Three Healthy Practices for Enhancing Strategic Foresight

Strategic Risk Probability Impact GraphBy definition, strategic thinking is concerned about success in the future. It is a style of thinking that imaginative AND systematic.  As contrasted with reading palms or charting the movement of the Zodiac constellations, strategic thinkers look to rational methods that fall in the discipline of “futures” or “strategic foresight.” The goal of the strategic thinker is to develop insights and design strategy that recognizes that the future cannot be predicted.

I tell audiences that leaders must prepare for multiple potential futures, enabling them to adjust faster to rapidly changing geopolitical, economic, regulatory and technical developments. Envisioning such possible futures and determining how to best meet those requirements can help leaders create a more agile and responsive set of strategic capabilities. To create a more agile and change-capable organization, you should focus your efforts on becoming “futures-ready.” Here are three healthy practices that can assist you in developing a robust perspective future:

Healthy Practice #1: Be Skeptical of Vision Statements

Visioning is an exercise to develop perspective and dialogue about the future, not a “locked in” objective. Many vision statements assume that the future will look a lot like the past. In this case, vision becomes the sole hypothesis about what will happen. It becomes a prediction. This single-hypothesis assumption, in a nutshell, is the difference between long-range planning and strategic planning.

Healthy Practice #2: Use Risk and Opportunity Analysis as Inputs

Most organizations spend some time with formal risk assessment, resulting in a list of “things to watch for and manage.” Although many times the risk analysis seems to be more of a litany of standard problems, I find that the effort could be used to create a greater awareness of the future.  After all, isn’t the risk analysis simply recognizing that there is a cause-effect relationship between a risk event and its consequence?

Healthy Practice #3: Imagine the Best Case and Worst Case Scenarios

Since no one can anticipate the future with certainty, it’s wise to consider scenarios. What is the best that could happen to you? What is the worst?

This is just a few of many healthy practices for developing a strategic foresight. How have you used them? What other practices do you suggest?

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 versus the “Facilitation Fluff” of Strategic Planning

Picture of marshmellow fluff

Too often, companies hire professional facilitators to support their strategic planning meetings but get nothing more than fluff. Many of these facilitators (under the claim of being a certified and master facilitator) have only a superficial understanding of strategy. They help the meeting produce something – but that something is definitely not strategy. Instead they help expensive executives and managers facilitate the production of fluff statements.

This article is not an attack on the idea of facilitation of meetings. Indeed, many meetings are wasteful and frustrating; and to be clear, a facilitator can be helpful.  However, experience shows that many facilitators push their technique at the expense of strategic thinking.

Mission, Vision, and Values: Is This Simply “Polishing the Doorknobs?”

Statements of mission, vision, and values are important; especially to small businesses. It is a good idea to have written something on paper about mission, vision, and values.  JUST DON”T TELL YOURSELF THAT YOU ARE PRODUCING STRATEGY!

  • A mission tells the organization its purpose
  • A vision establishes a verifiable future
  • A statement of values expresses those aspirations thought to be important.

If you already have a reasonably good statement, don’t let a facilitator waste your time on refreshing or rewriting them. It’s just an exercise in wordsmithing.  This activity is “doorknob polishing;” the doorknob is functional (the statement has been written), but there is not need to make it gleam and impress others.

And, while we’re at it…..

Strategic Plans are Documents – Let’s Hope that We Can Find a Strategy

In the last 3 weeks, I have reviewed three statements of strategy.  Only 1 of the 3 documents actually had something that I would recognize as a strategy.  The other two were just statements of goals and aspirations.  The one good strategy document clearly showed the nature of the business situation and constructed a focused set of guiding actions that would address the business situation. The good strategy was the result of insights that came from thinking strategically.e

Interestingly, the “strategic plan” that was produced by a professional facilitator looked great. However, I could find no strategy. It was attractive and concise, but an exemplar of fluff.  It probably worked fine to for internal alignment, but INTERNAL ALIGNMENT DOES NOT MAKE A DOCUMENT A STRATEGY!

How do I know? If I gave this document to a competitor of the company they would just yawn. If it were truly a good strategy, the reaction would be to mount a counter-response to avoid loss of advantage.  One of the acid tests of a good strategy is simply this: would your competitors be worried if they saw your strategy?

Facilitators and the Myth of High-Energy Meetings

Granted (again) that meetings are frustrating, boring, and wasteful; most of us would prefer entertainment and energy – even fun.  A facilitator that knows lots of good facilitation techniques can create the illusion of progress.  But it is really a dulling of the pain.

Your goal should NOT be to have a high-energy strategic planning meeting. It should be to design a good strategy….one that provides the organizational focus, leverage, investment guidance, and policy guidance.  As I wrote in a prior article, any written statements might be as straightforward as describing the objectives, scope, and advantages.

If you are really interested in creating a strategy that provides your organization a competitive advantage, you need to do the hard work of strategic thinking.

Hard Work – Nice Guys Finish Last

The truth is that strategy (in general) strategic thinking (in particular) is hard work.  Strategic thinking produces insights. This insight generation can be creatively fulfilling and powerful.  In my experience, this requires these essentials:

  • Quiet and undistracted time for individual reflection
  • Facts and data, not just gut feeling and aspirations
  • Listening to others, even if we have to patiently work with those who “think out loud”
  • A tolerance of ambiguity
  • A framework for taking strategic insights and putting them into a strategy

My own experience in facilitating strategy is this: you have to be clear in your own mind what good strategy looks like, and be able to discern it from doorknob polishing fluff.  You have to help your client find insights and knit those insights into a coherent set of activities that positions the organization’s resources in a logical way to meet serious and proximate competitive challenges.

There are thousands of charismatic facilitators who have a confused understanding of strategy as mission, visions, values, goals and the like. Facilitation fluff is common.

Do you agree that facilitation fluff is common and a problem? How have you seen it in practice? Do you agree that strategic thinking and insights needs a subtle and nuanced approach to finding insights and applying them?