Doubting our plans

Most things written by academics about strategy fall into the two broad categories of strategic planning and strategic execution.

It seems that the academics have not been speaking to people outside their institutions enough. 

John Lennon probably had a clearer view of how things really work when he sang, “Life is what happens to you while you’re busy making other plans.”

Nobody sees the future like they believe they do. Ask Nassim Nicholas Taleb or Daniel Kahneman.

All we can do is hypothesise and test those hypotheses as Jim Clarke describes in his work on Business Plan You.

Doubting that our plan will work is the first step towards thinking about the future as it is likely to play out. 

Beyond planning and executing to testing hypothesise

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Two ways forward

There are at least two ways to plan and get things done. 

One way is to plot.

That is breaking everything that needs to get done into smaller and smaller pieces and then manage your way towards the outcome. 

The other way is to be ready.

When opportunities arise grab them, when they don’t arise sit back and wait for opportunities to arise.

Both ways need you to know, at a high level, where you would like to get to.

The first so you can plot the steps and the second so that you know which opportunities to grab.

In 1998, author Richard Rumelt (Good Strategy / Bad Strategy) met with Steve Jobs and pointing out that having only one computer would consign Apple to a niche that they would never be able to escape from, Rummelt asked Jobs, ‘What is your long term strategy?’

Jobs didn’t attack his argument. Instead he smiled and said ‘I’m going to wait for the next big thing’

Steve Jobs - I'm going to wait for the next big thing

 

 

 

 

 

 

 

 

 

 

 

 

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The limitation of experts

Whenever we spend too much time looking for an expert. When we have an expectation that someone out there knows the subject so deeply that they will be able to advise us to make the right decision. When this happens, we are in danger of making a poor decision. 

The number of experts in the world has increased in proportion with our ability to communicate easily. Some ‘experts’ even offer courses on how to be experts. Others put themselves out as guides to the world of experts, the meta experts who help you navigate the experts. All in all we are awash with experts on any topic we can imagine.

Perhaps the growth of experts is in line with the amount of information available to us. The world appears more complex with data on just about every topic imaginable starting at wikipedia and spreading through portals, blogs, Linkedin and Twitter. Decisions appear a lot harder with so many choices. It is natural to want to find guides to help us navigate.

Unfortunately the expert guides do not have a good track record of getting their decisions right. University of Pennsylvania psychologist Philip Tetlock interviewed 284 experts  who are paid for offering advice about political and economic trends. He gathered more than 80,000 predictions over 20 years. The outcome was that these paid experts performed worse when compared to assigning equal probabilities to each of their predictions. This very serious study on the success of experts in politics and economics confirms the numerous instances where monkeys throwing darts beat professional money managers (see Forbes and Toronto’s Globe and Mail for two examples).

Listening to an expert who has spent time studying a particular area is useful. Making a decision based on the decision they would make is not. At the end of the day we are left with ourselves and our decisions. The experts provide context, we have to live with our own decisions. 

All those in favour of delagting decisions shrug your shoulders

 

 

 

 

 

 

 

 

 

 

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Looking for answers is a poor substitute for good questions

For the past seven years I have  taught a course on strategic thinking to students at the University of Cape Town. I ended up doing this by accident.

Prof John Simpson, well known for starting and leading the UCT Unilever Institute of Strategic Marketing was the previous convenor of the course and asked me to help him out after a guest lecture I did on the changes we were navigating in our startup bank.

With the Prof’s wanting to focus on the Unilever Institute after his retirement, I took over the convening of the course a few years later.

I was intrigued to bring together my business experience of strategy and the academic world of strategy. I started on a steep learning curve attempting to create an environment where final year Business Science students could think more strategically about the business world that lay ahead. 

The students come predominantly from a finance background (60%) which is roughly split in half between those aiming to become CA’s and those not. The next biggest segment is marketers and then actuaries, organisational psychologists and a handful of people majoring in technology.

I quickly identified three significant challenges that I faced in teaching the class.

  1. Students adopt a strategy of getting to the other side of exams with as many marks and as little work as possible.
  2. The text books are more suited to academics than to preparing students to be strategic thinkers.
  3. The education system encourages the finding of ‘right answers’ over asking useful questions. 
The first item is a possibly a universal given for any student.
 
The second I addressed by replacing a single text book with selected readings from contemporary journals and books covering a wide range of topics related to thinking strategically. 
 
The third I decided to take on as a challenge which still engages me.
 
My experience of working in my own business and working with many large and small organisations over the past 25 years has confirmed that there are few easy answers in the world of strategy. Leaders who are seeking a single answer to a strategic challenge are possibly naive or missing the point.
 
The problem with strategy, is that we do not know how the future will play out and despite our best guesses, plans or budgets, to think otherwise is irrational. 

So rather than look for an answer to this dilemma, a good question offers many nuances that are useful to our thinking process. Open and insightful, a question which challenges our thinking can lead us on a much more useful thought process than spending our time trying to find the single correct answer.

While a question is the start of this process,  an answer often signals to us that we have reached the end and can stop looking.  This finality, while tempting, can be fatal for a business person on the way up or at the pinnacle of success.

Questions and answers are of course linked. However we need to resist jumping to answers before we have spent enough time on the question. 

Anyone who has tried to implement the suggestions in a business advice book will confirm there are no model answers in business.

We have more chance of success by getting clear on the question. By refining it and polishing it and allowing ourselves the indulgence of thinking deeply over a period of time, new possibilities can open up. 

In a world with all information available to mostly everyone all the time, the opportunity for eureka moments is long gone.

Our challenge comes in navigating information, making connections, synthesising and integrating. A good question is a great pilot for this navigation. 

And to my students frustrated by the lack of clearly defined answers in the world of strategic thinking, here are some questions.

How can you engage in the practice of strategic thinking?  

How have the answers you have arrived at been tested by insightful questions? 

And, isn’t there something else you may have missed?

Questions are more powerful than answers

 

 

 

 

 

 

 

 

 

 

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Insiders and outsiders

So right up front I need to declare my bias. Some of my work entails working with executive teams to figure out better strategies for their future. I have a vested interest in, and believe it makes sense to involve outsiders when wanting to think about the future in a different way.

On Friday Clem Sunter and I were chatting after his annual guest lecture to our Strategic Thinking students. We exchanged stories about how so often our clients work backwards from their expected outcome. Limiting themselves to what they believe is possible, they then describe their future. While tweaks are often considered, it takes great courage to turn hours of interesting talk into an implemented strategy that changes course for the better. 

Scenario planning provides a rich vantage point from which to look at the future, especially when change is required. This is what is exciting about the work Clem and I do. The real power of scenarios is however when they cause a stirring of emotions that compel people to think and act in a better way. We agreed that a rational argument alone is not good enough to cause change to happen.

While many of us consider ourselves to be rational, a quick glance through the hundreds of biases that are affecting us all the time, should raise some doubt as to how rational we really are. Our emotions play a much bigger role in our decision making than we would like to think.

This is why a group of business people on a particular mission benefit from having an outsider in their midst. The outsider can do many things they cannot. One of these is to question the very assumptions on which their business future is built. We are often emotionally attached to our existing ideas and only an outsider can cause us to feel uncomfortable enough to think differently. 

This is hard for insiders to do themselves. Here are three reasons why.

  1. Often it is the leaders vision that is being followed. As Daniel Kahneman describes in his interview with Charlie Rose (see video below or follow this link), leaders like the idea of rationality but resist implementing it. None of us like our views scrutinised and this is even more so if we have climbed to the highest levels in an organisation. 
  2. Insiders are also vested in the activities that have built their business thus far. ‘That’s not the way we do it around here’, is cliched but we hear it often in various guises when asking about alternative futures that haven’t as yet been considered. 
  3. The third reason is that there is an element of risk in doing things differently. Sometimes to keep going with what we know, even though we are aware of the flaws, is easier than venturing out into a new area. Comfort zone or sunk cost bias perhaps?

Outsiders can help identify a new direction and new ways of implementing. Even though the really hard work of moving in that direction is left to the insiders, without identifying what is possible, we are more likely to remain with the known.

To break out of the tried and tested we need to ask outsiders into our inner circles.

 

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Closed questions

Will I find this career fulfilling?

Is this the right person to marry?

Should we do the deal or not?

These are all good questions, but limited. 

Shifting them from closed questions to open questions ramps up their power many times. 

What elements will make my career fulfilling?

What will being married to this person be like?

How does this deal fit into our overall strategy?

If the answers to our questions are limited to yes or no then we probably have defined them too narrowly.

Rewriting the big questions to provide more than a yes or a no opens us up to many more options.

Shifting a question from closed to open can open up a world of possibilities

 http://dthin.gs/YEz06r

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What I want to be when I grow up

Was Woody Allen right in wishing to start life in an old age home, then commence work with a gold watch and finish it when he’s young enough to enjoy his retirement which involves becoming a kid, playing a lot and eventually ending life with an orgasm?

Maybe all those years spent as a kid thinking about what I would be when I grew up was the wrong time of my life to be asking those question.

Perhaps it makes more sense to ask as an adult, what did I do as a child that really excited me? Ignited my passion. Floated my boat.

As I kid I was dreaming about a future I knew nothing about. 

As an adult, I can dream of actual days that I have lived as a child.  

Days when I knew I was in the zone, doing what I loved, making a difference and loving life. Time passed effortlessly, I was both focused and felt free, my energy soared  

Maybe answers to the future lie in the past.

As Woody Allen said, it would be more fun to live life backwards.

 

That full Woody Allen quote about living his life backwards is: 

“In my next life I want to live my life backwards. You start out dead and get that out of the way. Then you wake up in an old people’s home feeling better every day. You get kicked out for being too healthy, go collect your pension, and then when you start work, you get a gold watch and a party on your first day. You work for 40 years until you’re young enough to enjoy your retirement. You party, drink alcohol, and are generally promiscuous, then you are ready for high school. You then go to primary school, you become a kid, you play. You have no responsibilities, you become a baby until you are born. And then you spend your last 9 months floating in luxurious spa-like conditions with central heating and room service on tap, larger quarters every day and then Voila! You finish off as an orgasm!” 

Perhaps it makes sense to ask as an adult, what did I do as a child that really excited me? Ignited my passion. Floated my boat.

 http://bit.ly/17sA1SQ 

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How many moves ahead?

Garry Kasparov the famous chess grand master was once asked how many moves ahead he was able to see.

He answered that he could not necessarily “see” the game many moves ahead. 

In fact he said, “a player looking eight moves ahead [faces] as many possible games as there are stars in the galaxy.” ( collision detection

And he concluded that grand masters are really only concerned with the next move and making sure it is the best one.

We can apply the same thinking to our business or life strategies.

It’s useful to look far into the distance and dream, but it is the next move that really counts. 

Kasparov concluded that grand masters are really only concerned with the next move and making sure it was the best one.

 http://bit.ly/XvsJfF

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Looking back to learn

Looking forward is useful. It can however be a distraction from a hard look at our current strategies.

Our current strategies are best evaluated reflectively by looking back at their origin. What made a lot of sense in the past may no longer apply. My response to events in the past may be ill suited today. The emotional reaction to a previous experience probably made more sense then than now. Yesterday’s solution may be irrelevant.

Pushing forward without a candid look at where our strategies originated can lock us into a limiting pattern.

Reflecting with a view of the future gives me the most chance of success.

Reflecting with a view of the future gives me the most chance of success.

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I only need 1%

Many budding entrepreneurs base their business strategies on the premise that, “The market it worth gazillions and all I need is 1% of that to have a viable business.”

If only it were so simple.

Most businesses will fail with this approach.  Markets are built by people who have worked hard for each percentage that they hold. They do not give up percentages without a fight.

If it was easy,  there would already be five other businesses grabbing their 1%.

Existing players have lots of experience operating in their market. A new business will take months and years to get to know customer needs and supplier capabilities in the same way.

Thinking about taking 1% of the market is not strategic.

What is strategic is deciding why and how you will get your share of the market starting with the first 1%.

Getting 1% of the market is easier said than done

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