This is the fourth post in this thread about finding the starting point for strategic thinking. If we find the starting point, we have a good shot at developing more and better strategic ideas.
We know by now that strategic thinking starts with a question about how to add value over time. It is a type of “ex ante” versus “ex post” thinking.
So how do we manage this “ex ante” thought process? First, a cautionary note. We know that humans are terrible at coping with the future. We do not have good instincts for ex ante thinking. For example, we know that we will get old. Everyone does. And we know that when we get old, we will not be able to work as we did when we are young. We will need some sort of savings to see us through that period. We can only save to prepare for this when we are making income. Moreover, due to interest compounding, the earlier we start saving the more savings we will end up with. And yet we tend not to svae. We tend to over spend. We know what we are doing is stupid on an intellectual level and yet we do it anyway. I rest my case. Humans suck at future thinking.
We can do better if we can more easily visualize the future. But here is the thing. We can’t. We cannot see what tomorrow will bring because it hasn’t happened yet. Indeed, if you think about it, we are walking backwards through life. We see only what is behind us (in the past) and interpret what we have seen to build expectations about the future. Even our perceptions of the present are in fact interpretations based on the past.
The starting point for understanding strategic questioning is simply to accept this limitation. Accept it as the best possible model of reality. Once we accept it, we can start to reflect more systematically about how to improve our modeling. These improvements include making better choices as well as being more flexible in changing direction as the results of our choices become apparent over time.
Here is a good starting point to achieve this. Bob Cialdini wrote a long time ago in his very important book “Influence” that we tend to act in patterns based on commitment and consistency. If we commit to a thing, we tend to act in a manner that is consistent with that commitment — even without thinking about it.
An example — if you commit to making your bed every day, after a while you may notice that you are not doing the dishes. If you commit to doing the dishes as well, you may notice that the vacuum cleaner is gathering dust. And onward. Pretty soon your house will be very clean and tidy. Conversely, if you do not make the bed, you are less likely to notice these things. This is the so called “domino effect”.
This informs us about what types of questions have more strategic value than others. We are looking to start the best possible domino effects. Some questions are more likely than others to trigger positive domino effects. to take us where we want to go.
Keep in mind that as we look for these, we are making a value judgment about the future. We are either deciding that we want to change something about the present, or we are deciding that we want to reinforce something that is already there. We are either “breaking the mold” or “using the mold”-.
The romantic tradition gives us a certain fascination for breaking the mold. We have the notion that this is what creativity is all about. Doing something new seems to be better in itself simply because we did it. That is at the core of romantic thinking. So we have that quaint romantic idea of the “rebel without a cause”. One rebels because one is supposed to rebel.
If you think of this in terms of domino effects, you begin to see that the rebel without a cause will find and commit to all sorts of activities that are consistent with rebelling even if they are meaningless in themselves. So some of us will only buy jeans that are already torn at the knee. Tattoos? Of course! Drinking? Hell yes! And so on.
Let’s take this a step further. Quite a lot of things called “innovation” are in fact just attempts to break molds for no particular reason. To build something new, just because we can. The Segway is a classic example. It is a transportation tool that has had no clear function. So too was the original PC-. Watson was right. There was very little use for it in the home. But Steve Jobs persuaded us that it was cool. We committed to being cool, and so we bought lots and lots of Apples.
Strategically, one can see that this can produce effects, but it is also high risk stuff. Change for the sake of change, even for the sake of being cool, may not lead to much value added. It may, but it doesn’t necessarily do so.
So what about using the mold? If our initial commitment already has value and produces a domino effect, we are likely to be pleasantly surprised at where we end up. We may achieve the original goal as well as many other things that are connected to it.
The key is that the mold has to fall into the category of things we do not want to change. So, for example, Jeff Bezos famously said that Amazon is not interested in what is changing. Amazon is intensely interested in what will NOT change over time. And Amazon believes that people will always want (1) lower prices, (2) greater selection, and (3) faster delivery. And Amazon relentless innovates to give the customer those three things, changing anything and everything that takes them a step down one of those paths. Doing so caused it to invest in enormous computer storage capacity. And that led to an amazingly profitable AWS business. Wow!
but once again, a commitment to using a mold does not guarantee that the mold will offer long term value. We can just as easily get stuck in meaningless routines because of a commitment to a value that offers little opportunity to grow. So Nokia committed to offering cheaper and better mobile phones. No one was better at this. And the routines that Nokia created to take this further blinded the company to the value of the smart phone. They simply couldn’t believe that breaking the mold the way Jobs did with the IPhone would add more value. In that case, it did.
My point here is not to advocate for breaking or using molds as the answer to all strategic problems. It is instead to sharpen our focus on the nature of the strategic choices at hand. Because of the domino effect, any single choice will have multiple effects over time.
So far so good. But how do we direct our focus so that we are more likely to know which starting points will take us farther? How do we know when to break the mold or use the mold? That is next.