ROTMAN
Magazine
Point
of View: Andrew Atkins & Jay Cone
IN
OUR WORK, we are often asked to improve the strategic thinking
capabilities of a company’s leaders. Defining what a client means by ‘more
strategic’ can be an intriguing and revealing exercise, because the variations
between definitions say a lot about the assumptions and biases people bring to
strategy.
To get
a sense of what strategic thinking looks like in action, we often ask leaders to
name a gifted strategic thinker and to describe what makes them gifted. The usual
suspects emerge; among them, Steve Jobs,
for his singular design vision and the turnaround he engineered at Apple;
Gandhi,
for his lasting effect on change movements for generations based on the success
of civil disobedience; and Oprah Winfrey for
her ability to leverage her brand across a wide spectrum of media platforms from television and films to
publishing.
While
each of these individuals may indeed be or have been a gifted strategic thinker, our understanding of what people mean
by strategic thinking suffers from a focus on outputs
over inputs.
What this exercise makes clear is that we are good at identifying strategic
outcomes; what we aren’t as good at is identifying how the strategic work gets
done.
We
believe that while strategic outcomes may be extraordinary and impressive, the
inherent thought processes that lead to them are straightforward.
Fundamentally, strategic thinking involves answering three basic questions, and,
as indicated in Figure One, the order of those questions matters—a
lot!
1.
Where are we?
2.
Where do we want to go?
3. How
do we get there?
It’s a
bit like the phrase, ‘Ready! Aim! Fire!’: the questions start by prompting us
to take stock of our current situation; then we look at our desired future
state. Starting with these two questions is essential, or we will fall into the
all-to-common trap of taking action without a clear sense of purpose. Imagine, “Ready! Fire! Fire!” Only after
having defined a starting and end point are we prepared to chart our path.
Collaborative
work ‘inside the arrow’ — the ‘How do we get there?’ part — involves three
overlapping and iterative conversations that help to
bridge the gap between our current situation and the desired future state:
THE PERSPECTIVE CYCLE. In the first
conversation, we gather and organize information.
THE INSIGHT CYCLE. In the second
conversation, we develop a theory of what’s going on.
THE OPPORTUNITY CYCLE. Finally, we
develop and test options.
As indicated in Figure Two, each of these steps is an iterative cycle of dialogue with
stakeholders involving two key strategic thinking skills: Systems Thinking and
Design Thinking. Let’s take a closer look at the process in detail.
First up is the Perspective Cycle, which involves scanning the environment for information and then organizing that
information into patterns. In scanning, we are actively engaged with our
environment and stakeholders at the periphery of our organization. We may track
specific types of information to monitor trends, and we keep ourselves open to
unexpected information that may provide clues to an emerging trend or issue.
Pattern recognition helps us organize individual data points into a
coherent picture. In this state we are sense making and looking for connections
that have meaning to us. It’s useful to bear in mind that our expectations and
operating assumptions can exert a powerful influence on what data we attend to
and what connections we readily make. Counteracting
this ‘confirmation bias’ is one of the great benefits of working
collaboratively, because accommodating diverse perspectives will often cause us
to look at our own perspective with fresh eyes.
Next up is the Insight Cycle, which involves building theories
to explain the patterns we’ve discerned in the
Perspective Cycle. Developing and refining those theories often requires a reframing of our understanding to
accommodate evolving insights as we share our theories with stakeholders. In this stage we are creating hypotheses
about how the world works, and these hypotheses are limited by the constraints we
believe are at play. When we reframe, we consciously challenge one or more of
the constraints or assumptions to help us shift our perspective. Even if the
specific constraint still pertains, the shift in perspective often serves to
prompt fresh thinking and opens new opportunities for exploration during the
Opportunity Cycle.
As shown in Figure Two, the overlap
between the Perspective and Insight Cycles is the realm of Systems Thinking. As we move from scanning to patterning to
theory building and reframing, we are moving from attending to individual
events to noticing patterns and then to discerning underlying structures that
drive the patterns and events. With
Systems Thinking, we are focusing on the connections between data elements and
recognizing that meaning lies in these connections. This focus on the whole
rather than the parts is a central part of our understanding of what it means to
be strategic. It’s literally seeing the forest and not just the trees.
Furthermore, we are influencing the system through the perspective and insight
conversations to build legitimacy for our strategic conclusions.
Finally, we can proceed to the Opportunity
Cycle, which involves envisioning the possible while we investigate the actual. Envisioning
continues the work we started in reframing by encouraging us to generate new
possibilities or scenarios. Investigating may include prototyping a new
process or business as a way of learning our way forward into the new strategy.
The options we identify through envisioning raise questions about near term
choices. Investigating allows us to conduct experiments that will stretch our
understanding of our options. We will be more flexible and responsive to changes
in the environment through persistent investigating.
As shown in Figure Two, the overlap
between the Insight and Opportunity Cycles is the realm of Design Thinking. As a discipline, Design Thinking focuses on
generating innovative answers to situations that people are motivated to
change. We think of innovation as creativity put to productive use. At the
intersection of Insight and Opportunity, we’re translating the possible into the practical.
In 2011, IDEO’s Peter Coughlin and Seattle University’s systems
thinking expert Colleen Porto gave a joint presentation at the annual Systems Thinking in Action
conference, where they proposed an integrated view of Systems Thinking and
Design Thinking. They showed that the processes are similar in that they are
both ways of building understanding of your environment. However, maintaining their
separate areas of focus allows us to tap into the power that each discipline
contributes to strategic thinking.
The gifted strategists we listed earlier were undoubtedly successful,
but none of them achieved their success alone.
Great strategic thinkers and great leaders are distinguished not by
their ability to single-handedly come up with answers, but by their ability to
spark collaborative activity by asking questions. The leaders we listed worked
with an extensive network of collaborators to achieve their success. They
recognized that people bring differing skills and perspectives to the dialogue and
that tapping into a diverse group improves the quality of the work and
increases the legitimacy of the process and outcomes.
When you engage collaboratively, you can improve the quality of
your group’s strategic thinking by asking powerful questions. To get a sense of
your own strengths and preferences, take the self-assessment on page 114. These
two dozen questions will provide an indication of which thinking skills are
your strengths, and where you will benefit from involving others to balance out
your weaknesses. Following are a few questions under each thinking skill to get
you started.
Thinking Skill #1: Scanning
• What kind of data or information might help you understand this
situation?
• Do you have enough data to focus your effort? If not, what data
do you believe is missing?
• Who in your organization has regular contact with your customers,
competitors, suppliers and strategic partners? What are their observations
about the changing environment?
Thinking Skill #2: Patterning
• In what categories or ‘buckets’ does information seem to be
falling?
• What themes are emerging as you explore this situation?
• What behaviours, actions, or outcomes have happened in a regular
or repetitive fashion?
• What seems to be the most pertinent information on the table at
the moment?
• In what ways are the variables that affect your business changing?
Which are becoming more important? Which
are becoming less important?
Thinking Skill #3: Building Theories
• What explains the patterns you’re seeing?
• What are some conclusions that others have drawn or solutions
others have tried? What unusual or surprising solutions have you seen?
• What hunches do you have about what is actually happening, causing
things to happen, or likely to happen?
• What hypothesis is emerging? What hypotheses have you heard
others express?
Thinking Skill #4: Re-framing
• You’ve heard others describe the problem or situation. How do you understand the problem or
solution?
• What assumptions underlie the description or your understanding?
• How would the understanding change if you altered one or more
assumptions?
• What would be the consequences of looking at the issue in a
different way?
Thinking Skill #5: Envisioning
• Picture a person or place that is related to the topic at hand.
• Picture what this person/people is/are doing or saying now with
regard to this issue.
• Picture a successful application or demonstration of your idea.
• Build a story about the future based on your theories about
emerging trends. How does the story you created differ from carrying the status
quo into the future?
Thinking Skill #6: Investigating
• How did you arrive at that conclusion?
• Imagining this plan of action is implemented success-fully, what
are the systems implications? Might there be unintended consequences?
• Who are the stakeholders that will be impacted and what is your
strategy for working with them?
• What criteria should we use to assess the merits of our picture
of the future?
• What question does our picture of the future raise?
• How might you design an experiment to help you assess the
plausibility of the picture of the future you created?
In closing
The six strategic thinking skills embedded in the Perception, Insight
and Opportunity Cycles are simple and commonly practiced, but often go
unnoticed when people engage in strategy work. Being aware of these skills and
developing conscious competence in them will make you much more confident and
capable in charting a path forward for your organization.
Andrew
Atkins is the Chief Innovation Officer at Interaction Associates, based
in Boston, Massachusetts. His clients include Merck Serono, Tory Burch, and GE.
Jay
Cone is a senior consultant at Interaction Associates. His clients include TJX, GE and Dell.
