Intuition and Insight

Intuition InsightThe concepts of intuition and insight are similar in that they both are unconscious realizations that can guide strategic decision making. However, intuition and insight function differently and this leads to strengths and drawbacks in creating strategic action. Consider this question,

When should I lean on intuition and
when should I lean on insight for guidance in strategy?

This article will help you further refine your application of strategic thinking.

Intuition

Intuition is the ability to understand a situation immediately, without the need for conscious reasoning. Intuition comes from well-formed memories and is a type of expertise. Let’s consider an example:

Most of us know executives who have been with their firms for a long time and who understand how the business operates. When it comes to strategy, their style is typically informal and conversational.  Ideas are kicked around, and decisions are made.  These executives are right most of the time, and are typically venerated within the organization for their abilities.  When you ask them how they make their decisions, they unapologetically say that they have a feel or sixth sense for how things could work.

Wrong Applications

It fairly common for people to go to their bosses for an important decision. It’s also common for the boss to rely on intuition. The good news is that intuitive styles are very efficient and workable.

The bad news is that reliance on intuition often allows a person to discount external changes and ambiguities. Intuition to be inappropriate for the situation.

Because intuition is learned knowledge, it shares the same bed with habits. Often the intuition falters when the external situation changes as the habits of status quo hinder framing a new model of organizational performance.

Insight               

Whereas intuition comes from the activation of something you already know, insight is the discovery of new patterns or the reframing of patterns. As Gary Klein describes it, insight is the conversion of a mediocre story to a better story.

In my article, on 3Ms Post Its, I described an “aha moment” by co-inventor Art Fry who slaps his forehead and exclaims, “what we have here is a whole new way to communicate.” Post Its were not simply scrap paper coated with a weak adhesive, but a way to call attention to a document and create focused action (such as indicating where a signature is needed).

The example of Absolute Vodka at home parties in this article is particularly instructive on the nature of insight generation.  I this case, researchers collected data and studied with a trained eye. They looked for patterns and found that alcohol at home parties represents a different kind of social lubricant, not about status and taste but about individuality and humor.

How (and When) to Apply

Those readers familiar with Meyers-Briggs assessment of personality will probably recognize that  intuition and insight generally reflect the “N” intuitive thinking preference and the “S” sensing preference. Sometimes individual preferences become blind spots, so I’d argue that it an agile, flexible style of thinking is most appropriate.

Both insight and intuition use data and result in a conclusion. Generally speaking, insights tend to come more from external data or from use of models whereas intuition leans on personal learning and experiences.

Intuition is more subjective to the individual’s past experiences and training. We might want to consider the breadth of experience that person has. You might ask questions such as these: What is the source of intuition? What experiences are being applied? What parts of the experience are relevant to the current situation?

Insight leans more heavily on objective data. You might ask questions such as these: What is source of the insight?  What data is being applied?

Both intuition and insight are valuable. Intuition comes from experience, and can make for efficient decisions.  The big caveat is to make sure that the experience is relevant to the situation at hand. When you don’t have experience to lean on, you should work on capturing insights.

Thus, we continue to build a case for the importance of self-awareness and metacognition (awareness of your own thinking) as important elements of strategic thinking competency. We need to be on guard for “flow” and effortless management of situations, because strategy often involves things that are just outside of what we’ve chosen to notice.

Do you agree that the distinction between intuition and insight is important?

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The Six Elements of Strategy: A Pattern Perspective

Patterns

Because chess is a game of patterns, you could say that a chess Grand Master is an expert with chess patterns.  Similarly, a strategy master is expert with strategy patterns.

The proposition raises an interesting strategic thinking question, “What are the patterns in strategy?” Patterns are regularities, and their presence suggests some kind of predictability. In chess there are opening moves, in entrepreneurialism there are predictable start-up challenges. In chess, you might have several of your valuable pieces captured, in business your customers can defect to competitors.

There seems to be a countless number of patterns of strategy. Instead of a full cataloguing, let’s find the minimum elements that could describe strategy patterns. To keep it simple, I’ll assume that if a chess player plays 10 matches, there were 10 strategies used by her. Now, turning to the idea of strategy being composed of patterns, I believe there are six elements. They are as follows: players, analysis of the situation, degree of relative advantage/disadvantage in position, resources, decisions about deploying the resources, and an overall life cycle of the strategy.

Let’s see if the six-element model – a pattern – holds for the chess analogy. There are two players. The lifecycle starts with the agreement to join in a game, and its endgame is a checkmate or agreement that it is a draw with no winner. In the opening of a chess game, the players are even in terms of advantage and resources. Throughout the game, each player monitors the situation. Each player makes a decision and moves a resource, followed by the other moving a resource. Soon, the players recognize that they are in a position of advantage or disadvantage; and each continues to move resources until the game ends with victory for one of the players, or a stalemate. The six-element model is valid here!

What about the application to strategies with greater consequences than a chess game? The 2012 United States presidential election involved two principal candidates (players), challenger Mitt Romney and incumbent Barack Obama. The lifecycle begins with each’s announcement of candidacy and end with Romney’s election-night concession and Obama’s victory speech.  Each came into the contest with important resources such as the candidate’s experience, dollars, and organization. Each had perceived advantages: Obama’s incumbency and Romney’s business background.  Interestingly, those advantages were often cast as liabilities. Each campaign made decisions about its resources: where should the candidate go to speak, and where should you send a surrogate? Advantage ebbed and flowed throughout the contest, and the final advantage was not clear until late in the evening of Election Day. Again, the six-element model seems to capture the essential elements of strategy.

These six elements appear to be universal to any situation involving strategy. I call them the master pattern of strategy, but the words archetype or template convey similar meanings. I invite you to test them against your knowledge of a business’s strategy, warfare, or other situations. I would be interested to learn if there are any exceptions.

Next, let’s examine each of the six elements, and the patterns within the element.

  • Lifecycle – The lifecycle for a strategy is similar to other lifecycles: beginning, middle, and end. The lifecycle of a game of chess involves phases that I call the phases of the strategy lifecycle for chess: pre-engagement, opening, development, endgame, and post game. For a business strategy, it might be diagnosis of a challenge, formulation of intent, creation of policy and resources, and implementation of decisions. You could also view this lifecycle for a strategy as a subset of the organization’s lifecycle.
  • Players – The players are normally individuals, but could be organizations. Regardless, there are repeating patterns, such as values and habits that guide their decision making. From a strategy perspective, we know that self-awareness is one important skill for the strategist. By extension, the strategist seeks to learn their opponent’s intentions and patterns of behavior, which may yield an advantage. In some cases, each player’s narrative arc, that is, their life story becomes a resource and a link to the lifecycle of a strategy. Examples would include each of the two presidential candidates touting their life story as evidence for their qualifications for the Presidency, Christopher Columbus’ experiences as a sailor and as a mapmaker in Lisbon, and Estee Lauder’s experience as a woman in post-WWI and WWII New York City.
  • Situation – The situation is your subjective assessment of those factors that describe your status or position in the strategic milieu. This element is rich in patterns, with some patterns more relevant to others. For example, weather is a series of patterns. There are trends in the economy. New entrants enter markets. All of these affect the strategist because the context changes, putting the strategist in a new situation. Not to be overlooked are patterns that describe possible future scenarios.
  • Resources – Resources are the source of power. The rook piece in chess has a defined power different from that found in a pawn, and has constraints on how it can move. The rook has flexibilities different from a pawn. In other examples, we can see that inventors gain power by securing patents. Armies have power provided by the skill level and motivation of its soldiers and officers.
  • Relative advantage – Although related to the element of situation, the relative advantage is important enough to warrant its own category. The relative advantage is the real goal of a strategy: to create advantage over something else. This element forces an important question related to context, resources, and decisions: Am I in a stronger or weaker position?
  • Decisions to commit resources – This element involves concepts like movements of resources, reversibility of commitments, and rules (existing and emerging) and constraints. From a pattern perspective, you might consider whether habit and inertia will dominate the decisions, or whether there needs to be breakthrough.

How You Use This as a Tool

Finally, let’s return to the statement that chess grand masters are experts with chess patterns, and the logical extension that strategy masters are experts of strategy patterns.  If you are concerned about strategy in business, it will do you little good to learn chess patterns. (And, for the record, I don’t play chess.)  Instead, you need to learn about your business’s context: its success factors, the competitors, the role of government regulation, and so forth.  Consider making a list of those patterns, and consult and edit your list from time to time, knowing that often entrenched behaviors and wisdom are vulnerabilities that competitors can exploit. Even better, organize that list into a hierarchical map of patterns.

The definition of a pattern as a regularity should stimulate some useful questions: What regularities are present in the industry (seasonality, correlation with GDP)? What regularities do you have in your decision-making or other habits (pricing decisions, talent decisions, meeting management)?

Strategic thinking often involves reframing, which is the practice of taking on new perspectives.  Patterns functions as frames; they give you a sense of structure. They help you make predictions. On the other hand, patterns may also be the source of status quo thinking and make you vulnerable to a competitor who has better insights than you do.

Try applying this six element model to a strategic situation. Does it offer you a better understanding or insights?

Chess, Patterns, Analogy, and Strategic Thinking (Part 2)

Patterns & Strategic ThinkingSuccess in the game of chess is based on principles that apply in other strategic thinking situations (as introduced in the prior article in this series).

Patterns as Essential Element of Strategy

The focus of this article is further developing the concept of patterns in strategy, I will return to the example of chess introduced in the prior article. Patterns are a common element of all strategic situations.

Adriaan de Groot concludes, in his research on chess mastery (see the Wikipedia entry), that:

“it is the ability to recognize patterns, which are then memorized, which distinguished the skilled players from the novices.”

These two distinguishing characteristics – pattern recognition and memory – are relevant to strategic thinking in any domain, not just chess.  My straightforward recommendation for improving your strategic thinking is to develop your ability to recognize and learning patterns.

Recognizing Patterns              

Chess is a game of patterns with colorful names like the Catalan Opening, the Sicilian Defense and the King’s Indian Attack. These patterns -albeit jargon – help chess players improve their game strategy.

Patterns are easily observed in other strategic contexts. In business, strategists have knowledge of patterns like double-entry accounting, the CAP-M financial model, and Porter’s Five Forces of industry attractiveness. The game of American football has colorful names for patterns such as the flying wedge, the wishbone, goal line stands, and red zones. The US Army has an offensive operation known as Envelopment which was used with great success at the opening of the Desert Storm operation in Kuwait in 1990. Notice that each domain (or strategic context) has its own patterns (and jargon); doesn’t it make sense that mastery involves the ability to recognize a pattern within a domain?

Memorizing Patterns

Next, let’s examine the importance of Adriaan de Groot’s finding that chess experts have an ability to memorize the patterns in such a way that they can then access the memory and apply it to the game. Stated simply, chess masters learn and apply information about chess patterns just as people in other contexts learn and apply patterns.

Most people have practiced rote memorization, and know that they need to keep the task simple. Further, they need to reinforce with repetition to put it into long-term memory (think about experiences with multiplication table drills). In chess, rote memorization of the rules is a starting point. Rote memorization falls apart when we have to apply those rules to strategic situations.

(See the “sidebar” at the bottom of this post for an interesting examination how IBM’s Deep Blue computer bested Gary Kasparov – and its implications for strategic thinking.)

Through the work of David Ausubel others, academics now widely agree that people learn new things by associating new knowledge with related and already-known knowledge. Children learn letters, then words, then sentences. Knowledge is built up from simple to complex. Memory becomes a cognitive structure of related patterns.

Using Ausubel’s constructivist approach, we can theorize that chess players first learn a few patterns, establishing a basic cognitive structure. Then the player adds to the cognitive structure. At some point they reach mastery, and hold a rich and robust scaffold of knowledge.

The player progressively gains expertise as they add new knowledge to cognitive structure. They find that the new information helps them to refine, sharpen, and correct existing ideas.

Chunking is another concept of memory that is especially helpful for short-term memory and for moving concepts from short-term memory into long-term memory. For example, telephone numbers have chunks of digits that we know as country codes, area codes, exchange codes, and phone numbers. As a learning strategy, look for chunks of knowledge.

Neuroscientist Daniel Bor says there are three activities involved in chunking. The first is the search for chunks. The second is the noticing and memorizing of those chunks. The third is the use of the chunks we’ve already built up.

Consider chunks as a gateway to patterns:

Patterns are a tool for chunking memory.
And chunks are a tool for organizing patterns.

It seems that the quantity and quality of patterns in memory is a key to opportunity recognition, and therefore strategic thinking. It is fair to say that within each domain (warfare, chess, business, etc.) there are many patterns. The goal is to organize and structured knowledge in such a way that the brain can access the memory for patterns. This gives the person the ability to quickly match the pattern and find what is interesting.

How? Use chunking to commit some early patterns to memory, probably through some sort of rote learning or a simple analogy or a mnemonic. Further enrich them with examples. Now, practice scaffolding – working through analogy to relate new patterns to old patterns.

As an additional suggestion for memory, patterns, and culture, check out my description of Kolb’s learning cycle in this post.

Conclusion – Questions for Practical Application of Concepts

The game of chess provides a starting point for identifying some of the fundamentals of strategic thinking. In this article, I identified patterns as a generic element of all strategies, and discussed how the strategist recognizes patterns and memorizes them.

Are you alert for patterns? Do you practice analogies? Could you list the most important and essential patterns associated with your organization? Do you try to falsify your knowledge and strategies?

Do you agree that the ability to apprehend patterns and comprehend patterns is important to strategic thinking?

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Sidebar:

On Chess Patterns and the True Nature of Intelligence

In 1997, IBM’s supercomputer “Deep Blue” defeated chess grandmaster Gary Kasparov in a highly publicized six-game match. Are there implications for the study of strategic thinking? Beating Kasparov was an engineering feat, not  a breakthrough in strategic thinking. Deep Blue was programmed in a way that is akin to rote memory rather than the generation of insights. James Somers points out:

“Deep Blue won by brute force. For each legal move it could make at a given point in the game, it would consider its opponent’s responses, its own responses to those responses, and so on for six or more steps down the line. With a fast evaluation function, it would calculate a score for each possible position, and then make the move that led to the best score. What allowed Deep Blue to beat the world’s best humans was raw computational power. It could evaluate up to 330 million positions a second while Kasparov could evaluate only a few dozen before having to make a decision.

It’s hard to make the case that a computer has exercised an intelligence that we could call humanistic or strategic. Deep Blue simply recognized patterns and matched them against a repository of patterns.  Perhaps we could say that it generated insights, but those insights were of low quality compared to what humans can do (for examples, see my articles on insight generation by the inventors of 3M’s Post It notes or the field researchers for Absolut Vodka).

The above quote was from an article titled “The Man Who Would Teach Machines to Think” in the November 2013 issue of Atlantic Magazine. The “man” referenced in Somers’ article is Pulitzer Prize winning author Douglas Hofstadter, who won for his book Godel Escher Bach in 1980.  Hofstadter says that the fluid nature of mental categories is the core of human intelligence. Somers’ article quotes Hofstadter and explains,

“Cognition is recognition,” he likes to say. He describes “seeing as” the essential cognitive act: you see some lines as “an A,” you see a hunk of wood as “a table,” you see a meeting as “an emperor-has-no-clothes situation” and a friend’s pouting as “sour grapes” and a young man’s style as “hipsterish” and on and on throughout your day.

Hofstadter suggests that thinking and learning is mostly a process of forming analogies: something reminds you of something that reminds you of yet something else. Mental categories are the way that we organize the knowledge structure.

We’ve all had conversations like where the overall direction of the conversation is set by the way that each person’s recollections are stimulated by something that another said: We hear something and say, “that reminds me of _____ .” We make the connection – have an insight – and the conversation continues. Not surprisingly, strategy is developed through conversation. Initially, the conversations in organizations are about sharing each person’s sense of the situation and the solution to others.  The agreement of the stakeholders is the “buy in.”

The practical advice for the strategic thinker: become more aware of your use of analogies. How is one strategic situation (pattern) similar and different from another?  Watch for a future article that about two well-known CEO’s who changed strategic contexts: one used patterns and analogies well and was successful; the other didn’t.

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How to Improve Your Ability to Imagine the Future

how to improve your ability to imagine the futureStrategic thinking is a style of thinking that – among other things – is concerned about the future.  When done well, we could say that strategic thinking makes a person more “futures ready;” that is, having an attitude that is comfortable with change, anticipates change, and proactive with responses. Unfortunately, this futures-ready stance is not common. However, we can train people to be more futures ready. This article provides an approach that starts with the individual.

A Thought Experiment

Try out this exercise. Imagine yourself 15 years ago. The year is 1998.  Consider these questions:

  • In 1998 mobile phones were gaining widespread use. Could you have imagined how they would have taken over functions like time keeping, photography, and gaming?  Could you have imagined laws being promulgated to restrict texting while driving?
  • In 1998, would you have imagined that any of your friends or family would have died “before their time?” I can say – based on my own experience with a death of someone close to me – that it makes a lasting impression and causes a re-thinking of priorities.
  • In 1998, most babies in the US were born to parents married to each other.  Today, more are born to single women than to married parents. Would you have predicted that?
  • In 1998, could you have imagined these two economic slowdowns: the “dot com bust” and the “Great Recession?”
  • In 1998, would you have imagined a terrorist attack on US soil that would have changed the structure of government, airport security, and entry into sporting events? The scope and far-ranging impact of the 9/11 attacks has created all kinds of change to the daily life of Americans and others.

I have conducted the above thought experiment with many people, and note this pattern: the person realizes that the amount of change has been astounding.  One person called their experience with change, “jaw dropping.” These memories and reminiscences can be quite strong and stimulate some interesting conversations; but, the point is to get them to shift their thinking towards the future.

Now, some readers would answer the thought experiment with this response, “Sure, I could have imagined this.”  However, you probably didn’t. You were probably concerned with the joys and problems of your life at that moment in time. You were (and are) probably like most people: you the present time is your reality. It is concrete, whereas the future is an abstraction that gets little of your attention.

After looking 15 years into the past, I next ask them to imagine 15 years into the future. If I want to really stimulate their imagination (or aggravate them), I ask them to imagine as much “jaw dropping change” for the future as they recall for the past. This is difficult, and requires encouragement.

Most people think tomorrow will be more of today. They develop views of the future that linear extrapolations of the current condition.

Let’s put the 15-year span into perspective. Home mortgages are typically 15 or 30 years.  Some people own their cars for 15 years and are even wearing the same suits and shoes. Fifteen years is the lifespan of a family dog. Those examples show us that 15 is an understandable span of time.

One common pattern is that people — looking back in time –often refer to the passage of time as a “blink” or “time flies.” However, when looking into the future, people tend to discount how fast it will arrive.  This asymmetry tells us that it is tough to be “futures ready.”

Envisioning the Future – Start With Some Easy Questions

The following questions are about the future, and have answers that require only a bit of arithmetic and imagination. Write down your answers to these questions.

  1. What is your age in the year 2028?  Imagine your parents or grandparents at that age and their physical and mental health? How old will your children be?
  2. How many years has your organization (employer) been in business in 2028?

Expand your answers with some written words or images. Linger on this description, engaging your intuition; does it feel right? Then try to look at that future with a different perspective and consider other questions that might help you with envisioning.

Trends – Useful but Remember the Wildcard Scenario

Invariably, the discussion of the future brings in trends and forecasting, so go ahead and make note of the them. The typical list includes: climate change, wearable technology, population growth, nations that we now consider developing are fully developed, more weapons (international and domestic), and more globally-interconnected communications.

Futurists recommend that any futures-ready view include a “wild card scenario.”  Consult the above thought experiment placing you in the year 1998: terrorist attacks and the Great Recession might qualify as wildcards: extraordinary events that might be difficult to anticipate but have far-ranging effects.  Here are a two ideas for wildcards that could disrupt life as we now know it: pandemics and a large meteor strike.

Delight and Disaster Scenarios

Here is one more exercise for your imagination. Imagine two futures. One is optimistic and wonderful. It is the ideal world.  The second scenario is one that is more pessimistic.  Explore what that scenario is like for you personality, your organization, and your network of friends, family, and social organizations. Emphasize the impact of the scenario, rather than the probability of occurrence.

Recognize How Status Quo Becomes a  Barrier

Earlier I noted that people don’t do as well with future imaginings compared to past rememberings.

One reason is that  people tend to remember things that are recent, concrete, and salient. This is often referred to as the  anchoring bias.  A second reason is that the future is ambiguous and people tend to be ambiguity avoiders. People prefer to think and talk about things that they have evidence for, and avoid things that don’t.

What is most real? The present. This shows up as status quo thinking. Recognize it as a barrier, and apply both imagination and analysis to developing a view of the future.

Expanding the Future

These thought experiments add value to your strategic thinking because they place patterns and ideas into your memory. Your subconscious  works with these concepts by recognizing patterns and producing insights.

What other ideas do you have for helping individuals become more “futures ready?”

Alertness for Strategic Opportunities: Hold These Three Attitudes

opportunities are everywhere

All though it is true that strategy involves some sort of premeditation, any experienced general knows that the plan will change with the first shots of battle. Opportunities will open up in unexpected places; so, strategic thinkers want to be alert – watchful, vigilant, and perceptive – for opportunities.

Passive and Active Opportunity Recognition

An opportunity is an event, observation, or option that has the potential to be favorable to someone. The word opportunity in Latin is a contraction of the words “ob” and “portus,” meaning facing in the direction of harbor.  Picture yourself as a Roman seaman, sailing in from the treacherous sea, with the wind blowing you naturally into the harbor. This is passive opportunity recognition: sometimes opportunities happen on their own. Luck is a good thing! Accept the gift and move on.

Entrepreneurs develop a sense of discovering, pursuing, and capitalizing on opportunities that lead to principled success. They are active in their thinking. Again, picture yourself as a Roman seaman entering a port filled with people who want to trade with you.  Your short-term opportunity is to buy and sell. Your long-term opportunity is the recognition of patterns and development of business relationships.

There are three attitudes that can help you be more alert to opportunities.

Attitude 1: Expect to be Surprised

Status quo situations are stable, predictable, and understandable. Although future can be these things, it can also be the opposite. You will be more likely to recognize opportunity if you assume your situation is characterized with these terms: dynamic, ill-structured, ambiguous, and unpredictable.

Evidence is all around us that some industries are undergoing profound and disruptive change. The winners are not those who have the grandest aspirations and goals and most polished processes; they are the ones who can recognize the change early enough and adapt with agility. You will increase your chances for success if you,

Assume the situation is chaotic, and then ask yourself: where are the opportunities?Strategic Thinking Definition

Attitude 2: Have a Mentality of Abundance

Here we choose an assumption that we are blessed an abundance of creativity, talent, connections, ideas, technology, karma, and so forth. Admittedly it is optimistic, but holding an attitude of abundance doesn’t need to be seen as unrealistic.

Here is a personal example: I don’t particularly like to prospect for new clients. However, I find that when I assume (imagine, visualize)  that people will say, “I’m really glad you contacted me,” I find that I am more motivated to make the contacts.  Sometimes the prospecting pays off handsomely!

I see the opposite attitude frequently: the attitude of scarcity. The attitude of scarcity appears when a person assumes that there is finite and limited time, money, people, or resources.  Here is one example of how it manifests itself. In my seminars, I often have an icebreaker game that involves designing a structure out of pipe cleaners where teams have to design and construct it in 10 minutes.  When we debrief afterwards, participants typically note that the time limit restricted the quality of their design. My response to them is, “I would have given you more time if you would have asked for it. I also have more materials available and I would have given you more if you would have asked.”  Their faces show amazement as they realize their scarcity assumption about time and resources has foreclosed on an opportunity.

You will be more alert to opportunity if you hold an attitude of abundance.

Attitude 3: The Criterion is Plausibility, Not Perfection

When opportunities emerge, they are usually messy and incomplete. These imperfections are discouraging if not downright unattractive. Sometimes and it seems little use in building a business case. This observation from venture capitalist Don Rainey shows the value of looking past imperfections,

Your ability to see the imperfection shouldn’t blind you to the larger possibilities. In my venture capital firm, when we hire new, (typically younger people), into the business, we are accustomed to the newcomers hating every deal. They are smart enough to see the imperfection but not yet experienced enough to be confident accepting that the imperfection doesn’t define the opportunity. Endeavor to see the opportunity in spite of the imperfection of the current presentation.

I suggest that you consciously use the word “plausible” as you evaluate the worthiness of an opportunity.  This helps you make a nice conceptual fit with the 4Ps futures that I discussed in this article.

Calm and Relaxed

As with any kind of strategic thinking, you will get better results if you are in a relaxed and playful state of mind.

The right attitudes and mindset towards opportunity will make you a better strategic thinker. In addition to these three attitudes, what mindsets will help you?