weak signals. The strategist then practices sensemaking and synthesis, resulting in a set of beliefs about the situation. The second phase is the structured back end. It’s here that the strategist identifies a core challenge, the dominating ideas of strategy, and makes strategic decisions. The third phase involves programming. It is the application of resources and methods to address that core challenge. This chapter introduces the microskills of high-quality questions and abductive reasoning.
Chapter 7 (Pockets of the Future) introduces the idea that you can find weak signals in the present that have significant implications for the future. Things that we presently consider curiosities can become dominant in future systems. You will find useful the three horizons framework for describing the dynamics of qualitative change in future systems. This chapter introduces the microskill of anticipation. Strategic thinkers must be oriented toward the future and consider their anticipatory assumptions.
Both Chapter 8 (Strategic Decisions) and Chapter 9 (The Spark of Insight) feature the strategic-thinking narrative of Lou Gerstner and his time as CEO of IBM, when he led the company’s turnaround and transformation. Chapter 8 explains the criteria for strategic decisions and tactical decisions, using Gerstner’s decision to keep IBM together as an example of a strategic decision. The chapter also provides another example of written strategy using the five-part model similar to that provided in Chapter 2. Insights are the secret sauce of strategy, and Chapter 9 unpacks its mechanisms. The chapter introduces the microskill of reframing and suggests techniques for increasing the quantity and quality of insights.
CHAPTER 1
Are You Strategic?
An Introduction to the Nature, Purpose, and Scope of Strategic Thinking
The most important thing is to find out what is the most important thing.
— Shunryu Suzuki
Q: What is one characteristic of strategy that is essential to understand, yet is mostly overlooked, even by expert strategists?
A: Ambiguity
THE LATIN ROOTS of the word ambiguity suggest wandering, uncertainty, and multiple meanings. An example of ambiguity is found in Figure 1-1, a graphic that many know as “the young lady and the old lady.” It is one of many examples of a quaint form of graphic design known as pictorial ambiguity. Some people can only see the old lady, and some can only see the young lady. (Hints: The young lady is looking away from you, and the old lady is looking downward. The young lady’s chin is the tip of the old lady’s nose.) It takes an effort to resolve ambiguity.
Another example of ambiguity is multiple definitions of words. For example, the three-letter words run and set have meanings that can only be understood by placing the words in sentences or paragraphs. The word strategy itself is ambiguous. Many people define its meaning in partial ways: as the opposite of a tactic, as another name for a goal, as the steps to reach a goal, as a process tied to the organization’s calendar, as a plan, as a methodology, etc.
Figure 1-1. An example of pictorial ambiguity. Can you see the two faces?
Ambiguity is inherent to strategy. From an entrepreneur’s perspective, ambiguity is the source of opportunity and competitive advantage. An example is a young Steve Jobs visiting Xerox Corporation’s Palo Alto lab in California There, he was shown prototypes of the now familiar computer mouse and graphical interface. Recognizing the potential of the technology, Jobs incorporated the ideas into Apple’s new line of computers.
People get signals from all directions but don’t know whether to ignore them or to attach great significance to them. Is the data in the government’s report on the economy a signal that a trend is starting or ending? Is a new technology going to fizzle or disrupt? Are the signals a threat, an opportunity, or both? Will the new CEO use the same approach as she used at her previous company?
Sometimes people take time from their busy lives to consider questions like those just posed. However, most people find it more comfortable to pay attention to those things that are simple, immediate, and unambiguous. Stated differently, most individuals (managers and executives included) cope with ambiguity by neglecting it most of the time. The reason for the neglect is obvious: ambiguity mentally taxes a person. Consider your reaction to Figure 1-1. If you’re like most, once you saw one of the faces, you allowed your attention to shift to something else.
Returning to the Steve Jobs example, the top Xerox executives in headquarters could have chosen to exploit these inventions but instead focused on their existing operations. They didn’t see the potential. Maybe the Xerox executives only saw one of the faces in Figure 1-1, and Jobs saw both?
Volatility, uncertainty, complexity, and ambiguity (VUCA) is a common framework used to describe the indeterminant and dynamic nature of strategic situations. (You can learn more about VUCA in Appendix A.) The strategist must consider VUCA and be able to distinguish it from conventional, goal-oriented planning.
One technique for resolving ambiguity is the straightforward practice of defining terms. Accordingly, I must next explain the meanings of two essential concepts of strategic thinking, which are the words competence and strategy.
Competence
This book’s big idea is that individuals are the sole practitioners of strategic thinking, and each person practices it in a way that can be judged as competent or not. Competent individuals have the capacity and ability to understand a situation and act reasonably. Let’s unpack the three main components.
Competent individuals have the capacity and ability to understand a situation and act reasonably.
Individual capacity. Stating the obvious, individuals are unique. Each person has her life experiences, formal education, and own stylistic approach to dealing with people and situations. People vary in the degree to which they are curious, analytical, open-minded, creative, and disciplined. Strategic thinking is a habit of mind, a mental stance reflecting the individual’s perspective.
Competent strategic thinking is a personal characteristic that is independent of a person’s rank in an organization. This is an empowering concept where every person in the organization can develop their habits of mind and contribute in small and large ways to the organization’s strategy and operations.
The obstacles to competent strategic thinking are generally twofold: the individual’s natural inclinations for mental ease coupled with the smothering effects of the prevailing culture. The neglect of ambiguity is one example of mental ease. Organizational culture is a powerful force for the status quo and a restraining force for individual initiative. It takes considerable effort to overcome orthodoxy, dogma, and mediocrity. Any individual who shows herself contrary to the norms might be subject to teasing,
