Games Foxes Play. Clem Sunter
their minds. They never make their minds up!
These last two approaches to strategy are obviously wrong. The right approach can be summed up in the following diagram, which hopefully hits home:
However, there is one thing that’s incorrect about this diagram, which is very difficult to represent on paper. When looking at the future, you’re always shooting at a moving target. The dynamics can change just like that. So ahead of pulling the trigger or releasing the bowstring, it is essential to play the game of what if. Not to be paralysed into inaction, we stress, but to adapt if necessary and maybe take one or two of the what ifs out of play with a pre-emptive strategy. Seasoned sea captains – or sea dogs as they were called in Elizabethan times – recognised the benefit of this method by considering the following kinds of questions before embarking on an ocean voyage:
What if one of our ports of call falls into the hands of our enemies?
What if key members of the crew fall ill or die?
What if unfavourable weather conditions play havoc with our schedule?
What if conditions at our final destination are too hostile?
Notice that the what ifs were all relevant. They weren’t vague anxieties inviting the retort ‘so what?’ The captains didn’t necessarily have the answers before they set sail. But they were mentally prepared for surprises. It was part of the ‘ready’ phase to consider possibilities of having to readjust the ‘aim’ (strategy) or ‘fire’ (tactics) in the event of unfortunate scenarios.
Alas, many forms of strategic thinking popular today assume that the future can be represented by a fixed straight line. It’s a sign of the control we think we have over the environment. One such model can be depicted like this:
Context ends means resources implementation and control. No crooked thoughts in here! No options.
Now just play the scenario of going into a restaurant and asking for a menu. The waiter brings it over but it only has one item on it. You complain there’s no choice. He retorts: “Ah, but the chef guarantees that the dish is better cooked this year than last year.” You would not be satisfied. Yet this is precisely how companies using a linear model discuss the future. How can we do the same thing better?
We prefer to think of the future as a cone of uncertainty that opens up over time – the further away from the present moment you are, the greater the degree of uncertainty.
In terms of planning, therefore, a short-term strategy of say six months to a year is quite easy to develop with a budget and a set of measurable outcomes in place to monitor progress. The decisions are in fact more tactical than strategic, more about the practical means of getting there than the end in itself.
By contrast, as the cone of uncertainty expands over time, long-term strategy demands more flexibility and imagination. You may even have to question the purpose of the mission, as well as the means of accomplishing it. This is clear for two reasons: the further away the future is from the present, the greater the degree of uncertainty it entails; and the more numerous are the factors beyond your control. This explains why many CEOs would rather be measured on the success of their short-term tactics than their long-term strategies. They want to make sure of next year’s bonus in case they have to bow out. Such a corporate planning environment does not encourage the long-term viability of companies. As each CEO goes through the revolving door and the new one is ushered in, the strategy changes. This has spawned a whole new field of ‘change management’ techniques served up as instant remedies to organisations perpetually in a crisis mode. Yet the crisis originated in short-term strategies wholly at odds with each other, and wholly at odds with creating sustainable growth in the long run.
Generally, businesses operating within more developed markets should find it easier to change strategic direction because they employ more sophisticated planning techniques and have the resources to do so. Furthermore, it could be argued that in these more developed markets there is less uncertainty, because the conditions are more established than those in developing countries where the challenges are greater and strategic decisions taken by businesses are therefore more courageous. But it actually turns out to be the other way round. CEOs in the West completely misread the tea leaves in the arrogant belief that they can shape the future their way, whereas their Third World colleagues interpret the patterns before drinking the tea. The cup is their ‘cone of uncertainty’.
Amazing, too, are the number of Western books on leadership which focus solely on charisma and inspiration. Leadership is also about picking the right strategy. There’s no point in marching your troops over the hill, however inspired they may be, if it’s the wrong hill. So if as a leader you don’t have a strong sense of direction, choose a strategist (or scout) who has. On the one hand, he may save you from abominable decisions which lead you down the precipitate path to failure. On the other hand, he may discover the best way to the top in the most unlikely of circumstances.
It may be true that improved technological know-how and access to information make it easier for modern businesses to temper external forces and to ride out inclement economic conditions. Yet, the move from an industrial to a knowledge economy, together with globalisation, has seen a huge increase in complexity. Markets are more restless, businesses are more decentralised, decision-making is more diffuse. As businesses widen their influence on the environment, so they are able to influence the environment of the other players in their vicinity. Hence the perception that a company is a self-sufficient island cut off from its competitors is erroneous. Actually, a new form of uncertainty brought about by the interconnected nature of business is emerging, where remote causes way outside of our control and springing from an unknown place on the other side of the world can have major consequences for strategy. Damage control means including those two words: what if? They are essential to get a feel for the interconnected complexities that impact on strategy and its execution – in other words, the curved balls the enemy or the environment can throw at you to really mess things up. Imagination, uncertainty, painting relevant scenarios and juggling with options should therefore become second nature to us. We need to understand the full measure of choice, as it underpins our decision-making process.
So, we’re asking you to break out of your traditional planning habits. And, if you are willing to be a bit of a rebel, the secret to dealing with the future and planning for extraordinary times lies in conversation.
The power of the spoken word
Speak to me pretty, speak to me nice;
Quote me those wonderful phrases, once or twice.
BRENDA LEE
The true nature of communication lies not in the grammatical structure and content of the text but in its intended (sender) and interpreted (receiver) meaning. In conversations, it is sometimes something that is not said that says it all. Emotions and opinions can just as easily be transmitted through bodily behaviour: a shrug of the shoulders, a nod of the head, a smile or a frown. Nonetheless, an emotionally laden conversation that is not properly managed can leave unresolved issues that will threaten the stability of any agreement and the sustainability of any relationship. In a strategic conversation, such unresolved issues could undermine the integrity of the entire process and derail it. Hence, the secret to managing such a conversation lies in the careful examination of its context and the social dynamics between the people having it. This can only be achieved once each participant in the conversation has an idea of the possible sources of ignorance and misunderstanding that could filter out the true meaning of elements in the conversation. In business, particularly, any conversation around strategy runs the risk of not achieving its desired outcome if a clear picture of the interests of the participants and the business model they’re using is not achieved. Not only does this hinder alignment, but it also leaves strategic value on the table.
So, how is it possible to interpret the course of a conversation correctly and