Strategy is Iterative, There are No Right Answers – Making Strategy Fun Again (Part 3)

 

Why do smart people struggle with strategy? Because smart people are used to having the right answer – and there’s no such thing in strategy. Humbling, no?

Strategy, like Innovation, exists in Aristotle’s World of Contingency – a strange place where things can be ‘other than they are’. This is the Land of Oz, the Rabbit Hole, the Land of Lost Logic, the World Behind the Curtain – pick your metaphor. It’s a place where ‘normal’ rules, conventions, and scientific truths don’t usually apply, or they do for a while & then they stop.

We’re used to Aristotle’s World of Necessity – where there are universal truths, and a bedrock of scientific knowledge. In the World of Necessity, the laws of mathematics, engineering, production physics, OpEx/Lean, finance and accounting and the like apply in a predictable way. We can figure things out following proven recipes like root cause problem solving.  One of my favorite auto manufacturing sayings is ‘Follow the recipe, and you get a Big Mac every time!’

In the World of Contingency, by contrast, you follow the recipe and sometimes you get a cheese quesadilla or a corned beef sandwich or a plate of tofu! What’s true in Innovation is true in Strategy.

Strategy is Iterative

‘We are ignorant armies clashing by night’, said Matthew Arnold. The great military strategist, Carl von Clausewitz described the inevitability of ‘Friction’.  Secretary of Defence, Paul Rumsfeld, baffled journalists with abstruse allusions to ‘known knowns, known unknowns, and unknown unknowns’. What to do?

·       Accept that Strategy (and Innovation) live in the uncertain world of Contingency.

·       Experiment, experiment, experiment – dispel the fog through quick, cheap experiments that shine light on the path. ‘Fail fast, fail forward,’ as the saying goes.

·       I would add ‘and Learn Easy.’  Keep it light and fun – people learn best when they’re laughing.

·       Analyze using the marvelous tools of AI but recognize their limitations.

·       Thereby develop intuition, ‘taste,’ gut feel, and business savvy

Strategy is iteration, strategy is doing and learning. Be humbler and accept you’re in a different world where different laws apply. Be rigorous in your process – insist on clear testable hypotheses based on a deep grasp of your current condition. Insist on rapid feedback loops and visual management so that everybody knows what’s happening. Make problem solving and innovation thinking central to your management system. Engage everybody in improvement.  Provide continual nudges in this direction – celebrate great hypotheses, great experimentation and learning.  Promote your best & brightest learners.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

 

Strategy is Distributive - Making Strategy Fun Again (Part 2)

 

Why do so many other smart people struggle with Strategy?  Because smart people are used to being right – and in Strategy very often there are no ‘right’ answers. There is a suitable direction/aspiration, and a testable winning logic. The rest is distribution & iteration.

So what? Team member apathy is at epidemic levels around the world – and strategy is a big part of the problem.

Strategy is usually a drag, no? Flat, boring & superficial directives from on high prepared by disinterested technocrats, or even worse, by LLMs pretending to be human. No wonder people are disengaged.  What’s wrong with strategy & how do we fix it’? (This is 2^nd article in a series.)

Strategy is Distributive

Strategy is distributed problem solving; each level has to solve discrete problems that are aligned with each other, and with our overall Aspiration.  Each level has to define their ‘hot spots’, assign resources, and run experiments around the key questions of problem solving and/or innovation – (a core element in my books).

Few organizations do this well. Some hope that the AI wave will improve the situation, though I am doubtful (for reasons I’ll explore in upcoming articles).

Common Blockers to Distributive Strategy

Here are some of the many blockers I’ve observed:

1.     Lack of trust – currently spiking because of AI

2.     Lack of alignment or clarity around our core Aspiration. Key enablers: Leadership & the related arts of rhetoric, oratory, and storytelling

3.     Inadequate problem-solving skill – root causes include lack of practice, inadequate systemic ‘nudges,’ overly complex algorithms, absence of mentorship.

4.     Fundamental misunderstandings around continuous improvement vs Innovation – OpEx and Innovation live in different worlds - (see my articles on Aristotle’s ‘two worlds’ formulation)

5.     Organizational inertia – deploying and executing Strategy is usually arduous work with few rewards. Running the business consumes all our time & energy.

I’ve addressed many of these blockers in past articles. Let me briefly discuss blocker # 5 here. Even if we have addressed # 1 to 4, we need to create space for strategic problem solving - physical, financial, temporal, organizational, cultural, emotional and cultural space. This means allocating time, money, leadership and organizational energy. It means senior leader playbacks, Shark Tanks, Improvement Fairs, Hackathons and the like, wherein we observe, challenge, mentor and grow our future leaders. It means aligning HR systems, so our best & brightest problem-solvers & innovators are recognized.  It means engaging the Board in levelling up our reward systems. How many organizations have the vision, will & tenacity to do this?

Strategy is Distributive

In my doodle above, each spiral represents are capable team running rapid experiments in pursuit of some strategic improvement or innovation.  Keep these wheels spinning is the job of leaders. Ensuring the management system enables such work is the job of the Board. In some organizations it all comes together & holds – a thing of beauty not easily forgotten. I’ve experienced this beauty more than a few times, and it keeps you coming back for more.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Strategy is Imagination - Making Strategy Fun Again (Part 1)

 

Strategy can be a drag, no? Flat, boring & superficial directives from on high prepared by disinterested technocrats, or even worse, by LLMs pretending to be human. You’ve probably seen the (dis)engagement data.  If you haven’t, give any AI engine the following prompt: ‘What is the current level of engagement in multinational corporations?’ – and run for cover.

Strategy is a big part of the problem, and over the next several articles, I ask ‘what’s wrong with strategy & how do we fix it’.

Strategy development, deployment & execution should be bracing, exciting and engrossing.  A process wherein you embrace your biggest challenges. Who are we? What are we really trying to accomplish? What are our main blockers & what do we do about them? What management systems and capabilities do we need to build to tackle them?

If such questions don’t engage us, is there any zest, brio or magic left in our working lives?

Strategy is Imagination

Strategy is the domain of the Dreamer, Artist, Hipster and Non-Conformist.  To paraphrase Aristotle, strategy is a place where things can be ‘other than they are’. And yet too often strategy comprises dry analysis performed remotely by disinterested people (or worse, AI) who don’t know or care that much about the business, and certainly not the essential ‘knicks & knacks’ behind a magic piece of hardware, software or service.

Remote technocrats with no skin in the game not only spoil the dish – they drive everybody in the kitchen crazy and eventually turn them off completely.  Hence, the global (dis)engagement scores. I’ve written elsewhere that widely used methods like OKR are prone to this syndrome. What’s the ‘View from the Floor’? Let me quote a team leader in a major bank: ‘Here’s another dumb thing they want us to do.’

Strategy is Storytelling

So, what’s the remedy?  Storytelling – strategy begins and ends there.  A strategy is tale with a beginning, middle and end.  It has a clearly defined shape, internal dramas, peaks & valleys and a hopefully satisfying resolution.  Strategy exists in Aristotle’s ‘World of Contingency’ – a place where things can be ‘other than they are’.  Analysis informs & validates the story, but a human beings shape it, feel it, and commit themselves to it.

There are no ‘new stories’ – researchers around the world agree on this. Some argue for seven basic plots, others cite six emotional arcs, and still others 36 basic dramatic situations. But everyone agrees there are no new story plots, emotional arcs or dramatic situations.

The same is true for strategy. In earlier articles I introduced the ‘Stick’ & most strategies comprise some permutation of its core elements. What makes a strategy compelling is the story.  How well have the strategy leader & team grasped the situation confronting them?  How well have they articulated their aspiration and winning logic?  How deep is their understanding of the conditions that must be true for this to work? How passionate is this team & leader?  Do we trust them to stay the course through the inevitable setbacks, disappointments and unforeseen disasters?

What makes for a great story? Compelling characters and their interaction, meaningful conflict, and emotional resonance.  A great strategy is pitch for the future, full of drama around ‘What Is’ versus ‘What Could Be’.  Great strategies have hooks, crises, heroes & villains, turning points, magical tools, self-realization, and a call to action.  Great strategies, like great pitches, are memorable: they pull you and fire you up.

In summary, strategy is imagination & synthesis. If you can turn your strategic problem into a compelling narrative, you’ve taken the first step towards achievement. More to come.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Succeeding in an AI World (part 3)

 

In earlier articles I introduced the equation V = Q x A to illuminate the leader’s challenge in an AI world. How to harness the AI’s luminous potential while avoiding the disturbing risks? Today I’d like to go a little deeper.

The value of any intervention is a function of its quality and the degree of acceptance.

Business interventions typically entail novelty - a new vision, aspiration, goals & winning logic, or a new process, technology, way of working and/or thinking, or an innovation needed to solve a problem or fill an evolving need.

Value means something the CFO can point to on a P & L, or in the case of Innovation, validated learning toward filling a critical & unfilled customer need in an important market (Innovation Accounting). Quality means things like how clearly we’ve defined our problem & hypothesis, the quality & completeness of our data, depth of causal analysis, degree to which hypotheses, data & causes are validated, quality of reflection & pivots, how effectively the intervention is deployed, communicated, and sustained. Acceptance means do people like it, use it, trust & believe in the intervention – and in you as its sponsor & leader.

AI can be great for Quality but is toxic for Acceptance. The public backlash against AI & Big Tech in general has gone mainstream. Pixar’s Toy Story 5 for example, carries a strong anti-Tech message - the toys lose their jobs to AI. It’s all there, the screen addiction, loneliness, and phoniness of the chatbots. So, even Tech has joined the anti-Tech crusade. The deep-rooted & growing revulsion to Tech in movies, music, journalism and fields, is well documented by culture critic, Ted Gioia, and many others.

So, what are key drivers of Acceptance? Excellence – the excellence of the humans who propose, develop, and deploy the initiative. By excellence I mean integrity, capability, competence, decency, honesty, courage, tenacity, warm-heartedness, experience, and vision. In fact, I am consciously evoking the ancient Greek word arete.

Here’s my rationale: I have experienced multiple business transformations as a manager, engineer, advisor, and director. The common thread in all successful initiatives has been the excellence (arete) of leadership. In other words, leadership is the spark, killer app, and driver. Leadership animates Acceptance and Quality, and ensures the initiative creates Value.

I experienced all this most intensely as a young Toyota manager in the 1990’s. Toyota was expanding around the world and deployed their best & brightest executives and senseis to facilitate this massive & risky investment. Decades later these facilities remain world-beating paragons of Safety, Quality, Delivery & Value. Why did my colleagues & I embrace the Toyota Production System and it’s complex & often counterintuitive methods & mindsets? Excellence – the excellence of our leaders & senseis. We sensed their excellence and did not want to let them down. We trusted them and knew we would do right by them. They had our trust, loyalty, respect, and affection – and for me, they always will.

In summary, our AI interventions are governed by the simple equation above. Most initiatives that focus on Q at the expense of A, fail. Use AI to enhance Q but understand the limiting factor. If A is zero, then so is Value. In future articles I’ll address AI & Q, and Excellence – what is it, how do we grow it, and how do we scale it?

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org