POWER Transcript (PODCAST to follow) :
Will Lowe: Hello. I’m Dr. Will Lowe. This is the first of four podcasts prepared by Professor Power for the RRU Masters in Business Administration online strategy course. Dr. Power’s topic for this podcast: a strategist’s perspective, part A. The content of these podcasts, and a portion of the sessions, are extracts from Professor Power’s forthcoming text, Strategic Management: A Strategist’s Perspective.
Terry Power: Thank you, Will. Let me commence this podcast with a well-known children’s story. Most of you are familiar with the story of the Three Little Pigs, a wonderful and instructive short story that according to pig folklore, is about two male pigs — Matthew and Timothy — and their sister, Jennifer, all with a similar vision: to build a house. Each crafted a different strategy and implemented a supporting action plan to achieve this end.
Matthew and Timothy, retaining their old mental models and reluctant to spend any time researching new technology, chose the easiest and the traditional methods to build their homes — one of straw, and the other of sticks. Most of you would agree that’s a slovenly, languid approach to planning.
Jennifer, on the other hand, was a thoughtful young pig and was moving quickly up the corporate ladder because of her colleagues’ recognition of her critical thinking skills. She was always ready to adopt a strategist’s perspective and new mental models. So she headed for the local library to undertake research into her ecosystem, to include identifying the key success factors, and specifically, threats to pigs’ houses, to include those from big, bad wolves. Having completed a lit review and reflectively reading materials, including a wonderful recent journal article — “Huff-and-Puff-Proof Home Construction” by Will I. Buildit — Jennifer concluded that she would design and build her home out of brick, a wolf-resistant structure.
It was not long before the anticipated threat emerged. The woods’ local big, bad wolf, who had a fondness for the taste of fat little piggies, did not waste time before huffing and puffing and subsequently devouring Matthew and Timothy, two slow-moving pigs. Burp!
Mr. Wolf, after a short respite, decided he still had time and, more importantly, room, to devour one more succulent little morsel. So he happily headed for Jennifer’s abode. Upon arrival, as was his customary practice, he issued his standard bellicose declaration of his arrival: “Let me in. Let me in, or I’ll huff and puff and blow your house down.”
This perceived threat was followed by the quick wit and retort of Jennifer. “Not by the hair of my chinny-chin-chin.”
The wolf, also a strategist, was eager to demonstrate his agility and ability to craft and adapt new, emergent strategies to meet the emerging needs of his new situation. Wolf quickly tried a number of different action plans to procure his nightly snack — alas, without success. Indeed, some independent reports would have you believe that the frustrated wolf actually climbed on to the roof of Jennifer’s brick house and crawled down the chimney, resulting in his demise by landing in a kettle of boiling water strategically placed over a large, roaring fire.
But are these the facts? According to the pigs’ perspective, yes. But are they the facts from the perspective of the wolf? It is important, as a strategist, that the facts of cases and/or issues are viewed from all possible perspectives. Strategists must remove their biases and understand the lenses with which they view the facts before reaching a finding.
The wolf’s recollection of the facts are such that he and his many supporters view, with some degree of amazement, the position most of you are ready to adopt, and that of like-minded woods-circus media, to portray him as a killer and eater of pigs. To commence, most of you have already demonstrated your bias, your willingness to retain your old mental models without an analysis of the facts. Simply by referring to Mr. T. Wolf as the “big, bad wolf,” you have displayed a discriminatory propensity against arriving at a fair and balanced finding — clearly, an indefensible, politically incorrect position.
Surely it is not the fault of Mr. Wolf and his kind that they have been imbued by nature with a taste for cute bunnies, slow-moving sheep and succulent baby pigs. While it may be possible for Mr. Wolf to be found guilty of committing the act of killing pigs — in law we refer to this as actus rea — because of the wolf’s nature, Mr. Wolf did not possess at the time of eating pigs Matthew and Timothy the prerequisite guilty mind — at law referred to as mens rea.
As most of you know, or will come to know from your introductory law courses, without these two elements Mr. Wolf must be found not guilty. Indeed, just as we baby-cow-eating carnivores find McDonald’s Bic Macs cute and slow-moving, a jury of cows might view you as big and bad too.
However, in this case Mr. Wolf offers as a defence that he did not intend to eat pigs Matthew and Timothy. He only knocked and puffed, as was his usual gruff practice, on pigs’ doors to welcome them to the neighbourhood. Regretfully, because of their less-than-well-thought-out strategies and poorly implemented action plans, they had built dangerous and weak structures. These negligently built structures could not withstand the simple knocking and everyday puffing by friendly neighbours. As a direct result, the building collapsed on top of the two little pigs and killed them.
The lessons in this story are, first: cute, dead little pigs found on the floor — what’s a wolf to do? Yummy!
Second: it is critical to the diagnostic process that strategists have a strategic perspective of the facts prior to analysis and a determination of findings.
Often in this class we quote the thoughts of Sun Tzu. “When the thunderclap comes, there is no time to cover the ears.” Over the years much has been written about the initial military campaigns conducted by the German military during the opening years of World War II. The Germans referred to their new form of warfare as blitzkrieg, the lightning war. It was the application of new technology, specifically tanks and aircraft supported by mobile infantry in highly mobile encirclement battles. The success of this new strategic mental model for the conduct of war enabled by technology and fresh, innovative thinking was very much in evidence during the invasion of Poland and the penetration of the Ardennes.
A few opening thoughts. It is important as strategists that we do not wait until we hear the thunderclap but rather that we actively scan our ecosystem for the earliest indication of the bolt of lightning that precedes the thunderclap. The challenges faced by management today have never been greater as a result of our turbulent ecosystem. All of the political, economic, societal, technological and other factors are shifting exponentially in a period I refer to as “the quickening” in one of my earlier publications.
The economic global playing field is being levelled, and like the Allies in the opening days of World War II, faced with new, fast-moving military strategy made possible by new military technology, we too find ourselves not ready. As a manager, you will need to shed your old mental models. You will need to adopt fresh, new, innovative thinking in order to anticipate and lead change within your industry. Public, private and not-for-profit sectors are all subject to this seismic shift.
The first session of the course offers guidance on how to reset your thinking and assist you in adopting a new strategist’s perspective, a perspective that will be at the core of your strategic planning.
First, let me poke the bear, as I’m prone to do. MBA degrees are commodities. Yes, I said “commodities.” So the question becomes: how can you differentiate your degree from similar degrees offered by others globally? How will you obtain a sustainable competitive advantage over others armed with the same qualifications competing in a global workplace? The answer: you need to think differently.
You need to differentiate yourself by adopting new mental models and demonstrating critical thinking about your ecosystem. You must, among other things, be able to transform from a manager to a leader and back as the situation dictates. This session will offer you some guidance on how to achieve this personal stretch objective.
It is critical that you develop the appropriate mindset. Neuroscience informs us that when we are faced with making a decision in the workplace, over 80 percent of the time we will make the same decision we made on earlier occasions when faced with similar facts. We readily cling, without much thought, to our old mental models and our decision processes. This is not to say these decisions are incorrect, but rather to simply underscore the importance that all decisions require our biases removed and that all the facts be considered before rendering a decision.
How many of you jumped to the conclusion that the big, bad wolf was guilty without considering the wolf’s perspective? Guilty he may be, but to conclude a finding before undertaking reflective and critical thought regarding all of the facts and circumstances might well lead to a misdiagnosis of the problem, hence prescribing an ineffective cure.
A strategic mindset is at the core of being an entrepreneur. Businesses that are strategically focused willingly embrace new mental models and are innovative are the businesses that will prosper. This is the mindset that will be critical to you as strategists. This is the mindset that will differentiate you while others remain a commodity.
So then, what is a strategist’s perspective? Strategists will be early adapters of new mental models. Crafting strategies in turbulent times requires strategists to fully reflect on the convergence of both the front page and the business section of the daily media. These stories can no longer be read in isolation. The political, economic, societal, technical and, indeed, cultural shifts reported on the front page must undergo critical reflection as we review the business section. Indeed, we need to identify the impact of these transformational forces on our business at the earliest opportunity.
To lead today you must lean into the wind. You must challenge all. You must constantly test your and others’ hypotheses. In today’s turbulent ecosystem, all about us is vibrating.
Chances are for most of you, your children will never know what a video rental store is, nor will they have to experience the idea of a movie title being out of stock. Today almost every industry is disrupted. Today the print media, for example, is contracting because of the shift to electronic publishing made possible by technology that better aligns with the value propositions demanded by the consumer.
Indeed, not far behind is the traditional radio business model, broadcasting from a station with a tower and constrained by the conditions of government licensing authorities. We are now commencing to see their industry fragmented as aggressive competitors emerge with timely online publications and niche music stations. These new media folks, of course, have no regulatory bodies to constrain their endeavours, and few barriers to entry. How long will Sirius Radio survive?
The question for the strategist is how you bring some stability to your firm’s world. We are at a strategic inflection point, a node where power and strategic advantage are joined at this particular point in time. Recall Churchill’s observation prior to World War II. “The era of procrastination, of half-measures, of soothing and baffled expedience, of delays, is coming to a close. In its place we are entering a period of consequences.” Are you ready?
Globalization was touted as the vehicle to stimulate economic development and address political and social problems. In many ways it has. Clearly, Canada is better off economically because of globalization. Unfortunately, it seems to many others that the promise has fallen short.
In many countries the clash of civilizations and the pragmatic economics have presented greater threats to social and political stability. The world today for the strategist is about potentialities, processes and relationships and less about specific locations and solid things.
Causal change appears to us as linear, but the reality is that each of us is part of a whole system. We are inter-related and interactive. Our changing world, by analogy, is similar to a spiderweb, where one tug on one of the lines distorts and impacts the whole web. As a result of globalization, we are in a web-like connection. We are rubbing up against each other.
The major question becomes for the strategist: how do you plan to accommodate this increasing tension and competition in your planning? There will be consequences emerging from the strategies you implement. A strategist’s perspective requires you to connect to this related and interconnected changing world rather than clinging to your own small, fixed views.
Some things never get old. The lessons learned in the Socratic academy 2,400 years ago are at the core of a strategist’s perspective. You will spend time daily with smart people who will talk about most important issues. Strategists will listen to each other, ask Socratic questions and not be consumed by the need to shout out their position, but rather to participate in dialogue collectively and, as a result, grow wiser.
It also includes the ability to carry on meaningful conversations that balance inquiry and advocacy, where people expose their own thinking effectively and make that thinking open to the influence of others.
Challenge everything boldly. Poke the bear. Peel the onion. Test all hypotheses respectfully. In essence, be prepared to adopt new mental models based on evidence, not rhetoric.
Many of you are feeling stressed, feel you can’t do this. Here’s some motivational advice from Harry Potter in the film Order of the Phoenix. “Working hard is important, but there is something that matters even more: believing in yourself.” Think of it this way. Every great wizard — strategist — in history has started out as nothing more than what you are now: students. If they can do it, why not you? You can do this.
Before we examine a number of somewhat related sets of thoughts, notions and concepts that will assist us in resetting our perspective, the strategist needs to think critically. What follows are extracts from Power’s Case Study Analysis and Writer’s Handbook regarding critical thinking and the process.
Within the first few days of arriving at school you will be asked by your instructors to think critically about certain issues, problems and readings. However, seldom will the instruction be provided as to how to undertake this task. The definition of critical thinking, as stated by the Foundation for Critical Thinking, is: “A mode of thinking about any subject, content or problem in which the thinker improves the quality of his or her thinking by skilfully taking charge of the structure inherent in thinking and imposes intellectual standards upon them.”
To me, I would offer the definition that the essence of critical thinking and reflective thought is for you to arrive at an analyzed perspective by evaluating the author’s arguments and uncovering the author’s key assumptions and testing of hypotheses. To do this with clear eyes, you will need to understand your personal mental models of reading, thinking and learning.
Do you have an inquiring mind that raises questions, tests your assumptions and results in the weighing of the validity of the author’s evidence? Remember, neuroscience tells us that 80 percent of the time, you will generally respond to decisions as you have done in the past. From today forward, I challenge you to question every decision you make and to understand why you have made it. Often, this will require a new mental model. I want you to be self-aware, curious, and an independent thinker.
Recognize that the biases acquired over your lifetime have shaped your old mental models. Be prepared to view the new, emerging issues with new lenses so you can provide a fair and balanced determination of the evidence.
Let me briefly share an old war story with you. In 1956 I had just joined the Canadian military and was on parade, being inspected by Major-General John M. Rockingham. Part of the presentation included the firing of four artillery pieces — blank rounds. Each piece had three men adjacent to the gun and one lone soldier 40 paces to the rear, standing smartly at attention.
During the course of the inspection the general noticed this anomaly and asked about the purpose of the lone soldier behind each gun, as these soldiers seemed to play no role in the firing exercise. As no one was able to respond satisfactorily to the question, the chief warrant officer agreed to solve the mystery. The answer was uncovered in an old military training manual from World War I. It was still being used. The manual established that gun drills required three men on the guns and one man 40 feet to the rear to hold the horses.
It had been some time since the Canadian military had stopped using horses to tow artillery, but the old mental model remained.
I want you to poke the bear and challenge, with respect, your colleagues, instructors, with evidence-based positions, not rhetoric. In most cases there are no wrong or right answers. However, it is only through Socratic dialogue that you’ll obtain sufficient data and information to feel comfortable and enable you to defend your position.
I want you to peel the onion, to look for the second level of meaning in statements. For example, if you read the American newspapers, it seems clear on the surface why America is in Iraq: democracy. Is that true?
I want you to use the words ‘critical’ and ‘criticize’ in the sense that they were used by the Greeks: kritikos, experts who were considered qualified to comment, question, analyze or make sense of something. Critical thinking is not negative thinking. It is the process of attempting to understand, at the very core, the foundations of the argument, and forming some conclusions as to the validity of those foundations.
Undertake the following five steps when you’re asked to critically think about an issue, a problem or a reading.
Step 1. What is the issue, the question to be examined? You will find it helpful to use one of the doodling tools we will discuss in a few moments when we open our little red toolbox.
Step 2. What data and information is provided by the author to support answers to the questions or issues you are examining?
Step 3. Evaluate the robustness, the quality of the evidence provided by the author about the question or the issue compared to the robustness of the evidence from your own research. Satisfy your acceptance or rejection of the evidence by the author. Look for biases in the presentation of information about the question or issue. What basic assumptions are made? Are the assumptions and the materials fair and balanced? Finally, examine and understand the spin provided by the author to frame the provided information about the question or issue.
Step 4. Analyze the data by asking the “so what” questions. Dig below the surface of the facts by asking a series of so-what questions. For example: surface level fact: our competitor is opening a factory in China. Second-level meaning: so what? Well, labour in China is less expensive than our labour. So what? Our competitor’s cost base will go down. So what? Our competitor will be able to make a product for less than we can. You keep on going. As a strategist you must peel the onion to uncover deeper, second-level meanings of the facts.
The final step, step 5. Having reflected and undertaken critical thought about the issue, you are now in a position to set out your findings.
Here are some selected new mental models required by strategists. First, how do strategists shape their reality? According to Peter Senge’s best-seller The Fifth Discipline: The Art and Practice of the Learning Organization, strategists shape their reality through systems thinking, by continuously seeking personal mastery, by demonstrating a willingness to adopt new mental models, by exhibiting the ability to build a shared vision within their organization. Finally, they promote and champion team-based learning organizations. These attributes must be acquired by you as part of a strategist’s perspective.
The essence of systemic thinking is the ability to think conceptually with the right brain. It is the ability to see inter-relationships as a whole rather than linear, cause-and-effect chains. The industrial age mental models for the most part focused on the parts of an organization rather than the whole. As a result, organizations often implement short-term improvements without fully understanding at the macro level the long-term outcomes for the entity.
A good tool for systems thinking is to develop a systems map. A systems map is a diagram showing the key elements of the system and how they are interconnected. The role of the left brain and right brain in the conceptual age will be discussed in a few moments.
Personal mastery is about growth and balance. It is about a calling, a passion. It is about going about your day-to-day tasks not for the accolades but for the satisfaction of a job well done. Strategists must continually clarify, fine-tune and deepen their personal vision. They must focus their energy. Martin Luther King referred to this as keeping your eye on the prize.
Strategists must develop patience and strive for objectivity in all that they do. It is about seeing the reality objectively.
Mental models are the decision-making frameworks that we apply when presented with a situation that requires us to make decisions. These models are deeply ingrained assumptions, generalizations or pictures and images that influence how we understand the world and how we take action.
Senge says to start with turning the mirror inward and learn to unearth our internal pictures of the world. Bring them to the surface and hold them there rigorously to scrutinize.
It will be critical for strategists within their organizations to make the ground fertile for the adoption of new mental models. It means leading change within your organization so as to encourage your colleagues to actively test their hypotheses and existing mental models and discard those that no longer apply.
This is tough work. It will require all of the team to learn new skills, to have meaningful conversations in an honest, transparent and safe environment that will transcend internal politics and other barriers to change found in most organizations.
To build a shared vision, strategists must understand the importance of harnessing the competencies of all within the organization in order to focus on the end game. I want you to think as a strategist of people within your organization as iron filings that have been randomly dropped on a white piece of paper. They are scattered on the page, all pointing in different directions, each with their own environment, working hard to achieve the objectives as they perceive them to be.
As a strategist, you must provide the magnet. You must introduce that energy to pull and align all of the filings in one direction. This can be done with a mantra. More about this mental model when we discuss leadership in subsequent sessions.
Team learning is about harnessing the energy of personal mastery, of accepting a shared vision, of nurturing the capacity of team members and aligning their competencies to the task at hand. When team dialogue is accompanied by systems thinking, then complex and deep-seated structural issues can best be addressed. Team learning takes place within learning organizations where people are nurtured and continually expand their capacity to achieve their goals and objectives in support of their long-term vision. It is similar to W. Edwards Deming’s notion of total quality management. In learning organizations, people must continue to learn how to learn together in order to discover new mental models.
Do you have a Plato or Aristotle bias? Imagine for a moment a continuum with a pole on the left representing extremely strong collectivist views: one for all, all for one. A view where all possible social safety nets are provided by the state, where the state collects revenues — taxes — required to provide for its citizens from birth to death. Here you’ll find the thoughts of Mao Zedong, Vladimir Lenin, Karl Marx, and others promoting some form of political theory of Plato.
At the other end of the continuum is the political theory of Aristotle. Individuals take priority over the state. Less tax is a good thing. At this pole one would find the thoughts of John Stuart Mill, David Ricardo, Adam Smith and John Wayne.
Neither of the pole positions is necessarily a bad thing — remember, no wrong or right positions. Most of us find ourselves generally somewhere on the continuum closer to the centre. What is important for a strategist is that we recognize that we have this inherent bias either to lean towards the political theory of Plato or that of Aristotle. Having acknowledged our bias, we must ensure that it is not permitted to skew our decisions.
Indeed, this tension between the two political theory poles is exceptionally well presented in a free PBS video entitled Commanding Heights. If you see the course site, you’ll find a link. View it when you get a moment.
Old strategic management concepts, notions and models. The reemergence of globalization in the early ’80s has precipitated more economic integration than can be found in the recorded history of humanity. In almost every field our institutions, infrastructure and protocols are racing to catch up with this exponential economic transformation. The need for international law, global accounting standards, global environmental standards and other regulatory infrastructure leaves regulators struggling to align their perspectives with the global economic realities.
Today managers and leaders need to seek out and adopt new management models in order to accommodate the emerging challenges in their global disruptive ecosystem. Unfortunately, today many business schools continue to teach dated strategic management concepts and models.
Most of today’s management concepts and notions were crafted in large part to meet the challenges presented during the industrial revolution. Manufacturing was at its heyday. The reality today, of course, is that developed nations like Canada and the United States are over 75 percent service-based economies. Regretfully, today’s strategic management practitioners continue to focus on how to manufacture widgets more efficiently and effectively.
Brilliant scientific managers like Frederick Winslow Taylor in 1890 spent considerable time studying how management might cope with the prevailing perception of the worker at that time. Taylor’s view of labourers was: “Hardly a competent workman can be found who does not devote a considerable amount of time to studying just how slowly he can work and still convince his employer that he is going at a good pace.” Taylor’s observation speaks to the challenges faced by the early strategists.
At the core of their business model and theory, strategists focused on how to implement efficient and effective command and control systems for workers. In Taylor’s book in 1911, Principles of Scientific Management, he states: “Brutally speaking, a scheme does not ask any initiative of any man. We do not care for his initiative.” Clearly, the employee, to Taylor and others who followed, was a robotic android perspective.
Alfred Sloan, decades later in the 1920s, also an engineer, was responsible for the outstanding growth of General Motors to the preeminent position in the early 1990s. He decentralized General Motors, but his teaching also in large measure focused on the industrial age challenges of manufacturing widgets. This focus of the employee as a cog in the manufacturing process peaked in the 1960s and 1970s with strategic management practitioners like Peter Drucker and Marvin Bower.
These concepts, notions and models crafted between 1880 and 1970 addressed the challenges of the revolutionary economic change between 1750 and 1850 introduced by the industrial revolution. They still represent the core teaching of business schools. Specifically, training continues to focus on very explicit manufacturing problems. How does management get the workers and plant infrastructure to replicate perfectly, as advocated by Deming; increase the scale of operations; and continually grow efficiently?
Let me hasten to add that this is not to say that these old, 20th century mental models are obsolete, only that as strategists we need to review them critically for their relevance, given today’s reality in predominantly a knowledge-based service nation, globalization technology, democratization of workers and other shaping factors.
If this is true, what are the new strategic notions, concepts and models for the 21st century? How can you differentiate yourself?
Let me share a story that might help. I come from a well-established Irish heritage and might be permitted, at the risk of transgressing political correctness, share a story of Paddy, who, upon leaving the pub, is seen on his hands and knees underneath the local pub’s light standard by Constable O’Reilly. O’Reilly says, “Paddy, me son, what are ya down there lookin’ for?”
Paddy replies, “I’m lookin’ for my keys, offither.”
“Did you lose ’em there?” O’Reilly responded.
“No, offither. I thought I lost ’em over there,” pointing to the dark, open space away from the light.
O’Reilly, somewhat confused, then asked: “Why, then, Paddy, would ya be lookin’ for yer keys here under the light?”
Paddy paused and looked up with a twinkling Irish eye, and said: “Offither, this is where the light is!”
Like Paddy, strategists continue to craft and implement strategies as they have for 150 years — under the light. Yet increasingly, there are synapses of light in the darkness revealing to us new strategic mental models. To lead your organization, it is necessary for you to scan the ecosystem looking for these synapses of light in the darkness to show you the way.
The balance of this session will provide you some insight into commencing your journey.
Will Lowe: You have been listening to Professor Power speaking today on the need for strategists to develop a strategist’s perspective.
