Strategic Intuition Meets Personal Strategy

In his introductory course on business strategy, London Business School Professor Dominic Holder outlines two basic approaches to strategic thinking:  deliberate and emergent.  The deliberate approach can be applied when the overall goal and methods are clear.  In these cases, companies are in the position to develop step-by-step tactical plans.  The ocean is calm, the sailing is smooth, and the skies are clear. Unfortunately–or fortunately depending on your perspective–this is not always the case.  Companies and people often find themselves in a deep fog.  As Senator Olympia Snow once said (approximately), the fog can be so thick that you cannot see the facts in front of your face.  In these cases, a deliberate strategy can easily lead you onto the rocks.  Rather, our strategy should emerge as more facts present themselves.

Traditionally, people associate “strategy” with the deliberate kind.  Strategists are seen as puppet masters, “ahead of the game.”  Think of the team leader and head strategist of the A-Team, Hannibal Smith, when he confidently states, “I love it when a plan comes together.”  He could simply see the future (at least on TV).  No one pictures Gary Kasparov immersed in fog as sits down to play a game of chess–calculation, yes, fog, no.  After all, what is more clear than than a game of chess.  The only unknowns in chess are your opponents moves, and the moves are overt.

However, even in chess strategy must adapt as the game develops.  To date, this form of emergent strategic thinking has not been fully appreciated. It is often viewed as the “he’s making it up as he goes along” strategy, which is really no strategy at all.  On closer look however, this is not the case.  A sound understanding of emergent strategic thinking is crucial.  Professor William Duggan at Columbia University Business School explores the topic in his course (and book) Napoleons’ Glance, albeit with a different framework.  Napoleon was one of the greatest military strategists of all time.  His catastrophic blunder in Russia and eventual demise and often obscure his undeniable success as a battlefield strategist.  What constitutes a “win” in any war is debatable.  Napoleon himself is credited as saying, “The only victories which leave no regret are those which are gained over ignorance.”  That said, he is generally believed to have lost fewer than 5 battles while he won over 40.  This is a tremendous record given the fog that is war.

Duggan has investigated the source of Napoleons’ battlefield success and determined that is was rooted in his opportunistic approach. Napoleon would probe and wait, probe and wait, until he saw a clear opportunity.  He would then strike with full and often merciless, force.  The general goal was to win the war, but the actual tactical implementation was based on the opportunities that presented themselves.  With his march to Moscow, he abandoned this approach with disastrous consequences.  This concept is applicable outside the theater of war, and Duggan ably demonstrates how it applies to Bill Gates, the founders of Google, the pioneers of women’s suffrage and others.

Herminia Ibarra applies this type of thinking to career strategy in her book Working Identity with excellent results.  Often, career counseling has been presented as a series of steps.

Step 1, determine who you are (personality tests are required)

Step 2, determine where you want to work (many informational interviews are required)

Step 3, latch on to a specific target (find that company where you just must work)

Step 3, invade Russia in winter

Step 4, find out that it is cold and you have no food…

This is not to say that in the right context some of the activities don’t have value.  They do.  Improved self-awareness in particular can be quite powerful.  However, it is a mistake to think that following this linear approach will lead to results.  Ibarra turns this approach on its head with her “test and iterate” method which maps exceptionally well to the approach that Duggan’s outlines in Strategic Intuition.  Ibarra essentially proposes a Napoleonic style of career transition that is characterized by probing and learning over a period of time.  After enough time has passed, an opportunity will present itself which can be seized resulting in radical change.  One of the benefits of this approach is that the opportunities are much more likely to be both achievable and truly rewarding.  The experiments along the way are crucial to the formation of the opportunity even though in themselves they may not appear to be providing much benefit.  In fact, they may feel as a series of small failures.

If this “test-and-learn, test-and-learn, strike” approach is successful, why are is not more promoted in the mainstream?  Why do people all to often favor a deliberate strategy when an emergent one would yield better results?  I propose that part of this cause of this is the humans propensity to avoid of ambiguity.  In the language of Behavioral Economics this is known as the “ambiguity effect.”  Daniel Ellsberg found in a study that people tend to favor a choice where the probability is perceived to be more certain over a more ambiguous one–even if the expected outcomes are known to be the same.  People avoid ambiguity and the tension is causes for historically good reasons..  However, this rule of thumb can get us into trouble in a modern context–especially when we substitute a false certainty in place of a true uncertainty.  For example, look at the following chessboard. It is black’s move.

The whites attacking pawn creates a tension and uncertainty.  Who is going to take whom?  The novice player may be very tempted to dive in and take white’s pawn–to replace an uncertainty for a known victory.  I won a pawn!  However, this is the Vienna Gambit, and taking the pawn is the wrong play.  You must leave the threat of the white pawn unresolved.  The right play is to wait and find out more before we dive in.  Taking the piece will win the battle but also result in a significant erosion of our overall strategic position.  The goal is to win the game not take the opponents pieces.  As such, the best play is to live with the ambiguity and unresolved threat.

[Warning, diverting to physics]

We all like Newtonian Mechanics.  We can see his world of billiard balls bouncing around the table.  If I hit the cue ball just right, the eight will go in the side pocket.  That is just the way the world works.  It is causal and predictive.  It is how the world works–until it wasn’t.  How many of us are truly comfortable of the probabilistic nature of quantum mechanics?  If I hit the billiard ball just right, it may–or may not–just magically appear in the side pocket.  How unsettling is that?

[Diversion complete]

Long periods of ambiguous muddling followed by brief massive changes is the norm not the exception.  Thomas Kuhn’s This outlines this exceptionally well in The  Structure of Scientific Revolutions.  Think about the massive change in the Renaissance.  Few people recognize that this change was facilitated by the significant development during the dark ages–including the development of the printing press. the heavy plow and others.  We need to embrace uncertainty.  This is not to say that we throw up our hands and do nothing.  Quite the contrary, the flip side of uncertainty is active exploration with small victories and defeats.  It is this purposeful experience that leads to flashes of insight and revolutionary progress.

But to implement this approach, one must be patient and wait.  It is unfortunately that waiting is often associated with doing nothing.  I propose the concept of active and determined waiting, and it is in this context that Siddhartha’s waiting makes sense–at least to me.  Properly executed, energetic waiting leads to real opportunity and revolutionary change.  Do not expect progress to arrive one step, or one rung, at a time.