Playing To Win

What Makes for a Great Strategist?

A Combination of Mindset & Skills

Source: Roger L. Martin

Last week, I got a good question from past student, Stewart: “What are the skills needed to be a strategist in today’s wild world?” Now, I am not so convinced this world is particularly wilder than before and have written about that previously in this series. But requirements for being a strategist is a good topic and I have decided my 42nd Year II Playing to Win/Practitioner Insights (PTW/PI) piece on What Makes for a Great Strategist: A Combination of Mindset & Skills. You can find the previous 94 PTW/PI here.

Mindset Don’ts

There are three common mindsets in the strategy arena that if held detract from a person being an effective strategist.

The first is a belief that strategy capability and IQ/GPA/GMAT are positively correlated. The strategy field is chock-a-block with high-IQ/GPA/GMAT people because this belief is strongly held. They get into strategy either in-house or at a consulting firm because they think their big brain makes it perfect for them. I am not saying that for sure there isn’t a positive correlation of some sort. The problem is the belief. It causes strategists to think they are smarter than colleagues and customers, and also makes them think that the things that got them high grades/scores (e.g., thoroughly memorizing and repeating back conventional wisdom) will help them create great strategy.

I am not saying this because I am jealous of high IQ/GPA/GMAT people. I am all the above — in spades. And it took me a long time to overcome the mindset that came along with it. I became an effective strategist only when I recognized that my mindset was harming my ability to listen to and learn from colleagues and customers.

The second is a belief that strategy is primarily an analytical exercise. This mindset typically comes as a natural extension of the first mindset. Each of IQ, GPA, and GMAT is primarily a test/measure of analytical capacity, so if you are high-IQ/GPA/GMAT, you are inclined to have a hammer (analysis) and to you, everything looks like a nail (a problem to be solved analytically).

As I have written before in this series (here and here), data analytics has really limited utility in strategy — and has a lot of disutility. That is because data analytics can never do more than extrapolate the past into the future. Great strategy is about creating a future that does not now exist. Not only is data analytics incapable of helping you make that happen, but it is also quite capable of convincing you not to try.

The third unhelpful mindset is believing that strategy can be created by people divorced from operations. This mindset is typically driven and reinforced by the first two mindsets — i.e., we strategists are much smarter than the ‘operators’ and they really aren’t good at analytics, so we are better equipped to do strategy and can hand them the easier task of executing our brilliant strategy. But the operators are the only ones who really know the inner workings of the business. Anybody divorced from operations will never know as much — no matter how smart they are.

These three limiting strategy mindsets are almost guaranteed to turn strategy into planning: a long and involved analytical exercise that produces a detailed set of initiatives that the company must undertake to optimize the status quo. When completed, the strategists stand ready to blame the dull-witted operating people for not implementing their strategic brilliance.

Mindset Do’s

There are three uncommon mindsets in the strategy arena that, if held, help a person be an effective strategist.

The first is a belief that strategy starts with customers. Strategy does not start with what shareholders want, or what ‘core capabilities’ we have. It starts with a profound appreciation of and fascination with customers, and a deep desire to make their lives/businesses better off. You will get better insights than most strategists at competitors, who are merrily analyzing stuff, will ever get. And you will be in a better position to imagine possibilities for creating a better future for customers — and winning while competitors plan.

The second is a belief that the world is a complex adaptive system. Hence it is probabilistic not deterministic, but it is not random. It is easy to fall prey to the conceit that the world is linear and that the past can be extrapolated into the future deterministically. That approach inevitably fails and when it does, the disappointment tends to drive the extreme reaction of declaring the future to be random and unknowable. Neither extreme is a helpful mindset for the strategist. The helpful mindset is to hold that as with all complex adaptive systems, the business system in which you operate is challenging to understand, but it has patterns that can be comprehended — not perfectly but well enough to make educated guesses that can be tweaked and tweaked as you get feedback from the actions that you take.

The third mindset is the confidence to invent the future, that is, to make true something that is not now true. Mediocre strategists believe that optimizing the present is sufficient for success. Great strategists know they have to aim higher — or someone else will aim higher and will succeed. That means balancing the exploitation of what is and the exploration of what might be. All forces will pull towards exploitation of what is. A great strategist needs to resist that pull and always invest time and energy in exploration of what might be.

Requisite Skills

Without a productive mindset, a person can’t be an effective strategist. But even with a productive mindset, that individual needs to develop a particular set of skills to twin with the productive mindset. The good news is that the productive mindset will tend to drive the acquisition of the requisite skills — and the opposite for the unhelpful mindset.

There are three skills that are the most critical for being an excellent strategist.

Qualitative Appreciation

Great strategists need to be capable of making fine distinctions in the qualitative attributes of their environment. For example, they need to be able to understand the nuances of how their offer makes their customers feel and what small changes can cause disproportionate shifts in that. They will all have been taught to survey a statistically significant number of customers and ask them some question about how they feel on a 10-point scale. That is the technique and skill of quantitative manipulation, which takes all the nuances out of the evaluation in question and crunches blunt numerical representations using standard statistical procedures.

Quantitative manipulation can help you optimize current things and measure results after the fact. But they can do very little to help strategists create a bright future. For that, they need to develop their skills in assessing and understanding qualitative features like meaning, happiness, beauty, belonging, etc., as I have written before in this series.

Dialogue

Great strategists realize that strategy is a team sport and realize that coming to strategy insights together with other stakeholders in the system, whether customers, channel partners, suppliers, managers from other functions or business units, etc., is more powerful than attempting to do it alone. Rather than coming up with a strategy and then working to get ‘buy-in’ for it, great strategists listen, share, and learn along the way so that ‘buy-in’ is not something you do after ‘formulation.’ It is a natural part of the creation process.

Unfortunately, this is not how strategy is taught in business schools, where it is taught as an analytical exercise for smart people, which tends to discourage their investment in developing the ability to dialogue productively with ‘less brilliant’ people (who typically are smart in ways not appreciated by strategists).

Juggling More Balls

Three decades ago, I learned from Swedish psychologist Ingvar Rosen that thinking is like juggling balls. Each relevant variable is like a ball you must keep in the air. Of course, it is easy to focus on fewer balls. Anybody can juggle two balls. Three is harder but with a little practice it is doable for almost anyone. But making a decision that requires juggling (say) seven variables is really hard, and strategy is a seven-ball, not a three-ball activity.

But formal business education teaches students to minimize the balls that they consider by teaching courses in narrow siloes. Marketing is taught as if Operations doesn’t exist in space or time, Strategy as if Accounting didn’t, and so on. Economists are always happy to inform you that ‘all else being equal’ such-and-such is true, even when they and everybody else know all else isn’t equal.

Because the formal educational system has zero utility on this front, to be a great strategist, you need to take responsibility for building your own skills in juggling multiple balls. Fortunately, there are practical tools for doing so. I have written/co-written two books on just how to build you capabilities to integrate more variables productively and skillfully into your decisions.

Practitioner Insights

Be more conscious of your mindset relative to the three don’ts. Do you assume that you are great at strategy because you are a brilliant quantitative analyst and dismiss operators as less qualified than you. If so, catch yourself and rethink.

And drive your mindset toward the three do’s. When you are working on strategy, ask yourself, have I spent enough time really understanding customers? Do I believe that a key part of my job is to discern patterns in the complex system in front of me? Have I taken on the task of creating a future that doesn’t exist?

Building the three requisite skills is all about practice. I have been working in strategy for four decades and I still have not met a mythical ‘great natural strategist.’ All the great strategists with whom I have had the pleasure of working were exceedingly well-practiced by the time they became known as great strategists. Not most: all. Conversely, I have never met a person who, with dedication and practice, can’t become an excellent strategist.

To develop your qualitative appreciation skills, you need mentoring. In all the domains in which qualitative appreciation is recognized as important, a central feature is mentorship by an expert who has more highly developed qualitative appreciation skills. Whether you want to be a painter, a designer, a chef, a sommelier, or a surgeon, formal mentorship will be a core part of your learning process. Find a strategy mentor to watch in action as well as to critique your work. If you can’t, go to sommelier or cordon bleu school because there you will learn generalizable techniques in qualitative appreciation.

To develop your dialogue skills in the context of strategy, make sure to involve customers and colleagues whenever you work on strategy. Don’t try to ‘figure it out yourself’ and then run your answers by others. The perfect time to practice your dialogue skills is when you don’t know the answer.

To develop your juggling skills, be explicit about the variables you are considering in any decision. Write them down so that while you think and work, you can check whether you have dropped one or more from consideration. And after you have made your list, add another variable to practice integrating it into your thinking.

Becoming a great strategist is within your control — you just have to enforce a productive mindset, and practice, practice, practice.

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Roger Martin

Professor Roger Martin is a writer, strategy advisor and in 2017 was named the #1 management thinker in world. He is also former Dean of the Rotman School.