strategy mistakes to avoid

Two Case Studies in Strategic Thinking: Rick Pitino and Billy Beane

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Pitino-BeaneThis article describes two well-known executives who changed strategic contexts: one used patterns and analogies well and was successful; the other didn’t. First we will examine the experience of Rick Pitino – an outstanding college basketball coach – who struggled with coaching in the NBA. Then we will examine how Billy Beane of the Oakland A’s used creative desperation and a healthy skepticism to rethink his managerial approach with the Moneyball-era Oakland A’s baseball team.

Rick Pitino: Patterns for College Strategy Do Not Translate to the NBA

As a college coach, Pitino had a won-loss record of 371-137, as of 1997, and won a national championship with the University of Kentucky. Pitino agreed to move to the professional ranks to become the GM and coach of the Boston Celtics. This move created a great deal of excitement for the Boston fans. Unfortunately all involved, the excitement and optimism turned to anger when the team failed to perform to expectations. With a record of 102-146, Pitino left to return to the college ranks midway through his third season, hugely unpopular.

What went wrong?  How could this great strategist fail?  In an article titled, “Lessons Learned (and Forgotten) from Celtics’ Failed Rick Pitino Experiment,” Grant Hughes writes,

“Pitino’s coaching style, just like the persona he employed in interviews, was very much “Rick-centric.” On the court, that meant he had to win on his own terms. The full-court presses and mass substitutions that led to so much success in college were going to define his Celtics teams, consequences be damned. Even when it became clear that the desired results of Pitino’s preferred style—forced turnovers, a fast pace, general chaos—weren’t leading to wins, the coach stuck stubbornly to his guns.

Hughes points out this key to success in the NBA: Players dictate strategy—not the other way around.  Antione Winfield, who played for Pitino at Kentucky and later at Boston reinforces the idea of patterning actions around players, observed in a different interview:

“What I noticed playing for Coach (Pitino) at that time, I think you have to be patient. I think if you look at Rick Pitino and what he did in that era, he traded probably thirty guys. “He’d sign guys and trade them right away. His patience level was so low. You have to be patient and you have to build something. You have to start with one or two guys and kind of build around them, and that’s a lot of things college coaches don’t want to do because they’re so used to winning at the collegiate level, at such a high level. When they’re winning 85, 86, 87 percent of their games, and then you get to the NBA level and it’s not the same.”

From a strategic thinking perspective, it seems like the problems are rooted in the patterns and context: basketball is different at the college level and at the professional level. The learning is to develop a sensitivity for patterns and context. Pitino perhaps suffered from what Gary Klein calls “passive stance” or what others call frame blindness.

The Coach’s Learning

Gary Washburn, writer for the Boston Globe interviewed Pitino. Looking back on the experience, Pitino says,

“The [fact of the] matter is I didn’t do a good enough job as an executive. It also taught me about wearing a lot of hats, focusing on what you can do. It was a class organization. They treated me great. I [had] nothing but great things to say about it when Brad [Stevens] got the job. It’s just that it didn’t work out for me, but it did work out for me because without the Celtics, I wouldn’t have learned all about failure and all about humility.”

Gary Washburn, offers this observation in the same article:

It taught Pitino he is better at convincing parents in a rural Kentucky home to allow their child to start his next phase of life at Louisville than crossing his fingers for good luck in the NBA draft lottery.

Billy Beane: Reinvents Himself, His Organization, and His Industry

Billy Beane, General Manager of professional baseball’s Oakland A’s, is now well known from the book and movie, Moneyball.  As a player, Beane played in the majors for several years with different teams, finally spending more time in the minor leagues than he cared for.  He chose to end his playing career in 1990 to take a job as an advance scout. In 1997, he was promoted to General Manager, taking over from Sandy Alderson. Using sabermetrics techniques, the team made baseball’s playoffs despite one of the lowest payrolls in the game. Beane completely reversed traditional wisdom about how to build a team, coming to the conclusion that scouts had no idea of what they were talking about, and looking for new statistically-based measures of productivity.

Beane was successful in part because he changed his own personal patterns. Says Sandy Alderson, who was the A’s General Manager and brought Beane into the organization, says in the Michael Lewis’ book, Moneyball: The Art of Winning an Unfair Game,

“What Billy figured out at some point was that he wanted to be more like me than like Jose Canseco.”  Addressing Beane’s change of mindset and patterns, Alderson said, “Billy shed every one of his player-type prejudices and adapted. Whereas most of the people like him would have said, ‘that’s not the way we did it when I played.

It’s instructive to note Beane’s own perspective,

“If baseball’s all you can do and you know that’s all you can do, it breed in you a certain creative desperation.”

As a concluding thought, it’s rather interesting that both men suffered a humiliation.  Beane’s was that of a player struggling in the major leagues, and being relegated to the rougher life of an aging minor-league player. Beane’s marriage also broke up at the same time he concluded his playing career. Pitino’s quote on learning humility from his Boston experience shows growth, and perhaps has helped him be more strategic as a person and a coach in his return to college ranks.

As a strategic thinker, you must have a sensitivity to patterns and context.  Too, perhaps much of journey to become more competent in thinking strategically might be in the way that you learn – and bounce back – from failures. Do you agree?

Strategic Thinking & The Game of Chess: Myth and Reality

Greg Githens 3 Comments
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?

Action Without Thought is Impulsiveness, Thought Without Action is Procrastination

Greg Githens 5 Comments

Action with thought is impulsiveness thought without action is procrastination - Greg Githens

Impulsiveness is “the trait of acting suddenly on impulse without reflection.” Impulses are often described as “whims, sudden involuntary inclinations, unpremeditated, and instinctual urges.” Impulsiveness is good in some situations: an almost child-like quality marked by spontaneity, playfulness, and humor.

On the other hand, impulsiveness may be nothing more than bad habit and selfishness. When impulsiveness is unwanted, the message seems to be this:

think – that is, reflect at a deeper level – before acting.

The opposite of strategic thinking might be mindlessness. The characteristics of mindless thinking are little concern with outcomes, present focused, focus on concrete elements of the task, little imagination, little courage, lost in details, and unconcerned with opportunities.  When scientists want to study people with high degrees of impulsivity, they research inmates in prisons!

Procrastination is a habit of delaying action on something that is important. It is often habitual and arises from analysis paralysis, lazy thinking, fear, or unclear values. Procrastinators should take action, but don’t.

Procrastination is not an intentional delay to minimize the probability of loss.  As psychologist Piers Steel (author of the The Procrastination Equation) points out, procrastination is an irrational delay. Thus, procrastination is not strategic in the sense of avoiding threats or capturing opportunities.

Both Impulsiveness and Procrastination Are Disengaged Thinking

The extraordinary availability of gadgetry – smartphones and the like – seems rule people’s life: stories emerge of people checking for updates in the most inappropriate of places or times: church, job interviews, seminars, driving, and even sex!

Gadgetry and impulsiveness seem to go together. People need to think through the consequences.  Impulsive use of gadgetry is also procrastination, in that it defers action something important that you know you should be doing (developing a spiritual life, showing a basic courtesy to an interviewer, paying attention to new learnings, being a safe driver, being intimate).

People who thinking strategically focus on that which is important to their success. They know that there are more and less important things in life, and they need to make choices about when to be bold and when to be cautious.

To Think Strategically is to Balance Thought and Action

Both impulsiveness and procrastination seem to be in tension with each other. That means that each is a polarity to manage, and the key in any polarity is to manage a balance. How?  First, I try to monitor and manage my attention so that I don’t spend too much time in thought, and to catch myself when I am impulsively plunging into action.  Even better, I trying to both “think and do” simultaneously; with practice, it is not too hard.  Also, I find perspective in F. Scott Fitzgerald’s quote:

The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.

Second, I keep in mind the idea that mistakes can easily be made (by me and by others). I constantly try to be alert for mistakes, and I have internalized that into a technique that I call The Compact Approach to Strategy.

The third thing I do is related to mistake avoidance: I maintain the vision or working definition of success for myself or the endeavor at hand. Strategic thinking is not the same as creative thinking; creative thinking is concerned with cleverness and strategic thinking is concerned with strategy and success.

Fourth, I recall experiences in agile product development organizations, where they divide work into discrete chunks, and use experimentation and prototyping.  This iterative approach gives us useful information that allows them to rapidly move towards workable ideas.  They are not concerned with the perfection; they are concerned with workable ideas that serve as small wins for betterment.

Are You “Lost in the Weeds?”

I frequently am asked a question by people who know they should be strategic, but are trapped by habit into a comfort zone of technical activities. They ask, “How do I keep myself from being lost in the weeds?”

My reply is that they first should congratulate themselves, because they are recognizing they have a problem that is limiting their effectiveness. This is not unlike addiction recovery programs; the first step is to “admit that you have a problem” and understand how this problem is affecting yourself and others.  (Admittedly, the problem of “being tactical” rather than strategic may not equate to the misery of drug addiction, but it still affects your life in that you may be missing opportunities that could lead to your success.)

“Being tactical rather than strategic” is a form of procrastination.

Regardless, being “lost in the weeds” is both a habit of spending too much time in your comfort  zone (rather than your learning zone). As basic as it may be, the advice is simple: raise up your head (pay attention) and look around (at the strategic context).

Competent strategic thinkers manage their attention, and are aware of the balance between contemplation and action. As you get more comfortable with this balance, you will find that thought and action are more similar than they are different.

How does the idea that “action without thought is impulsiveness and thought without action is procrastination” apply to your goal to be a better strategic thinker?

How to Use the 4Ps to Capture Future Scenarios: Thinking Strategically

Greg Githens 4 Comments

How to Capture The Future

Strategic thinking involves thinking imaginatively about the future. It enables the strategist(s) to articulate answers to two questions,”What are the things that might happen in the future? And, what is the realistic future state that I desire?

Strategic Foresight

Richard Slaughter defines strategic foresight:

Strategic foresight is the ability to create and maintain a high-quality, coherent and functional forward view and to use the insights arising in organizationally useful ways. It represents a fusion of futures methods with those of strategic management.

 Strategic foresight is a sub-discipline of strategic thinking, and it can help you develop answers to those two questions. Strategic foresight not crystal ball gazing (prediction), it is about discerning factors that create the future and describing alternate futures. Why? The purpose is practical: generate insights about the future so that the strategist can make better present-day choices.

The 4Ps

There are four broad categories of futures, the 4Ps: they are the possible, plausible, probable, and preferred futures. (There is a 5th P, potential futures, where the strategist applies unbounded imagination and extends the vision into realms that are best termed fantasy.) Ideally, we approach the 4Ps in the order suggested in the nearby graphic.

The strategist should begin with the possible future with the goal of developing a broad understanding of the situation.  Now is the time to consider “wild card” scenarios or “black swan” events. Divergent thinking (as opposed to convergent thinking) and an expeditionary mindset are appropriate styles of thinking.

  • Questions to Ask: What is the most radically-different unbounded future that I can imagine? What is the best and the worst case?  What is strange, weird, and crazy? Might it happen?
  • Answer to Expect:  Yes, the scenario might happen.

Next, she narrows into plausible future states (those which are “seemingly or apparently valid, likely, or acceptable; credible”). Convergent thinking is used.  An important idea for this is to consider the “narrative arc” of the organization or situation.

  • Questions to Ask: Which future states are feasible, given what we know at present? What would have to happen for this state to arise? How does this future state mesh with the founding mission of the organization and the values of the founders and other stakeholders? Could it happen?
  • Answer to Expect:  Yes, the scenario is plausible.

The third of the 4Ps is the probable future.  The strategic thinker is getting increasingly more analytical and applying systems thinking (being systematic in thinking is one of the four qualities of strategic thinking).  Here, she considers causal factors, delays, and weighting for the contribution of the causal factors to the emerging outcome.

  • Questions to Ask: Which events (that would cause this future) are is most likely?  What other events need to happen, too?  Where can we get data to support our assumptions? How likely is this future to happen?
  • Answer to Expect:  We have a systematic understanding of what would cause each scenario, and an estimate of the probabilities.

The fourth P is the preferred future state.  We can influence our future.  We can find the performance gaps and create strategic initiatives to close the gap.

  • Questions to Ask: What future do I prefer? What choices should I make about scope, objectives, and advantage? (See this article for more on those three elements.) What do I want to happen?
  • Answer to Expect:  This is the scenario that most fits my ambitions and expectations.

Cautions About the Preferred Future

The flow of attention described – possible to plausible to probable to preferred futures – is an ideal. It’s difficult to practice because it starts with imaginative and ambiguous scenarios.

It’s easier for people to start with stating a preferred future. However, that is problematic because the alternatives are feasible and occasionally do occur. You can’t be proactive if haven’t considered the future that you are pro-acting to.  As difficult as it may seem, the strategic thinker will consider alternative futures.

In those organizations that have established and mature process, people often hold unexamined assumptions is that the future will resemble the present. This is a status quo bias, and we see the results continually in firms that have been unable to respond to technology or social trends: film-based photography, newspapers, and bricks-and-mortar retailers of videocassettes to name just a few.

Aspirational visioning is common. Consider a large publically-traded company in agribusiness, a very mature business.  The CEO had seen a presentation on Red Ocean Blue Ocean strategy (The blue ocean is a new wide-open market where you don’t have to fight it out with competitors).  He challenged the Presidents of all of his business units to grow substantially in the next five years. People made some attempts to dream big ideas, but it the goal was soon forgotten as day-to-day operations reasserted their priority. Masked by the “great recession,” the company missed signals that its markets were fundamentally changing. The company ultimately shrank in size!

When managers move quickly to the preferred future, they often make the mistake of confusing the goal for a strategy. Note what UCLA’s Richard Rumelt says about this in his book, Good Strategy/Bad Strategy. He writes,

“Executives who complain about execution problems have usually confused strategy with goal setting. When the “strategy process is basically a game of setting performance goals – so much market share and so much profit, so many students graduating high schools, so many visitors to the museum – then there remains a yawning gap between these ambitions and action.  Strategy is about how an organization will move forward. Doing strategy is figuring out how to advance the organization’s interests. Of course, a leader can set goals and delegate to others the job of figuring out what to do. But that is not strategy. If that is how the organization runs, let’s skip the spin and be honest – call it goal setting.”

By examining the futures in the more rigorous way espoused here – possible, plausible, probable, and then preferred – the strategist increases the likelihood that they are considering real organizational issues that deserve attention and resources. Too, the act of generating alternatives increases the prospects of finding the insights that are necessary for a brilliant strategy.  As practical advice, consider increasing the amount of effort in strategic foresight, and then distributing your time in this way:

  • Possible Futures – 15%
  • Plausible and Probable Futures – 60%
  • Preferred Futures – 25%

You should iterate through versions of the plausible and probable futures.  You might want to occasionally relook the possible futures to see if they might be better categorized as plausible so as to avoid a blind spot.  Too, revisiting the possible futures might cause you to see a strategic driver in a new way.Strategic Thinking Definition

Remember that the definition of strategic thinking is not simply about imaging a future, it is doing with the intent of being better off in the future. Although this could be dismissed as “just a creative exercise,” it has the potential of sparking important creative insights necessary for building a good strategy.

How have you applied the 4Ps to your development of strategy?