The US Army War College describes the chaotic conditions of a battlefield as VUCA – Volatile, Uncertain, Complex and Ambiguous. These are the factors generals must contend with as they penetrate “the fog of war” to determine their strategy. Corporations face the same turbulent market conditions as they vie for competitive advantage. This demands a high level of situational awareness – the essential starting point for the development of a winning strategy.

What kind of mental discipline is involved in creating this kind of situational awareness? The ancient parable of the blind men and the elephant provides some valuable lessons.

In ancient times a king ordered all his blind subjects to be assembled and divided into groups. The groups were taken to an elephant and each group was introduced to a different part of the animal.

Those who made contact with the head described the elephant as a water pot, those who felt the ears defined it as a fan, those who touched a leg said it was a tree, and those who felt a tusk thought it was a peg.

The groups then fell into arguing amongst themselves, each insisting their version was correct and all others were wrong. It was only when they listened to each other and built on each other’s perspectives that they were able to construct the whole picture and “see” the elephant. 

The big lessons

1) One kind of blindness is to see only what we want or expect to see and to screen out evidence that does not fit our preconceived notions. Psychologists call this the “confirmation bias.” We all suffer from it to one degree or another. It seems to be part of the human condition, but can lead us seriously astray.

For example, in its long march into insolvency General Motors kept blaming its cost disadvantages, while downplaying its quality deficiency versus Toyota – the main cause of its ultimate failure. Xerox committed a similar error when it ignored Canon’s entry into the household copier market. Soon Canon launched a devastating attack on Xerox’s home turf by selling fast machines directly to large companies, thereby toppling Xerox from its leadership position. Both companies simply refused to acknowledge the elephant in the room.

Avoiding the confirmation bias requires a disciplined self-awareness plus rigorous tools to enable organizations to confront the brutal truths they must contend with. Strategic Learning, the strategy process I have developed, requires that as a first step, organizations should do a Situation Analysis where diverse teams develop penetrating insights into 4 areas of inquiry: industry dynamics, competitors, customers and their own internal realities. This helps to avoid the blind spots and biases that can occur when we think alone.

2) As we strive to understand reality, a crucial factor is the ability to harness synthesis. Analysis – the ability to break things down – is a widespread competence. Synthesis, on the other hand – the ability to connect the dots and recognize patterns – is a rare but crucial capability. For example, the US intelligence services have concluded that the majority of the lapses in security (including the 9/11 tragedy) have been failures to see the whole picture by connecting the separate pieces in the puzzle. They were unable to see the whole elephant.

How can we become better at synthesis? I find it helpful to think of synthesis as having two dimensions: a vertical dimension that reveals historical trends and a horizontal dimension that reveals the connections between things. The practical translation of this vertical/horizontal thinking is this: in doing a Situation Analysis, always be sure to map the trends and avoid trying to create an insight from a snapshot. As Winston Churchill remarked, “The further back you look, the further forward you can see.” The trends tell the story. That is the vertical dimension.

To reveal the hidden connections and identify patterns, look horizontally. Examine the key insights from the separate areas of inquiry in the Situation Analysis (industry dynamics, customers, competitors, etc.) and deliberately explore them to discover the connections between them. Don’t stop until you have found the integrated story.

It is horizontal thinking that presents the greater challenge. Yet it is a vital capability. Analysis is necessary, but not sufficient. Most of the major advances in the history of knowledge, such as Einstein’s theory of relativity, have been acts of synthesis rather than analysis. They involved seeing connections between things that had not been previously understood. Brian Greene, professor of physics and mathematics at Columbia University, called Einstein’s theory “the most beautiful scientific synthesis ever achieved.”

We don’t have to be a genius like Einstein to create “the beauty of synthesis.” We can use the simple techniques I have described in order to “out-synthesize” our competitors.

3) A critical component of the kind of insights that produce synthesis is curiosity. By this I don’t mean idle curiosity; just being interested in information that happens to come our way.  I mean energetic curiosity – the relentless pursuit of penetrating questions that challenge our underlying assumptions and re-examine received wisdom.  The first part of the word question is quest. It is noteworthy that everything we know results from a question someone pursued at some point in time.

The method for doing a good Situation Analysis is based on these Socratic principles.   Each team in the four areas of inquiry is given a set of guiding questions to pursue. As they dig deeper, further questions arise until the answers become clear. It is a process of intense mental engagement.

Socrates, as we know, was the great exponent of learning through questions. He believed that great insights are invariably born from great questions. His mother was a midwife and he used to say that his art was the same as that of a midwife. She does not give birth to the child, but facilitates its delivery.

One of the great tasks of a leader is to ask searching questions and to teach everyone in the organization to do the same – not “gotcha” questions that shut down discussion, but questions that invite exploration and dialogue. These are our “portals of discovery.” We will never have all the right answers, but we must have the right questions.

“It is not the answer that enlightens, but the question.”

– Eugene Ionesco

We frequently hear the argument that business success is largely a matter of effective implementation. When results are lagging, many CEOs are likely to crack the whip and demand that their organizations implement more vigorously. “Getting it done”, they will claim, is the missing factor. “We all know that implementation is the hard part.”

Is this diagnosis true, or is it a cop-out? To stimulate a discussion about this widespread assumption, I like to pose this question in my seminars: “Which is more important, strategy creation or strategy implementation?” What follows is often an animated conversation that treats these factors as binary alternatives. Of course this is a trick question. But trick questions can play a useful role; they help us identify false choices. The real answer is that strategy creation and implementation are mutually interdependent. Therefore the more important element is the one that’s missing, because it destroys the other one.

So much for a conceptual understanding of this issue. Let’s look at some hard evidence.

• When IBM suffered a near death experience in the 1990s, was their problem bad strategy or poor execution? Clearly it was a bad strategy. Contrary to the needs of their customers they were aiming to sell different parts of the IT infrastructure in isolation from each other. Lou Gerstner came to their rescue by introducing the idea of integrated solutions, which was the basis of IBM’s turnaround.

• When General Motors descended into bankruptcy in a 30 year march to the bottom, was this bad strategy or poor execution? Again, the answer is clear. Bad strategy. They were simply not building the cars their customers wanted and their product line up was cluttered and confusing. These strategy deficiencies allowed Toyota to eat their lunch.

• Were the travails of Nokia and Blackberry simply a matter of poor execution? Hardly. Apple outsmarted them with a superior customer offering.

• A compelling example comes from the military sphere. In the initial stages of the American revolutionary war against the vastly superior British army, the American forces under George Washington were close to defeat. They were huddled together in the north of Manhattan wet, cold, dispirited and seemingly out of options. Their prospects looked bleak. Over and over they asked themselves the question, “How will we win”? In the give and take of this existential debate, the right answer came to Washington. “Winning is the wrong objective. Our task is not to lose”. With this simple switch in strategy, they harried the British forces with sporadic raids followed by swift withdrawals to avoid taking losses. It worked. They outlasted the British and eventually prevailed with the help of the French.

There is no doubt we can also find examples where poor execution was the problem. It is probably true that Kodak’s failure to prevail with digital cameras was such an example, as is the New York Times’ inability (thus far) to create a truly profitable  digital newspaper business or Kellogg’s failure to create a sustainable success with their Kashi acquisition.

Peter Drucker offered this assessment. “Most business issues are not the result of things being done poorly. Businesses fail because the assumptions on which the organization has been built and is being run no longer fit reality. These assumptions involve markets, customers, competitors, technology, and a company’s own strengths and weaknesses”.

Supporting this viewpoint is a survey of 336 organizations by Right Management Consultants which showed that 2/3 of employees do not know or understand their company’s strategy.

It is futile to argue whether Drucker was right or wrong in his assertion that most business failures are the result of poor strategy. The main point is that we will inevitably encounter failures on both sides of the strategy divide. It is therefore dangerous to make the unexamined assumption that implementation is automatically the problem when we run into difficulties. There needs to be a deeper diagnosis of root causes.

Here is a set of questions I find useful in diagnosing a performance problem:

1) Do we have a clear understanding of our customers’ most important needs, and the nature of the external environment in which we must compete for advantage?

2) Do we have a Winning Proposition that offers our customers a compelling reason to choose us?

3) Have we defined the 3-5 Key Priorities necessary to achieve our Winning Proposition?

4) Have we articulated our Winning Proposition and Key Priorities in a simple and compelling leadership message that lives in the hearts and minds of our employees?

Clear answers to the above questions are the necessary preconditions for effective implementation.  These answers are by no means easy or obvious.  They require the kind of intense mental engagement demonstrated by George Washington in his hour of crisis. But when this hard work is done and clear answers are in place, we find that implementation inevitably becomes easier.

We come back to the point that strategy creation and implementation are mutually interdependent. We need to get away from the false choice between the two. The real challenge is making them work together.

“Our plans miscarry because they have no aim. When a man does not know what harbor he is making for, no wind is the right wind”.

       – Seneca