Julia Sloan

Learning to Think Strategically

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IN A NUTSHELL
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CORE CONCEPTS
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HISTORY
♟️
STRATEGIC THINKING
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THINKING TOOLS
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THINKING BIASES
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IN A NUTSHELL

  • “Given that strategy is the number one leadership responsibility, leaders need to be clear about what strategic thinking is and laser focused in applying it with confidence and ease.”
  • As a result, our technical ability to generate vast amounts of data has far surpassed our human ability to convert it into meaningful information. We have to develop a pipeline of great strategic thinkers if we want to stray alive in today’s business environment.
  • “We tend to know intuitively that the more uncertain and unpredictable our strategic environment, the more useless our detailed plans become. Strategic thinking is not about the creation of a static plan but, rather, about setting a dynamic, sustainable thinking process in motion.”
  • “Human capital is the only true competitive global strategic advantage (…) we need to make a long-term business investment in strengthening and expanding the strategic thinking capacity within our organizations.”
  • “If organizations are serious about developing a pipeline of strategic thinkers that can tackle the most complex and unpredictable problems, they must foster a culture that includes strategic thinking.”
  • “All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” — Sun-Tzu, Chinese military strategist
Play Video
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CORE CONCEPTS

📑 WHAT IS STRATEGIC THINKING?
  • “Learning to think strategically is largely an informal, nonlinear, “messy” process that is reliant on a cognitive cluster that is distinctly different than the traditional cognitive cluster emphasized in conventional teaching approaches of strategic planning.”
  • There is a huge difference between strategic thinking, strategic planning and strategic implementation.
  • Strategic thinking challenging the underlying basis of the strategy, it suspends any solutions and focusing on finding the “essence of the strategic problem”.
  • “Strategic thinking is both an ongoing rigorous process and a distinct and critical mindset.”
  • “Strategic thinking is divergent in nature, non-linear, highly intuitive, and emotional, uses critical reflective processes (critical inquiry, critical dialogue, critical thinking, critical reflection), and is iterative, a-rational, and inefficient.”
  • “Strategic thinking is not the by-product of position, precedence, or status. It is not an elitist function. It is learnable.”
  • Strategic thinking is the first link in the strategy chain.
  • It is primarily learned by doing. “We learn the meaning of the actions by performing them, just as we practice riding a bicycle, skiing, or driving a car.”
📑 WHAT IS STRATEGY?
  • “Essentially, its meaning depends on whether we are looking toward the future or back to the past. For those who look into the past, strategy is a repeated pattern on the path to a success; for those who look toward the future, strategy is a broad framework for actions that will culminate in a win.”
  • The wrong approach to strategy: “wanting to “produce” a strategy rather than generate a learning process of sustainable and re-creative capability.”
📑 5 essential attributes of great strategic thinkers
  1. Having a vivid imagination.
  2. Keeping a broad perspective.
  3. Being able to juggle, or attend to competing, incomplete, and inaccurate information all at once.
  4. Dealing with things over which you have no control.
  5. Possessing an adamant and relentless desire to win.
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HISTORICAL CONTEXTS

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Ancient Greek concept of strategy
  • “The Greeks regarded strategic wisdom as oscillating between different positions and perspectives relative to a particular purpose.” —> strategy is flexible, not fixed.
  • Imagine the way the Greeks were travelling. The maps were not complete, constantly evolving, they had the flexibility to modify each part of it. —> This is called “subjective relativism”, which had a significant influence on the ancient Greeks’ concept of strategy.
  • It is different from the modern western worldview of “ascertaining objective knowledge from a detached perspective”. The ancient Greek point of view was more subjective and flexible.
  • “Frameworks and worldviews that influence the conception of strategy can be very different, these differing ways of thinking are not inferior in any way.”
  • The Greeks saw ambiguity and uncertainty as a necessary part of strategy, they didn’t necessarily wanted to eliminate it.
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20th century corporate strategy
  • Based on the idea of “technical rationality” —> employing the achievements of science and technology for humanity’s prosperity; the dominant way of thinking of the industrial era.
  • Technical rationality emerged in the late 19th century at the height of the industrial revolution. It is still the basis of today’s notion of strategy “despite the substantially more complex reality of today’s world.”
  • The emergence of multidivisional corporations -> large investments -> economies of scale ->  creating management hierarchies to coordinate organizational functions.
  • “The knowledge base is specialized, scientific, firmly bounded, and standardized.” (technical rationality)
  • Standardization: the notion of making organizations machine-like. However, when the environment is unstable, ambiguous standardized strategies become too rigid and inflexible.
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SHIFT IN CORPORATE STRATEGY MAKING
  • “In order to be strategically competitive today, leaders must be able to think conceptually, creatively, and to critically re-examine data and perceive information in novel ways. Furthermore, they also need to dramatically shift perspectives, to re-create, and to adapt continually. As I work with business and government leaders across the globe, I notice that leaders are taking particular interest in strategic thinking and are intensely curious about how people learn to think strategically.”
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Contemporary competing views of strategy
  • Based on principles of industrialism.
  • Believes that knowledge is “linear, functional causes of actions” —> you can make detailed plans and execute them.
  • Strategy is separate from organizational action —> thinking is separate from action.
Further reading:
  • 📖 Philip Selznick’s 1957 book, Leadership in Administration
  • 📖 Alfred Chandler’s 1962 volume, Strategy and Structure
  • In real life, managers are far less rational than they are supposed to be. Literature is very different from real life.
  • What really shapes organizations is politics, “history, and human patterns of behavior over time.”
  • “strategy-making problems have no single correct answer – only action that is somewhat better or worse”
  • Mintzberg‘s ideas were adopted by Michael Porter
Further reading:
  • 📖 Henry Mintzberg – Strategy Safari: A Guided Tour Through the Wilds of Strategic Management
  • Design School sees strategy as a process of learning through hypothesis, generation, and revision.
  • Emergent School sees strategy as a process of learning through exploration and discovery.
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THE INCLUSIVE APPROACH: UNITING THE 2 SCHOOLS OF STRATEGY
  • Today’s thinking appears to be moving toward a more integrated and inclusive approach to strategy. (In opposition to the “highly analytic, rational, linear approach that has dominated the field since the modern industrial era of the early 1900s.”)
  • Rather than seeing the 2 strategies in opposition we can unite the
  • Both schools of thought is essential to strategic thinking
  • Strategic thinking as a process gained increasing acceptance.
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Culture’s influence on strategic thinking
  • There is a strong correlation between world views, military and political strategies and board games of nations. For example: compare the Chinese board game Weiqi (also known as Go) with Chess.
  • Chess
    • Focuses on tactics.
    • Way of winning: destruction of a majority of pieces.
    • Zero-sum game (if one party wins the other loses).
  • Weiqi
    • Focuses on interconnectedness.
    • Way of winning: player needs only a slight advantage over his opponent.
    • Non-aggressiveness lead to success: win-win relationship.
  • Transition between its traditional culture and the practices and influences of the modern world.
  • Ancient civilization and also a contemporary great power.
  • Power is granted to it naturally —> status is given, not earned.
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MILITARY INFLUENCE ON STRATEGY
  • A slow change in strategic thinking started to take place between 15th and 19th centuries.
  • Expansion of monetary-based economies —> more bureaucratic systems
  • 17th century: establishment of complex hierarchies —> military leaders became political figures —> Discovery of the “machine”; war became “total” not just between rules but also between nations of people.
  • 19th century: “transformation of military and civilian bureaucracies during this period” —> “march toward a machinist view”:  making human systems more machine-like.
  • King Frederick the Great —> “single mind and will”—> soldiers have to be trained to “ensure a mechanistic response in battle”
  • Chief of the Prussian General Staff Helmuth von Moltke -> “A hierarchical structure, strict discipline, and thinking teams, called General Staffs”
  • Separation of the leader from the action -> armies became less relational and more process-oriented. (This is what’s happening in today’s complex organizations.)
  • 1950: Military analogy became popular within businesses: -> “attack” the competitor, “conquer markets,” “win product wars”, etc.
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TWO COMPETING SCHOOLS OF STRATEGY

DESIGN SCHOOL OF STRATEGY

  • The most influential strategy concept since the 1960s.
  • Beginnings: Philip Selznick’s 1957 book, Leadership in Administration; Alfred Chandler’s 1962 volume, Strategy and Structure
  • Ideas of “distinctive competence” (introduced by Selznick) —> synchronizing an organization’s “internal state” with its “external expectations.” Emergence of SWOT analysis —> identifying the strengths, weaknesses, opportunities, and threats that a company faced in the market —> creating a fit between internal and external factors.
  • Alfred Chandler: strategy has “two specific characteristics: many distinct operating units, managed by a hierarchy of salaried executives.”
  • Ansoff’s and Chandler’s image of organizations: triangle. The“tip-of-the-triangle” -> “Strategy was perceived to be the responsibility of a select cadre of highly educated planners at the tip of the corporate triangle.”

PLANNING SHCOOL OF STRATEGY

  • Strategy is “a rule for making decisions pertaining to a firm’s match to its environment” (Stephen Cummings: Images of Strategy)
  • Beginnings: 1965 Igor Ansoff: Corporate Strategy. “Ansoff identified a gap between increasingly complex business environments and the activities of multi-business firms.”
  • Applying microeconomics to business —> developing hundreds of forecasting and audit-analysis techniques —> trying to control every single internal and external factors of a business.
  • More formal and systematic than the design school —> strategy creating is more like a machine-like method.
  • Scenario-planning: “if the future cannot be totally planned, then by planning several futures we may increase the likelihood that the right one will be selected”
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COMPLEXITY THEORY
  • Change is “apparent random, disparate, and discontinuous”
  • Complex adaptive systems —> “Complexity theory compares the nature of organizations to that of other living organisms”
  • Forecasting the future is impossible, planning ahead is a waste of time.
  • Organizations have the ability to self-organize —> inherently tend toward order rather than randomness, the role of a corporate leader is to create conditions that will allow strategy to emerge.
  • Necessary components of self-organization: decentralization, individual expression, even chaos, creativity, an atmosphere that encourages novel insights, unusual perspectives, contrarian opinions, an abundance of data.
  • Top-down control leads to failure.
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CHAOS THEORY
  • Making order from random data.
  • Edward Lorenz (of MIT)
  • “because the universe is a chaotic and unpredictable place, predicting what is going to happen at any given time or location is nearly impossible, because everything within a given system is ultimately connected”
  • However we can observe patterns that emerge from a large amount of data.
  • Applied to highly complex systems: stock market, ecological systems, biological systems, population growth, and epidemics.
  • The past is a less reliable predictor of the future than previously believed.
  • DANGERS of chaos theory: Extreme reaction to chaos theory: over-analyzing, through incrementalizing, over-planning every detail. Being paralysed: if the future is unprodictable, then why try to plan?
  • BENEFITS of chaos theory: can be relevant in “our current competitive, unpredictable, and inconsistent business environment”.
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STRATEGIC THINKING

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WHY DO WE NEED IT?
  • In highly dynamic competitive environments change is the normal state of things and stability is an exception. Rita McGrath – The End of Competitive Advantage
  • Today’s strategy environment is far too unpredictable, unstable, and uncertain —>   the focus should not be to find the perfect model
  • “The strategy focus must change from the models to the subject of strategy – people.” – strategic thinking researcher Lara Jelenc
Further reading:
  • 📖 Rita Gunther McGrath: The End of Competitive Advantage
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THE SLOAN TRIAD MODEL OF STRATEGY
  • We have to differentiate between STRATEGIC THINKING, STRATEGIC PLANNING, AND STRATEGIC IMPLEMENTATION.
  • Many leaders confuse the strategy-making process with a circle: starting with strategic thinking, then continuing with strategic planning, and finally implementing the strategy that has been planned. However “in our rapidly changing real business life, the process is actually a highly iterative, uneven, back-and-forth, boomerang process.”
Which strategy domain are we focusing on?
  • During the strategy process each domain has to be brought into focus. The leader’s responsibility to determine which domain are we focusing on at a given time.
  • Leaders have to be comfortable with the constant cognitive shifting. Each domain could be in focus for different timescales: “sometimes for a brief meeting and other times for a period of several months”.
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THE DISTINCTION BETWEEN STRATEGIC THINKING AND STRATEGIC PLANNING
  • “The intent of strategic thinking is to suspend problem solving in order to challenge and test for the real problem; while the purpose of strategic planning is to solve the problem.”
  • Strategic thinking not just tried to solve the particular problem. It goes deeper, tries to examine the underlying reasoning behind the problem finding the route cause of the issue, while challenging assumptions that were taken for granted.
  • The cognitive clusters that support strategic thinking and strategic planning are fundamentally different. (One cluster is not superior to the other.)
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5 essential attributes of great strategic thinkers
  1. Having a vivid imagination.
  2. Keeping a broad perspective.
  3. Being able to juggle, or attend to competing, incomplete, and inaccurate information all at once.
  4. Dealing with things over which you have no control.
  5. Possessing an adamant and relentless desire to win.
♟️
THE ROLE OF CULTURE IN STRATEGIC THINKING
“Why can’t I find any good strategic thinkers here?”
  • “In my work with corporate strategists, government policy reformers, and innovative entrepreneurs around the world, I am constantly bombarded with one question: “Why can’t I find any good strategic thinkers here?”
  • Culture is the environment in which we fist learn “specific patterns (…) what to fear, where to attach values.”
  • “The informal learning process required for strategic thinking exists at a level that supersedes culture – socio-national culture, organizational culture, or functional culture.” It means we can find great strategic thinkers everywhere on Earth, regardless of country of origin and socio-national culture. Strategic thinking can be learned and can be thought.
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THINKING TOOLS

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INFORMAL LEARNING
  • Informal learning as the predominant learning approach used to think strategically.
  • Most of the learning occurs outside formal education.
  • Informal learning is spontaneous —> people follow interests as they arise.
  • It mostly takes place in our everyday life, primarily from experience.
  • Informal learning can be: “Self-directed learning, social learning, mentoring, coaching, networking, learning from mistakes trial and error”
  • Strategic thinking is NOT a planning model rather than in a process-based model for learning and creation that occurs informally.
Further reading:
  • 📖 The Rise and Fall of Strategic Planning, Mintzberg
  • 👨‍🏫 Education theorist Peter Jarvis
  • 👨‍🏫 Learning theorists Victoria Marsick and Karen Watkins
  • 👨‍🏫 Learning theorists Peter Jarvis and Jack Mezirow

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THE THREE-STAGE MODEL FOR LEARNING STRATEGIC THINKING
  1. PREPARATION
  2. EXPERIENCE
  3. REEVALUATION
1. PREPARATION STAGE (preparing for action)
  • It has 2 components: Affective component and Cognitive component
  • Affective component: It’s all about emotion. The starting point, passion, conviction, a drive, an urge one cannot disregard.
    Tension is a very important part of strategic thinking. It is rarely the result of an “enjoyable” activity. —> Challenge can be very motivating.
  • Cognitive component
    —> information gathering and data analysis. Generate new possibilities, verify an existing belief, provide new perspective within the framework of making strategy, test other information.
2. EXPERIENCE STAGE
  • We can learn by concretely experiencing something —> Experiential learning.
  • We can also learn by reflecting on our experiences.
THE 4 STAGE LEARNING CYCLE
1. CURRENT EXPERIENCE —> Comes from many areas of life. Helps us frame or make sense of a new situation “in terms that we already know and feel” at the moment.
2. PRIOR SUCCESSFUL LIFE EXPERIENCE —> We can chose a prior successful life experience against which to test our new experience.
3. APPLICATION OF PRIOR EXPERIENCES TO NEW SITUATIONS —> “Assess the gap between what we think we know and what is unknown.” —>  by evaluating the gap we are able to fill that gap.
4. Taking action!
3. REEVALUATION STAGE
  • It is a reflection on the overall experience.
  • It can validate our learning or justify our beliefs. Its purpose is to “check” our learning.
  • Allow us to interpret and re-interpret situations.
  • It is a combination of an ACT-THINK-TALK-THINK-ACT loop.
  • An opportunity to experiment, imagine, refine, decide.
  • “Emotions are vital facilitators to informal learning and they are integral to the reflection process.”
CONCLUSION
  • “By understanding and diligently practicing such a learning cycle, we can develop a sustainable pipeline of strategic thinkers capable of making meaning in the complex, unpredictable, ambivalent, and high-stakes global business environment.”

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P and Q types of learning
  • Term coined by Learning theorist Reginald “Reg” William Revans —> “was an academic professor, administrator and management consultant who pioneered the use of Action learning.” (Wikipedia)
  • P learning correlates to problems of uncertainty, whereas Q learning is equivalent to ambiguous problems that require judgment (learning theorist Karl Weick’s terminology)
P-learning (programmed learning)
  • Programmed learning or knowledge that has been codified in books, lectures, or analytical techniques.
  • “Puzzles,” or problems for which a correct solution exists.
  • Example: finding the best way to reduce the time or cost of some specific manufacturing operation.
Q-learining (“quandaries”)
  • Difficulties or opportunities to which no solution clearly exists.
  • Example: determining the direction a company will take after a merger.
  • Q learning requires to reinterpret the meaning of current decisions, challenge their assumptions, reframe experience.
  • Tools for Q-learning: action-learning programs, future search methods, lateral thinking, scenario planning, and introducing critical dialogue at all levels of the organization.

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The difference between DATA, INFORMATION, KNOWLEDGE AND INSIGHT
DATA —> INFORMATION —> KNOWLEDGE —> INSIGHT
DATA
  • Neutral, static, and meaningless.
INFORMATION
  • Derived from data and is given meaning through the interpretation of facts or statistics.
KNOWLEGDE
  • Information that is interpreted according to our belief system and the meaning it has been given. “The dynamic process that is used to convert information into knowledge is learning.”
INSIGHT
  • “When data, information, and knowledge interact with critical reflective processes (critical inquiry, critical dialogue, critical reflection, critical thinking), the result is INSIGHT.”
  • Insights lead to improved judgement.
  • “The insights generated must be continually challenged and diverged with an expectation that things are constantly changing.” —> “seek out facts that might disconfirm a generally held belief”

EXAMPLE

  • DATA: “A half million American adults living in nine states are not enrolled in any health insurance program.”
  • INFORMATION: “The incomes of these adults rank in the lowest quartile and the states represent the nine poorest states.”
  • KNOWLEDGE: “The insurance business is an industry at fault.”

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“Surf” and “dive” LEARNING DOMAINS
Also referred to as:
  • Single, double, and triple loop learning —> learning theorist Donald Schon
  • Model I and model II —> Edgar Schein
  • Jack Mezirow calls it “instrumental and communicative learning” (based on his Transformative Learning Theory)
“Surf “ learning domain
  • “The surf domain is a metaphor for surfing – the kind of learning that happens on the surface.”
  • Easy to understand, has answers, is instrumental, transactional, and is relatively safe
  • Primarily about determining cause-effect relationships and learning through task-oriented problem solving
  • (However, the complexity of strategic thinking cannot be reduces to a how-to model.)
  • “Surf learning employs “how-to” models and is more effective for strategic planning than for fostering strategic thinking.”
“Dive” learning domain
  • It is a much deeper and more complex level of learning.
  • “Challenging deeply held beliefs and assumptions while critically examining the true nature of a strategic problem.”
  • Dive beneath the surface in order to make meaning of data, information, experiences, and situations
  • Exploring the unfamiliar with no boundaries. It is risky.
  • “Taking a deep-dive requires the reflect critically, ask tough questions, and employ divergent thinking.”
  • “It involves understanding values, ideals, feelings, and normative concepts like freedom, autonomy, love, [and] justice. – learning theorist Jack Mezirow
  • “Including diverse data, points of view, and perspectives in a strategic dialogue is essential to maintaining a competitive strategic edge.”

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CRITICAL REFLECTION
How to reflect on experience and learn from it?
3 kinds of critical reflective processes
  1. CONTENT REFLECTION
  2. PROCESS REFLECTION
  3. PREMISE REFLECTION
CONTENT REFLECTION
  • Content questions focus our thought on the “What?”
  • “Where is the problem occurring? When did this start? How much will an advertising campaign turnaround cost? How much time will it take? What are the key factors to examine?”
PROCESS REFLECTION
  • Thinking about the procedures that led to the problem
  • Process questions push us to examine how we make strategic decisions.
  • “How did the problem come about? How exactly did we get here? How did others do it?”
PREMISE REFLECTION
  • Premise reflection leads us to question the relevance of the problem itself.
  • “Why?” and “What if?” questions
  • “Is market share my real concern? How else could this problem be framed? Is market share the only or the primary indicator of success? Can I control market share? Is market share dominance a valid concept?”

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CRITICAL INQUIRY
“The ability to ask good questions in an environment of risk, constant change, confusion, and uncertainty is a competitive strategic advantage.”
  • Critical inquiry is the art of asking questions that identify and challenge assumptions.
  • Purpose: think deeper, think more divergently, clarify, understand, seek alternatives.
  • Critical inquiry is probably the easiest way to predict patterns and trends. We often get used to a pattern of way of thinking. Asking good questions opens the door for innovation.
Questioning is hard job
  • Challenges our beliefs and assumptions
  • A good question usually leads to more question (divergent thinking).
  • Questioning, coming up with new ideas and generating strategic initiatives become a shared responsibility. It can help to reduce pressure on the leader.
Advices to make asking questions easier
  • Go horizontal! During the strategy meeting suspend all the rules related to hierarchy and role boundaries. “Everyone must be able to inquire of everyone else in order fully to benefit from the dialogue process.”
  • Focus on listening: Questions require us to listen attentively. “Questions require us to listen attentively, which in turn generates a need to reflect. This leads to subsequent questioning that requires more careful listening and reflection, and so a cycle is set into motion.”
What makes a good question?
  • Good questions take courage to ask.
  • Cause us to stretch and squirm.
  • Prompt us to reflect deeply and inspire us to become more insightful.
  • Offered with a caring and sharing intent.
  • Presented as selfless and not asked to “show off” the knowledge or wit of the questioner.
  • Asked with courage and are difficult to answer.
  • Supported with good listening.
  • Followed through with time for critical reflection.
7 dimensions of strategy that can benefit from critical inquiry
“If we genuinely consider “human capital” as a valuable asset, these dimensions are imperative to strategic thinking.”
Outer Ring
1. Finance (economics, budget, profit/loss, investment)
2. Risk assessment (financial security, physical security, intellectual property)
3. Technology (hardware, software, integration)
4. Integrity (authenticity, truth, honesty)
Inner Ring
5. Business value (stakeholder, customers, products, services, expansion, improvement)
6. Individual development (learning as investment, satisfaction, knowledge/ thinking/creative capability)
7. Social contribution (environment, human rights, arts, health, politics, community development)
Further reading:

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Lateral thinking
👨‍🏫 Edward de Bono
  • “Re-structuring the problem and viewing it from multiple perspectives.”
  • “Lateral thinking is both an attitude and a method of using information.” — Edward De Bono
  • It is a powerful tool for expanding perspectives as well as for identifying dominant ideas. Helps us to shift old frames of thinking and see problems from a very different perspective.
The difference between vertical thinking and lateral thinking
  • “nonlinear, a-rational thinking that is concerned with changing patterns. Instead of simply taking a pattern and then developing it, as happens with vertical thinking, LT aims to restructure the pattern by putting things together in a different way”
  • “The ability to suspend judgment is one of the most basic principles of LT.” —> “To arrange information in a way which would never have come about in the normal course of events; to hold an arrangement of information without judging it; and to protect from dismissal an arrangement of information which has already been judged as impossible.” — Edward De Bono, Lateral Thinking
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FORMAL LEARNING
  • Formal learning is helpful in strategic planning but it is not enough for strategic thinking.
  • Courses, models, schools of thought, and theory.
  • “As noted earlier, thinking strategically does not typically happen in meetings or at work – thinking strategically tends to occur informally, outside work, and in a nonlinear manner. (…) Thinking strategically is a considerably more conceptual and complex exercise than rational, sequential, and linear planning.”
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METAPHORIC THINKING
  • Metaphoric thinking is a learning transfer mechanism. It is the ability to transfer knowledge across multiple contexts, time, history, place and people. This is called contextual transfer, which is learnable.
  • “Generally speaking, metaphor is when the perception of something, is something else. In other words, metaphor is a mechanism that makes the unfamiliar, familiar. Metaphor has a strong appeal to our senses – it smells like, or looks like, or feels like something we have already experienced or already know.”
  • It is important to pay attention to and deconstruct patters from non-work contexts. —> Then use that experience as an analogy to work-related contexts.
  • Any successful experiences when you solved a particular kind of problems can be applied to different situations.
  • Experiences can be strikingly different from actual work experiences. However the underlying cognitive mechanism to solve the problem is exactly the same. “Each non-work context provided executives with opportunities to learn framing, reframing, and meaning making in environments that were incomplete, unpredictable, uncontrollable, and demanding – precisely the kinds of environments in which they are charged to develop global business strategy.”
Examples:
Metaphor, analogy, parable, fable, story
  • “For example, experiences in an orchestra rehearsal became a metaphor for the strategic problem of a global financial merger.” “When I lose myself – totally immersed in the orchestra rehearsal – that is when I am “living” my strategy problem about this new merger.” – Swiss financial investor
  • “Debate is war.” or “Debate is a dance.”
3 steps exercise metaphoric thinking
  1. DRAW A PICTURE —> Identify a metaphor that works for the strategy.
  2. DESCRIBE YOUR PROBLEM METAPHORICALLY —> TELL A STORY —> Recognizing how their strategic issue is “like” the one described in the metaphor.
  3. REFLECT —> Pay attention to differences between your metaphor and real life. Play with different scenarios. “How do the factors and players in the metaphor react or respond?” Pay attention to positions, players and outcomes.—> Think about the problem metaphorically.
Further reading:
  • 👨‍🏫 George Lakoff, Mark Johnson, Howard Gardner, Daniel Ariely, Daniel Kahneman, Philip Tetlock
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CRITICAL REFLECTION
  • Critical reflective processes play a key role in learning (according to learning theorist Jack Mezirow).
  • “Critical reflection is one of the essential abilities for transforming experience into learning, and it is utilized in all three stages of the informal learning process.”
  • Simply: “looking back on an action or experience.”
  • Role of reflection: validation of prior learning; justification of out beliefs.
  • “Critical reflection assists in the ability to question presuppositions, routines, and patterns.”
  • “Critically assessing the content, process and premises of our effort to interpret and give meaning to our experiences.”
3 TYPES OF CRITIAL REFLECTION
  1. Content reflection —> content or the description of a problem
  2. Process reflection —> question the problem itself
  3. Premise reflection —> look at the belief systems or meaning schemes on which the problem is founded
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FRAMING (the basics)
  • Categories, patterns of data. Frames are ways of organizing the unlimited complexity of the world.
  • A frame is a belief schema —> a particular perspective a way of seeing the world.
  • Frames are boxes. We put every information on earth into these boxes (preconceptions). Boxes have labels. When we encounter a new information we put the new stimuli into a box with the right label.
  • Frames are more powerful than facts. If a fact does not fit the frame the frame will stay and the information bounces off, labelled as irrational or stupid (according to George Lakoff).
  • Frames are like sunglasses. We all have sunglasses with various colours. We see the world in a different colour through every different glass. Similarly we see the world very differently on the light of our different past experiences, assumptions, interpretations, opinions, beliefs, judgements and stereotypes.
Example of framing a strategic issue:
Sample problem: childhood obesity in the most industrially developed countries.
  • An executive: may frame it as a market potential for new lines of food and clothing.
  • An educator: may frame it as a problem of learning deficits and behavioral disorders.
  • A psychologist: may frame it as a long-term development issue.
  • A scientist: may frame it as a problem as population-growth rate that has outstripped agricultural production.
  • A sociologist: may frame it as a problem as inadequate family and social structures.
  • An economist: may frame the same problem in terms of insufficient purchasing power or the inequitable distribution of agricultural commodities.
2 DIMENSIONS OF FRAMES
  1. HABITS OF MIND —> assumptions of the world, expectations (what will happen), interpretations of experience
  2. POINTS OF VIEW —> opinion, beliefs, feelings, attitudes, judgements, stereotypes
  • These frames are operating most of the time on the unconscious level, we are not aware of them. But they profoundly influence our decisions.
  • If we want to stay competitive in today’s fast changing environment “we must continuously strive to include a broad diversification of frames and points of view regarding all strategic issues”.
  • Frames are shortcuts we use to navigate better and faster in today’s complex world. Without frames understanding each other would be impossible. As Daniel Kahneman explains, using frames, mental models and different kids of preconceptions helps us freeing up an enormous amount of cognitive capacity, allowing us to make complex decisions extremely fast. This way we can navigate in the increasingly complex world.
  • Richard Feynman, Nobel Prize-winning physicist explains how frames we commonly use can help to understand each other:
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4 TYPES OF LEARNING
Concept from learning theorist, Edward Cell
RESPONSE LEARNING
  • “We respond with a prepared set of answers or techniques when handling a specific situation”
  • Using a formula, prescriptive model, or a structured sequence.
  • Used in repetitive situations as a baseline response.
  • But it is not working well in less predictable situations. Strategic thinking cannot be thought and learned by learning a formula.
  • “When confronted with the complex issues involved in strategy, this learning method just doesn’t pass the test.”
SITUATION LEARNING
  • “Involves a change in how we organize our understanding of a situation”
  • We learn how to understand a situation, interpret it and answer accordingly.
TRANS-SITUATION LEARNING
  • “Learning to learn”
  • “How to change our interpretations of a situation”
  • “Identifying and questioning the assumptions and attributions”
  • Some scholars refer to it as “metacognition”.
TRANSCENDENT LEARNING
  • Modify or create whole new concepts
  • This kind of learning is generative, provide new possibilities.
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Transformative Learning Theory
👨‍🏫 By learning theorist Jack Mezirow
  • “When a fundamentally disconfirming experience or disorienting dilemma challenges our frame of reference, we are presented with an opportunity to dive to the deepest levels of learning and draw meaning from the trauma.”
  • This learning is the deepest level learning. It can be a life-changing experience that often results a fully transformed framework or a fundamentally different point of view of seeing the world.
  • Experiencing a catastrophe is no guarantee that we will experience learning“critical reflection, critical inquiry, critical dialogue, and critical thinking are necessary to make new meaning”.
  • “While the experience itself may be frightening, painful, even destructive, it is within the critical reflective learning process that transformation occurs.”
  • A truly transformative experience “put us totally outside of our known zone, well beyond the realm of familiarity and control – so much so that our world feels mangled or turned upside down.”
  • Some experts refer to it as“post-traumatic growth”.
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CRITICAL DIALOG
  • The purpose of an informed strategy dialogue is to stretch the parameters of current thinking, deepen our knowledge base, introduce new data, expand information and ideas, and allow us to listen and think in different ways. —> critical dialog can lead us to new possibilities.
  • Listen openly, suspend judgement and explore.
  • “A good strategic thinking dialogue is informed, risky, and critical.”
  • “Critical dialogue is not necessarily data or fact driven. It can draw from intuition, imagination, and experience and is enriched by deep-dive questions.”
  • “engaging in the critical reflective processes is a highly iterative (i.e., “messy”) process that leads us to a deeper level of thinking”
  • A good critical dialog doesn’t mean endless spewing of pointless garble.
  • Critical dialog is about testing and validating their assumptions.
  • Challenge and conflict is vital and necessary for progress and innovation.
  • “Generally, I find that it tends to take at least six rounds of these questions before executives start to hit on something.”
  • “Good critical dialogue is informed” – partners have the necessary knowledge. HOWEVER, they don’t have the same knowledge base or share the same frames.
  • Learning is construct meaning from data. Critical dialog helps us with that.
A good critical dialogue is risky business
  • It challenges our underlying beliefs (the things we think are “true”). A frequent answer to critical dialogue is defensiveness, when we are trying to protect our beliefs. But deffensiveness leads to same-frame thinking that kills strategic thinking.
  • Can create a sense of uncertainty, vulnerability and lack of control. And conflict and tension is healthy, it leads to novelty and mearningful collaboration.
  • “Creates a natural state of tension and imbalance, a feeling of a lack of control and vulnerability.”
QUESTIONS FOR CRITICAL DIALOGUE
  • Why?
  • Why not?
  • Whose frame?
  • Other frames?
  • Missing frames?
  • What else?
  • Where else?
  • When else?
  • How else?
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LEADERSHIP DEVELOPMENT
Selecting high-potentials for strategic thinking
  • Everyone is capable to be a strategic thinker: “concrete, linear, analytical thinkers can most certainly learn to become more conceptual, critically reflective, intuitive, and a-rational – though they may squeal from time to time. Conceptual, intuitive thinkers can, likewise, learn to become more linear, logical, and rational – though they, too, may squawk at times.”.
What do we need?
  • Information about the strategic thinking process.
  • Opportunities to observe critical dialogue among senior leaders
  • Practice through participation in critical dialogue regarding strategic issues
  • Encouragement to engage in creative endeavors
  • Engagement in the critical reflective processes
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Action learning (AL)
  • Learning and action, learning from experimentation..
  • All AL programs comprise six components: problem, group, questions, action, learning, and coach. — AL expert: Michael Marquardt of George Washington University.
  • Critical thinking (can be a part of AL): “a logical chain of reasoning that is useful to unravel assumptions and to test new frames and ways of thinking.”.
  • Action learning can be a basis of organizational learning..
  • “The more complex a problem is the less valuable expertise and the more valuable diversity.” — AL expert: Michael Marquardt of George Washington University.
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Learning agility
  • “Based on learning from experience and supports learning transfer.”.
  • “learning agility is the ability to learn from experiences and apply those learnings to new situations – learning transfer.” (Lombardo and Eichinger, “High Potentials as High Learners,” 2–5).
2 basic premises of learning agility
  • 1. Profound learning comes from our willingness and ability to learn from experience..
  • 2. Individuals who ultimately failed to meet expectations are characterized by an unwillingness or inability to adapt.
4 characteristics of agile learners
  • Mental agility: View problems from a new point of view in unclear situations
  • People agility: Self-aware, calm under pressure, and treat others productively
  • Change agility: Curious and experimental
  • Results agility: Achieve results in complex situations and inspire others to do the same.
What to do?
  • Seek new challenges. Be open for learning. Seek immediate feedback. Reflect on experience.
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THINKING BIASES OF STRATEGIC THINKERS

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GROUPTHINK
  • Groupthink is a problem of same-frame thinking.
  • When all the people in a group think the same way about a problem, the “corporate way” the way the boss likes, the way we “should” think.
  • It can be a little easier to manage, because everyone tends  to agree on everything. BUT it can be detrimental to strategic thinking. There is no conflict, people are not challenging ideas, not bringing new insight to the table. (For more on groupthink read: Adam Grant: Originals)
  • The danger of groupthink:“(…) people are unwilling to “rock the boat” or take the risk of challenging frames”
  • Individuals with many different divergent frames are a strategic value that can fuel strategic thinking. But just if they are actually willing to take an interpersonal risk to challenge existing beliefs. (For more on this topic, read: Amy Edmondson: The Fearless Organization)
  • “The ability to change a frame of reference is a hallmark of successful strategists; in order to do this, strategists need to be able to shift or shatter perspectives and create new ways of looking at situations.”

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Believing a false frame change
Pseudo frame change
  • “When we believe that a frame change has occurred, but instead, only an illusion of change has been created”
  • “Active participation” or affirmative head nodding in strategy meetings in the name of “loyalty”
  • Hiring “high potentials”, creative thinkers with divergent thinking and multiple types of life experiences  BUT locking them into an existing corporate frame. (Not giving the opportunity to express contrary opinions, micromanaging, wanting them to “master” how things already work in the company, etc…)
Suggestions for frame change within strategic thinking sessions:
  • “Switch off our old habits of mind and to experiment with forming new habits of mind”
  • Invite new members, vary the usual composition of strategy groups regularly to increase exposure to new frames.
  • Create an element of surprise and novelty (eg. change the location of the meeting)
  • Invite provocative conversations and presentations with “outsiders,”
  • Name frames to creating a share vocabulary.
  • Establish interactions with a large variety of people, both experts and non-experts.

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Confusing DEBATE, DISCUSSION and CRITICAL DIALOG
  • DEBATE: purpose: attacking or beating the opponent
  • DISCUSSION: purpose: convincing the other partner
  • CRITICAL DIALOG: purpose: diverge thinking, explore new ideas, as a means to expand and test strategic possibilities
DIALOGUE
  • Originates from the Greek dia and logos:  “meaning flowing through”
  • It is not chatting, arguing, defending points of views;  not talking and persuading. The most important part of the dialogue is listening and learning.
  • “Dialogue is a versatile, dynamic, iterative, and trustworthy process that can be enormously beneficial in a global strategy-making environment of uncertainty, volatility, and unpredictability.”
Dialogue is hard
  • It often requires to “slow down” to have a meaningful dialogue. But it ultimately helps you to “speed up” in the long run.
  • “Within an ego-driven, highp-ressure strategy environment, is that dialogue acknowledges that each person no matter how brilliant or able, still sees the world from a particular perspective, and that there are other credible and legitimate perspectives that can inform that view.”
Quotes on dialogue
  • “Dialogue seeks to have people learn how to think together – not just in the sense of analyzing a shared problem, but in the sense of surfacing fundamental assumptions and gaining insight into why they arise. Dialogue can thus produce an environment where people are consciously participating in the creation of shared meaning.” — William Isaacs – MIT Leadership Center
  • “through the interaction of dialogue, people acknowledge the entirety, not just the utility, of others.” N.M. Dixon – Center for Creative Leadership
DISCUSSION
  • Originates from the Latin discussus: “to investigate by reasoning or argument.”
  • Focuses on problem solving.
  • Uses convergent thinking (sequentially eliminating ideas and reaching a conclusion).
  • Not used for exploring. It is used for analysis.
DEBATE
  • Originates from Latin: de and battuere: “to beat”
  • “a contention by words or arguments; a regulated discussion of a proposition between two matched sides.” Merriam-Webster’s Collegiate Dictionary
  • It is useful to identify weak spots in our thinking and to expose baseline assumptions that need to be challenged.

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PATTERN RECOGNITION
  • “A pattern is a set of cues, which usually appear together, so when we see a few of the cues, automatically, we expect to find the others. In other words, a pattern is any repeatable concept, thought, or image whose repetitions together make up an approach to a problem, a way of looking at things. A pattern is a repeatable sequence of neural activity.”

  • Pattern recognition means using our intuition to complete the missing piece of the picture.
  • Pattern recognition is also about filtering out large amount of unnecessary information to make sense of the situation more easily.
  • “Pattern recognition can take place in a split second and without conscious thought.” We are rarely aware of it.
  • “It is our capacity to see unfamiliar situations as familiar ones and to decide and act in unfamiliar situations as we have done in familiar situations that enables us to bring our past experience to bear on a unique situation.”
Dangers in pattern recognition
  • Patter recognition has to be complemented with analysis. “Our mind tends to make up narratives about the past as a way of making meaning.” (Daniel Kahneman) We are capable of seeing patterns in everything. Even when there is nothing but randomness. (Nassim Nicholas Taleb).
  • “We must judiciously monitor ourselves by making sure we can and do switch off our autopilot from time to time, and deliberately set out to test and challenge the patterns we notice and the meanings we attribute to these patterns.”
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THINKING IN SMALL GROUPS
Restricting the tip of the triangle to a familiar, small same-frame strategy group.
  • Excluding people from meetings and discussions whose frames may be dramatically different and desperately needed for diverging thoughts.
Consequences of same-frame thinking
  • Ignorance of and immunity from opposing data
  • Minimized opportunity for divergent thinking
  • Avoidance of controversial dialogue
  • Blocking unintentional learning
  • Blocking innovation
  • Results conformity of thinking (when expressing contrary views, challenging authority, or testing tradition is punished)
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LIKE-MINDED PEOPLE
2. Surrounding themselves with loyalists and like-minded thinkers.
  • Restricting your advisors and the group of people who are making decisions. Executives tend to do this especially in times of crisis divergent input would be crucial.

HOW TO AVOID?

  • “Shattering frames requires that we are able to challenge and test ourselves, others, and the habits of mind, beliefs, and underlying assumptions that support the traditions of the organization.”
  • “Include as many diverse frames as possible in the early stages of strategy conversations.”
  • In order to challenge them frames have to become visible.
  • Use CRITICAL REFLECTION for shifting and shattering frames.
    “It consists of two interrelated processes: Learning to question and then, reframing or replacing an assumption that is accepted by majority opinion as common sense.”
    Turning off instant pattern recognition, the assumptions based on our prior experience.
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The problem of expertise
  • Experts are like computers, they can scan a large amount of data and make sense of it immediately.
  • “Sometimes we can become so complacent or over-confident about what we think we know that we are caught off guard when the unexpected happens.”
  • “It can blind us and give us a false sense of knowing.”
  • Overconfidence of experts: “with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident.” psychologist Philip Tetlock – 20-year study of expert predictions
  • Non-experts have to be able to challenge experts in a group. (For more on this topic read: Amy Edmondson: Fearless Organization).
  • “Expertise in confronting a strategic problem is much more valuable than expertise in answering the problem.”

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6 traps of strategic thinkers
1. Immediate gratifiers —> These are the people who want results – now!
2. Know-it-alls —> people who make instant judgments, because “know”. They believe their frame because it is the only way they “know.”
3. Experts —> An expert mindset can be a double-edged sword. Expert people make up their minds so quickly that they overlook critical details.
4. Satisfiers —> These people are satisfied and content with the status quo and see no reason to change.
5. Conformists —> When challenge is required, the same-frame thinking of conformists makes the group’s ability to change impossible.
6. Over-simplifiers —> Because we feel overwhelmed, by complex things we deny the actual complexity or strategic problems. The temptation for over-simplification in a chaotic and fast-paced environment is tremendous.

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EXPERT vs. UNINFORMED INTUITION
  • “Our intuitions function like our peripheral vision to keep us oriented and aware of our surroundings. Our analytical abilities, on the other hand, enable us to think precisely. We may believe that everything we think and decide comes from our analytical thinking, the conscious and deliberate arguments we construct in our heads, but that’s because we’re not aware of how our intuitions direct our conscious thought processes.” – intuition expert Gary Klein
  • “Our intuition is based on accumulated and compiled experience.”
  • “”Intuition is a natural “outgrowth” of experience and a vital component of learning to think strategically.”
  • “All human knowledge begins with intuitions. Proceeds thence to concepts and ends with ideas.” — Immanuel Kant (1724–1804), German philosopher”
  • Intuition and analysis is complementary: “Intuition is a balance for analysis and how analysis provides a check for intuition in strategic thinking.”
  • “Good strategic decision makers notice and think while they are in the process of managing complex and highstakes situations – they register subtle cues without even realizing it. Decisions are made subconsciously, before they even begin their analysis.”
  • “Intuition works in an associative manner: Even though it feels effortless and is fast. Rational thinking on the contrary is analytical, requires effort, and is slow. . . . Intuitions get better with a lot of practice – because at the bottom intuition is about the brain’s ability to pick up on certain recurring patterns.” Massimo Pugliucci, philosophy professor, intuition researcher.
  • “the evidence is growing that those who do not or cannot trust their intuitions are less effective decision makers, and that as long as they reject their intuitions, they are destined to remain less effective.” – Intuition researcher Gary Klein – The Power of Intuition
The difference between EXPERT and UNINFORMED intuition
  • “As any strategist knows, there is a big difference between an informed and uninformed gut feeling. We want to avoid impulsive actions and make decisions based on informed intuition.”
  • Expert intuition can be and must be learnt. We are not born with expert intuition.

The end!

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2023