By its very nature, Socratic dialogue does this. It transforms the spirit of the conversation from the normal, dreary type of superficial analysis that companies go through nowadays to a full-blooded, back-to-basics debate. It thereby creates a richer picture of the game, breaks all sorts of moulds along the way and produces nuggets of strategic wisdom from deep inside the most reticent minds around the table (which would otherwise never be discovered).
But how do you set such a dialogue in motion, and how do you keep it on track? The answer lies in the nature and structure of the questions. Presented correctly and in the right order, the questions change the conversation within a team, which then changes their minds, which then changes their behaviour and ultimately influences their actions. This is the causal sequence upon which our methodology is based. Interestingly, the nature of this questioning encourages further questioning within the team, in that some of the questions have no complete answers, but instead they demand that the team critically evaluates preconceived perceptions of the company and the business, or game, it is in. These invariably unearth contradictions between what the company is doing and what it should be doing. Bit by bit these contradictions are stripped away until a more accurate representation of the truth is achieved. This is the very foundation of the Socratic method of dialogue.
The Seven Principles
To change strategy you therefore need a highly inclusive conversation amongst people who can implement that change, where the process is based on ordinary but sound common sense. Nobody should lose the thread or be compelled to put their hand up and say: “Why ask that question now?” It all has to flow smoothly and logically. We base the sequence on seven straightforward principles pertaining to strategy:
1 Strategy is direction. Tactics are how to get there.
2 Strategy formulated without first consulting the context will probably end up being bad strategy.
3 Strategy is as much about ruling in potential paths that fit your scope as ruling out others that don’t.
4 Good strategy can be turned into bad strategy by a future change in the context. Scenarios are a way of exploring alternative futures, which might necessitate a change in strategy.
5 Bad tactics can destroy good strategy, but no tactic can rescue bad strategy.
6 Good strategy has a greater chance of being converted into good results if tactics are accompanied by a set of measurable outcomes to which people can aspire.
7 Above all, strategy is about understanding what you do and don’t control, and what is certain and uncertain about the future – and knowing when to change direction to avert unintended, and possibly tragic, consequences.
Principle 1 has already been explained. You have to aim the gun before you fire. Principle 2 is based on a quote by Lee Kwan Yew – the prime minister of Singapore between 1959 and 1990 – that those who don’t learn from history are doomed to repeat it, and his insistence that he preferred to learn from history than through trial and error. Context is very important. In one session we facilitated, a comment was made that most countries learn only from their own mistakes and not from the mistakes made by other countries. So true when we look at history repeating itself around the world. Hence, in the questions we put, we want companies to learn not only from their own experience but from the experience of others as well. A pinch of trial and error can then be added as an extra ingredient!
Principle 3 is based on the fact that we all have specific competencies and limited resources and therefore our playing field has to be clearly defined as to what activities lie inside (and are core) and what lie outside (and are non-core). Principle 4 says that we are all human and even the best-perceived strategy at the time can fail and therefore should be constantly road-tested by reviewing the environment and where it can go.
Principle 5 is so often broken because companies will simply not back new strategies with the level of resources required to make them succeed. The initiative is seen as ‘nice to have’ as opposed to being a crucial link in the company’s evolution. On the flip side of no tactic rescuing bad strategy, think of going on holiday with the destination as strategy and getting there as a tactic. If the destination is bad, getting there quickly will only make the experience worse. Principle 6 explains why we all have budgets, goals, targets, objectives, key performance indicators and scorecards in business, because nothing gets done without measurement of progress.
Principle 7 is last but by no means least. It is a fact that people in power prefer to feel that they are in complete control, but our principle demands acknowledgement that they’re not. They feel that they have exceptional foresight, but our principle asserts that the future is inherently uncertain and unpredictable. Worse still, many CEOs and politicians will simply not change their minds because they see it as a loss of face. Even when it is obvious that they should reconsider, they don’t. Call it emotional unintelligence or myopia due to their personal make-up. Unpleasant facts will not be countenanced. This is in marked contrast to the philosophy put forward by the fox to Socrates when he said, “You have to accept change, and change with it.”
Stubbornness, moreover, can lead to unintended consequences, where the law of tragic choices kicks in. This law says that you should take the least tragic choice to limit the amount of pain involved and perhaps open up other opportunities. What you can’t do is nothing because no decent option immediately presents itself. Think of the choices Socrates had – tragic to say the least. But as the fox so rightly said: “Each path will contain its own string of events and consequences.” Victory can be snatched from the jaws of defeat. If you live on the edge, you will always make mistakes. Learn to retrieve the situation instead of dwelling on failure.
The Ten Questions
These seven principles on strategy underpin our conversation model. We have now developed the model into a series of ten strategic questions through which we steer the participants. As can be seen in the table after the questions, ‘defining the game’ is really the strategic part of the discussion and ‘playing the game’ the tactics and outcomes you wish to achieve.
Defining the Game
1 Context: How has the game in your industry changed, where is it heading and how have you fared as a player?
2 Scope: What is your playing field today, and how do you want to expand (or contract) it in light of the developing context and the resources at your disposal?
3 Players: Who are the players that can most advance or retard your strategy, and how should you handle them in future?
4 Rules: What are the rules of the game that are likely to govern your strategy under all scenarios?
5 Uncertainties: What are the key uncertainties that could have a significant impact on the game and divert your course either positively or negatively?
6 Scenarios: On your gameboard, what are the possible scenarios and where would you position yourself in relation to them now?
Playing the Game
7 SWOT: What are your strengths and weaknesses as a player; and what are the opportunities and threats offered by the game?
8 Options: Within your span of control, what options do you have to improve your current performance and longer-term prospects in the game?
9 Decisions: Which options do you want to turn into decisions right now, and what is the initial action associated with each decision?
10 Outcomes:
