They used data to suppress cognitive bias. The prevailing system in Major League Baseball placed much power in the ability of professional scouts to judge the potential of a prospective player. Most scouts worked intuitively, many of them holding to the illusion that physical appearance is predictive of the player’s ability. Oakland’s strategy included a belief that empiricism was a better predictor of performance than subjective intuition.
• They placed smart bets. A good strategy is a bet or a series of bets. Some bets may pay off, and some may not.
Each of Oakland’s unconventional trades was a bet, testing the idea that a team could measure productivity as a function of payroll expense and configure a productive offense at minimum cost. Many of those resource-configuration bets were failures, but some paid off spectacularly.
The Moneyball strategy itself was a bet that a new dominating idea could prevail. Over time, and with continuous experimentation, Oakland improved its understanding of performance and gained an advantage.
• The strategy was novel. The Moneyball strategy did not emerge from writing statements of mission, vision, and values. The strategy didn’t originate with facilitated organizational retreats, budgeting, and SWOT‡ brainstorming or other so-called best practices of strategic planning.
One lesson of this strategic-thinking narrative is the unique perspective of an individual. Billy Beane was not from an elite educational background (he skipped college to accept a professional baseball contract). His success came from sound principles: he confronted the reality of his situation, he was curious and opportunistic, he developed a unique commonsense, he looked outside of conventions for new ideas, and he leveraged his resources and his know-how.
The Moneyball story is well known. Many writers commonly use it as an example of the potential of technology: big data, data mining, and analytics. The strategic-thinking narrative is an alternative theme, which is that a good strategy’s roots are with individuals who perceive the situation more accurately than others. Good strategy has its origins in the fairly prosaic activities of scanning the environment, noticing curiosities, analyzing with a skeptical eye, deliberating with others on the situation, and designing a path forward. However, it’s also a matter of luck and placing yourself where you can benefit from the emergence of opportunity.
Good strategic thinkers are skeptical of conventional management wisdom, borrow external ideas and innovations, and construct new strategic logics. I regularly hear people who exalt the idea of leadership vision, and cite as examples the genius of Steve Jobs and more contemporary business leaders such as Mary Barra, Elon Musk, and Jeff Bezos. There’s much to admire about these people, but they’re not freaks of nature. They’re not seers who predict the future, nor are they wizards who magically create it. A more accurate story is that they’re reasonably intelligent people who are open to novel ideas, are opportunistic, and focus on the essential actions needed for future success.
The worlds of strategy and leadership have many tropes,§ and it’s important to be skeptical of them. Conventional thinkers prefer neat, compact stories. They like to attribute outcomes to a person’s character or as a supernatural gift of vision. The hard work of analysis and reframing are much better explanations for the sources of good strategic thinking.
You’ll see other examples of strategic thinkers in this book, and I encourage you to search for them in movies, books, and your own life. An individual who holds a nuanced understanding of the situation and is willing to make tough choices about focus is more likely to craft good strategy.
How to Construct a Strategic-Thinking Narrative
The strategic-thinking narrative is a useful tool for understanding the creation of strategy as a competent response to a situation. The idea is straightforward. First, find a real-world example of organizational success or failure. Questions like this can help you identify the main elements:
• Who are the main and supporting characters?
• What is the context for the story?
• What is the core challenge they face?
• What are the tensions?
• What insights did the characters acquire?
• What decisions did they make?
• How did they experiment and adapt?
You can discover a narrative of strategy in every story of success or of failure.
Answers to these questions provide a useful deepening of understanding about the source of the strategy. For example, the Moneyball strategy did not spring into Billy Beane’s mind fully formed. Billy Beane was exposed to sabermetrics ideas years earlier by his predecessor general manager at Oakland, Sandy Alderson. Going back further in time, sabermetrics approaches predated the events in the movie by at least 20 years. If Billy Beane was the father of the Moneyball strategy, Alderson was its grandfather. Bill James, who started writing about baseball statistics in the 1970s, was its great-grandfather. Like many other innovations, much time passes between the initial development of a good idea and that idea’s fully realized benefits.
Are You Strategic?
Many people have been told in their performance reviews, “You need to be more strategic.” With a definite tone of frustration in their voices, they ask, “What do you mean be more strategic?”
The phrase be more strategic likely was not meant to invite the person to participate in developing enterprise strategy. The speaker more likely intended it as an instruction to enlarge one’s perspective, to be less absorbed in their specialized daily work, and to coordinate their efforts with the efforts of others, including sacrificing their personal efficiency to serve the broader interests of the organization.
Strategic things ought to be connected to strategy and not status.
In this sense, a person who is more strategic holds a more systematic view of the organization and its fit with the external environment. She has learned the structures and disciplines that characterize her organization and its context of stakeholders, suppliers, regulators, and the like. With this knowledge, she is able to more adroitly coordinate her activities with others.
As an adjective, the word strategic is often used as a decoration – for example, strategic leadership, strategic plans, strategic decisions, and strategic markets. Mostly, when people use strategic as an adjective, they are signaling their opinion of the importance of the noun being modified. Used this way, the adjective strategic is self-indulgent, and many people use it to advance their personal status within the organization.
Most organizations have too many strategic things, a cacophony of goals and aspirations in competition with each other. The indiscriminate use of the adjective strategic adds to the ambiguity and doesn’t reduce it. Ideally, the adjective strategic should link to the organization’s strategy, and ideally the organization’s strategy should be good and not bad.
Emptying the Mind of Preconceptions
The knowledge and experience that have served you well in the past might anchor you to no-longer-relevant stories and conventions, causing you to neglect new learnings. Your intuition might make you complacent.
Adopt the ideas of Shoshin as a preferred approach to learning to think strategically. Shoshin is the Zen Buddhism concept of encouraging a beginner’s mind, which is a
