You’ve seen it happen, perhaps dozens of times: A company makes some choice that looks good on paper, but leads to major strategic problems. No one is immune to this problem, because good strategic thinking is hard. Why is this? And how can we make strategic thinking easier?
There are three basic reasons why good strategic thinking is hard. They all revolve around the way our brains frame decision making. Thousands of years ago, our ancestors had very real problems that were more important than strategic thinking. All the strategy in the world won’t help you if you’ve been eaten by a lion. Much of our nervous system is finely tuned to this critical survival situation – even though we rarely will encounter such situations.
1. Your brain is looking for a lion, and there is no lion
In addition to being eaten, ancient humans had to do some things regularly to survive. Getting enough food was a constant, serious issue. This led much human behavior to be structured around scarcity, and making sure there was enough to survive.
2. It’s easy to forget that you aren’t starving
Finally, even in modern life, it is easiest to think about things in simple, immediate ways. “You can never be too rich or too thin” suggests that very important things can always be thought of as quantities, and that you always want more. If a few deer are good for hunting, a massive deer population should be even better – except it isn’t. Populations have limits, and very large populations bring problems – like disease – that small populations never have. Likewise, cutting costs leads to higher profit, until it destroys the trust customers have in your brand.
3. It’s easier to always seek more than it is to understand the right amount.
These are not problems that come from too little knowledge, or lack of rigorous thinking. They are problems that come from thinking the way we normally do. Most of the time, our thinking seems sensible because it is either reacting to the world around us, or it is tactical thinking. This kind of thinking often yields great results, in the short term. In strategy, this kind of thinking can lead to disaster.
So, how can we stop thinking this way and think more strategically? Is there a way to ignore a million years of evolution and force our brains to focus on a different approach? The simple answer is yes, but it can be difficult. Here are three simple changes that make strategic thinking easier.
1. Zoom out
To get away from looking for lions in your strategic thinking, back away from the immediate problem. A lion will dominate your thinking when it’s close, but when you are a hundred miles from any lions, you can start to think about how to avoid lions completely. One great way to do thing in business decisions is to ask yourself to play out the effects of your decisions over a very long period of time. Will your choice still have benefits in 10 years? How could it create problems?
2. Look for abundance
Instead of thinking in terms of starvation, strategic thinking should emphasize creating plenty. Let’s say your choice requires more money, for example. Where could that money come from? Why would money flow in to your company to pay for things? In many cases, examining the systems that surround your business decisions can lead to strategic changes that change the game from scarcity to abundance.
3. Find the dichotomy
When examining strategic decisions, you can easily see a bigger picture by finding the limits of your choices. What would happen if the labor cost were zero? How would customers respond to more expensive raw materials at a higher price? Much of our world reflects a balance between two forces – the desire of customers to get the best products and services they can, and the desire of customers to spend as little money as possible. Seeing your decisions as a way to anchor your brand to a point on that continuum will help you avoid some of the disasters that come from a “more is better” approach. The key to this approach is finding where the tension lies in your own markets, and expressing it as a choice between two extremes, like “cheaper or faster” or “convenient or enjoyable”
These are just a few ideas about how to think more strategically in your daily life. If you’d like to learn more about strategic thinking and make strategic thinking easier for your team, attend our 4 hour webinar on Strategic Thinking on September 18, 2020. You’ll be glad you did.