the resources with action.

Yanshevsky writes, “The author of a manifesto sees himself first and foremost as a researcher, an inventor, a discoverer.” Do you agree?  

How to Recognize Competence in Strategic Thinking

Strategic Thinking CompetenceAs a strategic thinking coach, I help people become more competent in the art of thinking strategically. Since strategic thinking, by definition, is concerned with success, I need to provide some sort of target for competency. That is the purpose of this article.

Why before What

Strategic thinking is hard work, and that is why it is uncommon. Let’s quickly affirm that you will experience benefits from investing effort into this discipline. It offers many benefits:

  • People get promoted because of their ability to think strategically. Strategic thinking is the #1 desired skill of the next generation of managers
  • Organizations with good strategy thrive; we are in an age of exploding complexity and this complexity creates threats and opportunities. The purpose of strategic thinking is to create good strategy; thus, organizational success is directly tied to success.
  • The world is full of opportunity for entrepreneurs who think strategically

An Individual Competency, Not an Organizational Process

I remind you that strategic thinking is a style of thinking, practiced by the individual. Strategic thinking is not a set of process or a part of a process (some people mistakenly confuse it for environmental scanning) or a tool (some people mistakenly confuse it for SWOT or scenarios); although those processes and tools can enhance the practice of thinking strategically.

Characteristics of a Good Strategic Thinker

Based on my experience, the competency goal is this:

A person is a competent strategic thinker when
they naturally and intuitively think strategically.

Here is what I would look for if I were evaluating a person as a competent strategic thinker:

  • The person is continually thinking about how he or she defines success.
  • As part of the definition of success, he or she recognizes that resources are limited and must be focused on those activities that increase the realization of success
  • The person recognizes ambiguity, and does not seek to eliminate the ambiguity until they feel they understand the situation
  • The person generally curious. As part of this curiosity, he or she is alert for patterns and see patterns and systems effects. He or she is alert for opportunities.
  • The person recognizes inertia; that is, the state of affairs when there is little change and other are habitually following the status quo.  In this case, the strategic thinker might encourage change (of a low-grade variety) simply to break the routine. I recently heard of a team of executives who decided to read magazines from outside their industry and field of expertise.
  • The person recognizes when compartmentalization of functions and specialties in an organization are causing too-narrow of a view of the organization.
  • The person is more aware of strategic resources in their possession.

What does the improvement pathway look like?

Two of the most important functions of a coach are to removing misconceptions and change inappropriate habits. These misconceptions and habits are different with each individual. Thus, in the diagnostic phase of coaching, we need to find out what the person knows that is true and what they know (and do) that is unhelpful.

People who are interested in strategic thinking always start with an existing base of knowledge about the field of strategy. They are not simply empty vessels to be filled with expertise. Some of their knowledge is valid, but some of their knowledge is invalid and the challenge reminds me of the quote by Will Rodgers,

It’s not what we don’t know that causes trouble. It’s what we know that ain’t so.

Probably the most significant misconception is that strategy is what is defined in a strategic plan, and is the mission, vision, and values of the organization. Strategy is a tailored response of resources and actions to meet a “core challenge.”

Thus, it’s better to tailor coaching to the existing knowledge of the learner.

All learners have strengths, and it is helpful to use them as foundation. For example, skill in risk analysis can be leveraged because risk analysis is a process of understanding cause and effect with the recognition that the effects appear in the future. A person who is competent at risk probably is comfortable with systems thinking and imaging the future, which are traits that are useful for strategic thinking.

Self Directed & Self-Paced Learning

Undoubtedly, individuals can pursue a self-directed course of study to improve their competency in strategic thinking.

I encourage all learners of strategic thinking to study examples.  Movies are a good choice that can be fun as well as instructive.  The movie that best portrays strategic thinking is Moneyball, but other good choices are 42, The Social Network, Dirty Rotten Scoundrels, and A Beautiful Mind.  You can find plenty of examples from historical and fictional characters, too.

Do you agree with these characteristics of competent strategic thinkers? What else should be added?

Strategic Thinking & The Game of Chess: Myth and Reality

This animated GIF was created on 29th July 200...

This animated GIF was created on 29th July 2007 by Sylvain Gadenne. In the context of the Budapest Gambit (an opening in the game of chess), it presents the strategy of pressure against the e3-pawn. It is intended to be used in the Wikipedia article about the Budapest Gambit. (Photo credit: Wikipedia)

“Make sure your resume says that you play chess. It shows you are a strategic thinker,” advised the older businessman to the young man networking into an industry trade group. The young man knew that his next job would largely define his career prospects, and he wanted to get into a position where he could provide impact.

For good reason, chess has become an iconic representation of strategy. Chess is a game that requires structured thinking and deliberation. However, chess is not a perfect analogy for organizational strategy.

The Myth: Chess Strategy is a Linear, Pre-Calculated Plan

A Vice President of OnStar, the General Motors subsidiary, was being interviewed in an article on the topic of innovation for a professional association magazine. Guided by the “overarching business strategy of creating great customer experiences,” he likened “his company’s innovation strategy to the way chess masters approach their game.” He said:

“They decide before they begin what their checkmate will be and work back from that point, unraveling all the moves necessary to get to that outcome. By beginning with a specific goal, they don’t get mired down in the myriad possibilities in front of them.”

Research shows that chess masters do not work with a goal and establish a linear (step-by-step) strategic plan.  Here is supporting research cited in the chess entry on Wikipedia:

In his doctoral thesis, Adrian de Groot showed that chess masters can rapidly perceive the key features of a position.  According to de Groot, this perception, made possible by years of practice and study, is more important than the sheer ability to anticipate moves. De Groot showed that chess masters can memorize positions shown for a few seconds almost perfectly. The ability to memorize does not alone account for chess-playing skill, since masters and novices, when faced with random arrangements of chess pieces, had equivalent recall (about half a dozen positions in each case). Rather, it is the ability to recognize patterns, which are then memorized, which distinguished the skilled players from the novices. When the positions of the pieces were taken from an actual game, the masters had almost total positional recall.

The de Groot research illustrates well the essence of strategic thinking. In this case, chess acumen – acumen being considered the accumulation of knowledge of useful patterns and key features of the situation – is applied with thinking that is imaginative, systematic, and opportunistic. Chess masters have the ability to perceive, classify, and use patterns.

The context of chess is different from the context of business, games, or war because the patterns of activity are different. Strategic thinkers develop acumen – the knowledge of patterns relevant to their competitive context, and blend it with a cognitive framework. Because the mind structures knowledge differently, the definition of strategic thinking as an individual competency is reinforced.

Reality: Chess Strategy is Developed – But there is a Role for Preparation

Here are some more research insights useful for understanding chess’s application and limitations to strategic thinking.

Eric Leifer, an American sociologist, asked chess grand masters how many maneuvers they pre-calculate.  The answer was none to one maneuver. Rather than working backwards from the end point of winning the game; instead, they develop it a move at a time. One obvious reason: chess is a competitive game, and opponent’s moves cannot be predicted.

Chess grand masters build up their game as do their opponents. Leifer asked for the reason for this strategy and got the answer that it is the only way to correct mistakes from the beginning of the game. As each player builds up their game, the winner eventually – in the endgame – finds a maneuver that breaks any resistance and puts the opponent out of action. Leifer found that skilled players seek to preserve flexibility.

This might lead you to believe that chess talent is inborn, and there is no need for planning. But, chess masters do prepare for their matches. What do they do? In planning for a chess match, chess masters spend little time visualizing the win and the steps to get there. Instead, their preparations focus on game development: the patterns of moves in their own games and that of their opponent. Key to this is looking for things that might be habitual, especially regarding the willingness to recognize mistakes, repeat mistakes, and correct mistakes.

Reality: Chess Is Strategic Venturing with Willingness to Say, “How Might I Be Wrong?”

In research described in Nature magazine in 2004, Michelle Cowley and Ruth Byrne found that chess players indeed “mentally map out the future consequences of each possible move.”

Cowley and Byrne found that good chess players do something that is qualitatively different; they invest more time thinking in an imaginatively and conceptual way about their opponent’s response.  Specifically, they imagined how the opponent could or would react and exploit whatever weakness is present in their position.  Good chess players falsify their own strategies by imagining the competitor’s response.

This expert approach has leadership implications: Experts are constantly testing their approach to find its vulnerabilities, and make their best choices that least-weaken their strategy.

Novices, on the other hand, tend to be blinded by their own optimism. They start telling themselves a story that they will be successful. In the case of novices, hope is a strategy.

Here is a great question that I heard asked by my friend Paul O’Connor when we were interviewing managers at a scientific instruments company:  What could your competitor do to you that would totally destroy your business?  In this particular instance, we learned that the company’s business thrust into China was very vulnerable, and needed to be made more robust.

More than Deductive Thinking

In my experience, I have seen many people flounder in strategic situations. Much of this can be explained by their preference for (and habits of) deductive thinking.  Deductive thinking is a style of thinking where the thinker takes broad principles, rules, conclusions, and truths and “backs into” the facts and arguments that support the outcome.

The VP quoted early in this article appears to be leaning on deductive thinking (“They decide before they begin what their checkmate will be and work back from that point). Perhaps he simply selected a poor analogy for making his point (planning a road trip involves knowing your goals and deducing the best ways to achieve it). Strategy involves recognizing competition and counter moves; moves which can only be guessed at.

Thus, we can see a distinction between long-range planning (the road trip) and strategy (winning at chess).  Long-range planning is relatively more deductive; however, it has a limitation because the planner needs useful, valid knowledge as a planning input. Who can predict what an equally talented and motivated competitor is going to do?

Strategy is often frustrating to people who habitually rely on deduction as a style of thinking.  As Richard Rumelt points out, treating strategy like a problem in deduction assume that anything worth knowing is already known. To generate a strategy, one must put aside the comfort and security of pure deduction and launch into the murkier waters of induction, analogy, judgment, and insight.

What are the other differences of chess with business strategy? Are there any transferable learnings?

Strategic Thinking Defined

Strategic Thinking Image over KalidescopeStrategic thinking is defined as the individual’s capacity for thinking conceptually, imaginatively, systematically, and opportunistically with regard to the attainment of success in the future.

Let’s unpack this definition. There are six elements of strategic thinking:

Success Oriented. The word “success” needs to be considered in the context of the usual meaning of the word strategy; that is, some field of competition where the strategy exploits advantage and leads to a desirable outcome for the strategist. For example, success in a game involves winning within the boundaries of a set of game rules.  Success in a military encounter might define the victor as the entity who holds the field at the conclusion of the battle. Success in business might be defined as penetrating a new market. Success in a political campaign might be defined as winning a referendum or elected office.  Consider this: if there is no competition, there is no need for strategy.

Richard Rumult (Good Strategy/Bad Strategy, page 127) tells us that strategy involves premeditation, anticipation of the reactions of others, and the design of coordinated action.

Success is the consequence of a strategy.  Thus, strategic thinking involves considering questions such as, What are the causes of success? What is the best way to design a strategy to fit the situation?

Aside from the idea of competition, it is fair to assert that the definition of success is influenced by context, particularly of the stakeholder. Success could be determined as betterment over the existing situation.

As a practical matter, the strategic thinker needs to address fundamental question such as, Who (and what) defines success? What metrics are in use? Notice that the opinions of individual stakeholders are relevant, so  the strategist needs to consider questions such as these:  Whose opinion is most important?

Future Oriented. Strategic thinking involves looking towards the future with an appreciation that present-moment decisions will have impact on the future. The future may be very different from the status quo. Strategic thinking must consider the outputs of what is commonly called “futurology” or “strategic foresight.” A strategic thinker takes into account the past and present, as part of the inputs for considering the future.

Cognitive. Strategic thinking employs mental process that are conceptual (abstractions, using analogy to translate across contexts), systematic (composed of different components with interfaces that interact to produce intended or emergent behaviors, pattern finding, and connecting situations that are not obviously related), imaginative (creative and visual), and opportunistic (searching for and grasping new information and value propositions).  The strategic thinker applies all of these cognitive processes in the orientation towards future success.

What Strategic Thinking is Not….

  • Strategic thinking is not the same thing as critical thinking. Although critical thinking is conceptual and systematic; experience shows that critical thinkers are less likely to be imaginative and opportunistic. Critical thinking can be a useful part of strategic thinking, but many critical thinkers are unable to think strategically; for example, designing a strategy to prevail over a competitor.
  • Strategic thinking is not the same thing as creative thinking. Creative thinking is imaginative and playful. Typically, creative thinking attends to a lesser degree to concepts, systems, and opportunities. However, creative thinking exercises often place no attention on the future success orientation. Creative thinking can also be a useful component of strategic thinking, but they are not identical. Again, strategic thinking involves designing a strategy to prevail over competitors; that is not something we naturally consider in creative thinking.
  • Strategic thinking is not the same thing as visionary thinking.  Visionary thinking is often simply dreaming big with the intention of inspiring others to adopt the vision. While visions might be useful, they need to be balanced with realism, data, and insights as to how to achieve the dream.  Strategic thinking involves a deeper level of conceptualizing – compared to visionary thinking – because the outcome that is envisions will only be achieved through creating and executing a strategy.
  • Strategic thinking is not the same thing as strategic planning or long-range planning. Many have experienced strategic planning or long-range planning as attaching words to the organization’s annual budget. Still other writers refer to the front end of structured business planning processes as strategic thinking, but that implies that the same action would apply to other fields where strategy is practiced: politics, military, sports, games, etc. Frankly, this is just sloppy reasoning on their part.  Organizations create strategies to achieve success, and the process of doing this is often termed strategic planning. However, as the paragraphs below point out, strategic thinking is an individual activity to be harnesses by group processes. Strategic thinking produces insights, which become inputs to the strategic planning process. The practice of strategic thinking by the individual may inform strategic choices and decisions.

Only Individuals Can Practice Strategic Thinking

Any kind of thinking is governed by the mind, or more specifically the brain.  Commonsense tells us that individuals – even people who are genetically identical – think differently and have different learned responses to coping with the world around them.

It follows from that reasoning that organizations do not practice strategic thinking because there is no single brain or mind at work. Thus, strategic thinking refers to an individual’s style of thinking.

The transition of individual thinking style to organizational process is this:

Organizations are collections of personalities that share some common purposes and culture. Individuals within the organization collaborate by surfacing  each individual’s thinking and sharing that those insights with others. Thus, thinking is an individual cognitive capability that generates insights and collaboration is a social process of merging and adapting those insights to meet a strategic challenge.

Individual Strategic Thinking and the Organizational Capacity for Strategy

Organizations intending on improving strategy should start with the previous section: the recognition that individuals are the practitioners of strategic thinking. Here is a three-pronged approach:

1. The organization should improve individual in strategic thinking competency. This could be done by training or coaching executives, high-potential employees, and those individuals who express interest in contributing to strategy.

2. It should create a cadre of individuals with competency in strategic thinking.

3. It should emphasize collaboration in its strategic planning process. This collaboration is multifaceted: up, down, and sideways in the organization.  The focal point of this collaboration is on identifying insights and sharing/combining/exploiting those insights with resources to achieve competitive advantage.

Each individual has a different set of experiences and perspectives.  The challenge is to bring together the experiences and perspectives – and individual insights – into a synthesized understanding of the situation and the need for coordinated actions.

Do you agree with the definitions and distinctions?