In order to grow your business, sometimes you need to think more strategically. The strategies you used five years ago might not be applicable in today’s business world. In order to learn about how to be more strategic, I spoke to Davide Sola, the author of How to Think Strategically. Sola is a professor of Strategy and Management at ESCP Europe and visiting faculty at Business School in Finland, India and Italy. He is also a Principal at 3H Partners, who work with multinational organisations and governments in Europe, US and Africa. In this brief interview, he talks about how leaders can be more creative, why most people don’t understand business strategy and more.
Dan Schawbel: How can leaders be more creative and think more strategically on a day to day basis?
Davide Sola: Being more creative is not an innate trait. One can enhance it through certain skills and a process. The skills is what I call the Strategic Mind, the process is what I call the strategic thinking process.
A strategic mind has a number of characteristics:
- Has a clear understanding of her own and others’ (ultimate) desired purpose
- Has the ability to see action in the context of systems and in time
- Possess a large repertoire of mental models and ability to use expert intuition to access them and identify the ones fit for purpose
- Being able of creative and imaginative thinking to provide novel solutions, often by borrowing and combining ideas across boundaries and categories (multiple intelligences)
- Recognises the structural biases of our thinking and seeks to manage them
- Facilitates groups in such a way that creates synergy between individual thought processes
The Strategic process is made of several steps:
- Observation. Any Strategy is born out of observations
- Positive ones on unfilled needs (i.e. opportunities) to create something new, that does not exist with potential high value
- Negative ones on things that do not work but if resolved could unlock value
- Core Challenge Identification. Identifying the core challenge involves an in-depth effect-cause-effect process where one:
- First identifies the challenge(s) via root cause analysis
- Then makes sure that this challenge is core: i.e., it causes other effects than the initial observation (positive or negative)
- Concept Idea generation.
- Develop a creative solution to the challenge
- Verbalize and visualize it
- Define what are the key features and the assumptions behind their impact which needs to be validated
- Lean Testing & learning validation
- Construct a minimum viable product of the solution which will allow the testing of the assumptions (value, growth, sustainability)
- Test the “minimum viable product” in the market (internal or external)
- Measure the outcomes and validate the learning
Schawbel: Why are so many people confused about what strategy is and how do you define it?
Sola: Strategy is confusing to most as everyone has their own definition. Some speak about a plan to beat competition, others about some sort of a long-term objectives, some think of a budget… Even seasoned managers and executives often believe that strategy is about setting lots of goals, or devising a perfect plan that the organization should stick to no matter what. Some do a template exercise, filling up pre-formatted charts, or are convinced that strategy boils down to just doing things… This diversity of views and prejudiced ideas can unfortunately be found at all levels of the organization and clearly leads to confusion!
We believe and have tested a much more pragmatic definition: a set of coordinated, sustainable creative actions (a plan) designed to solve one or more core challenges, that create value.
Schawbel: What can a leader do to stop being stuck in their ways and start being more open?
Sola: Leaders who are more open are those on a continuous learning journey. They embrace diversity, seek different ways to look at things, value healthy dialogues, show an ability to entertain different points of view, etc… To be more open also requires the freedom to think differently: if no product, system or structure is considered sacred and that it is OK to think dangerous thoughts out loud, learning is much more likely to happen. Freedom does not mean chaos or anarchy, but people need the time, space and permission to pursue fresh ideas and new thinking.
Leaders should therefore get out of their comfort zone and relentlessly look at themselves with a critical point of view. Some say they should fire themselves on Friday night and try to get re-hired on Monday morning. For instance, Jack Welch in his last years at the helm of GE had developed the concept of dyb.com… As a leader you had to Destroy Your Business and rebuild it leveraging the power of the Internet.
Schawbel: Does real strategic thinking have to come from executives or can everyone voice their opinion?
Sola: We strongly advocate that strategic thinking is the matter of many if not all. Firstly we are a born strategist. From an early age we have learned ways of doing things so that the benefit outweighs the effort. As a child we may have figured out how to get extra pocket money from your grandparents or how to come out on top in playground games. Later in life we may have pursued interests or nurtured relationships where the rewards we experienced were much greater than the time and effort we devoted to them. Trial and error will have led us to keep doing some things and to abandon others, favoring the behaviors which keep bringing rewards – a mark of a good strategy.
Secondly strategy starts with observation; everyone who is open and curious enough should be able to make “positive” observations on unfilled needs (i.e. opportunities) to create something new, that does not exist, with potential high value, or to make “negative” ones on things that do not work but if resolved could unlock value. As a result, everyone is entitled to make potential significant contribution to the elaboration of a strategy.
Last but not least, strategies exclusively born out of executive suites tend to fail in their vast majority, due to a disconnect with the reality of the field.
Schawbel: What is “future proofing” and why is it an important concern?
Sola: “Future proofing” is the ability to anticipate what the future would look like and should always be a concern for any C-level executive. Understanding how current trends or raising signals gradually impact your industry and eventually shape change and define the future of it is paramount to guide you in the right decisions. This has become more true than ever in the past few years as change and level of uncertainty have increased to unexpected heights as a result of a “flattening word”: technology becoming accessible to all and lowering barriers to entry, new players arising from developing countries, business being disrupted by swift and agile newcomers, etc…There is unfortunately no such thing as a crystal ball, especially when uncertainty is not linear with time but instead increases exponentially. We recommend to de-risk your decisions by proceeding through constant lean testing of creative ideas and thorough validation of learning in virtuous cycles. Only doing so will help avoid big mistakes by making smaller ones fast, and keeping you away from big bets sticking to series of iterative small ones.