- Strategy and strategic thinking have their origins in ancient warfare.
- Strategic thinking also puts emphasis on the future and how we talk about and maneuver in the future.
- A more general view of strategic thinking is that it is about knowing. This gets complicated when you consider the nature of the future is unknowable so to understand strategic thinking we will need to understand the many different ways it means to know something.
- This relates to the question of “modes of knowing” or “modes of thought” that philosophers have studied for a long time.
Game Theory AS AN INTRODUCTION TO Strategic Thinking
- Strategic thinking is used in a setting where the outcomes depend not only on your actions but also the actions of others.
- Game theory cannot tell you what your goals in life should be. But once you know what your goals are then perhaps game theory can help you reach them
- Play “The grade game“.
- Do not play a strictly dominated strategy because instead if you play the strategy that dominates it you will do better in any case.
- Rational choice can lead to outcomes that are inefficient. A great example of this is “The prisoners dilemma”.
- “You can’t get what you want unless you know what you want”. As a piece of logic, this is false but as a strategy this works.
- The essence of strategic thinking is the ability to out yourself in you opponents shoes, workout what their payoffs are and try to figure out what they will do.
Economists at the University of Dayton and Texas A&M released a study called “Aggression in Mixed Martial Arts: An Analysis of the Likelihood of Winning a Decision.”
- This study looked at fight metric data and concluded that a fighter that throws more overall strikes is more likely to win a judge’s decision regardless of if the strikes land.
Strategy as Scenarios and Futures
- The real voyage of discovery comes in not seeking new landscapes but in seeking new eyes – Marcel Proust
- The seeds of the future are in the present we just have to be able to see them.
- “The art of the long view.”
- When we.make decisions about the future, we are operating on a mental map of how the world works The quality on these decisions will depend on the quality of the map.
- If you get your facts wrong y9ou get your map wrong, if you get your map wrong, you do the wrong thing.
- Once you believe a mental map, it is very hard to change. The strategy will involve being able to think differently.
- You have to understand the interplay between what you want to accomplish and what the world will allow.
- What we tend to do is take one model of the world and vary it slightly to give us our range of possibilities. But we need to use multiple models to get our variance.
- To see the big changes, it is insufficient to take one view of the world and only vary it slightly.
- This has to do with changing how we think. We often have over confidence, think from the inside out, not see the whole story, frame the questions wrong.
- If you haven’t thought about you are unlikely to see it in time.
Plotting your STRATEGIC THINKING scenarios
- Scenarios are not predictions or strategies. They are imagined alternative futures in which your decisions could play out in.
- The should be designed to highlight different risks, opportunities and threats that face your strategic issue.
- Scenarios need to be written in an engaging narrative style, well constructed and believable plots so that that the people reading them will become deeply involved and then will make better attempts to understand them.
Finding a few plots
- You want to create a team of people who have thorough knowledge of the situation but come from as diverse a background and skill fields as possible. People with different intellectual disciplines and cultures so you have the widest range of perspectives as possible.
- Getting the widest range of perspective is the key to success and the exclusion of unorthodox thinkers is the key to failure.
- You then need to identify the key decision that needs to be made and develop a deep understanding of questions to ask about it.
- Keep your time frame in mind. Your questions can change over time.
- Not all scenarios have to be decision focused and can be more general, but you will still need to develop relevant questions in the same way.
Brainstorming a list of key factors
- Make sure no idea is immediately dismissed.
- Try to identify driving forces and trends.
- You five general categories of external forces are technological, social, environmental, political and economic.
Distinguishing Predetermined Elements from uncertainties.
- You must identify what trends are inevitable and are not likely to change. These will be trends in each of your scenarios.
- Uncertain trends or factors must also be identified. You must look at how uncertain you may be about this factor and also how important this factor will be.
Identifying a few scenario logics.
- Figuring out which trends and forces are the most important will take extensive discussion.
- Two possible methods for figuring out the basic ideas for a small number of scenarios are inductive and deductive.
- Inductive is less structured and involves a lot of free-flowing group discussion to reach a conclusion.
- The deductive approach uses simple techniques to create a 2 x 2 matrix of the two most critical uncertainties.
The Inductive approach
- This has two variants. One is called emblematic events and the other is called the official future.
- In emblematic events you will come up with events that are typical of different scenarios, You will build up scenarios from single plot points.
- In the official future, you come up with a vision of the future with very little surprising changes taking place. Then brainstorm variations of the official future with unexpected changes taking place.
The deductive approach
- With the deductive approach you want to get a priority of all your factors and trends and then work out what the two most critical uncertainties are.
- One you have your two most critical forces you set these up in a 2×2 matrix. Using a matrix assures that your scenarios are different in a logical way and that the most important factors are included in all scenarios,
Fleshing out scenario plots.
- There is no single correct way to flesh out a scenario plot.
- Just predicting change will not be enough you have to consider the reactions to that change.
- Systems thinking is useful for deepening the plots. Narrative development is good for lengthening the plots into stories. Characters are good for populating the scenario.
- Systems thinking: Instead of just focusing on the individual events in a plot point you look at the underlying systems that cause these events to happen. The mechanisms and patterns behind events can be more beneficial to understand than just the event itself.
- Building Narratives: This is fleshing out your scenario with a beginning, middle and end. It is giving the story behind how your plot points will likely weave together over the time period in your scenario.
- Characters: While you want to avoid building your entire plot around aj 9ndividual characters living in your scenario are great ways into convey your plot and the importance of you events
- You want all your plots to be different yet remain relevant to your central question.
- Effective plots make people rethink their assumptions about the future.
- Winners and losers: A common plot point that see the scenario as a zero sum game. This sees the plot as being a conflict between two forces.
- Crisis and Response: A challenge will arise in your plot and adaptation to the challenges will either be met or not met. If adaption is met then a new set of challenges or a new situation with winners and losers may arise.
- Good News/ Bad News: Make sure to include both good and bad elements in your future scenarios,
- Evolutionary Change: Taking its cues from biological evolution the idea is that change will occur in all systems over time.
- Revolution: A sudden erupt overhall and change of circumstances in the plot.
- Tectonic Change: Deep structural chnges which will produce massive resuolts. Like the moving of tectonic plates causing an earthquake.
- Cycles: Looking at the tming and rythem and the cycles which all factors move in.
- Infinite possibility: he best case scenario where infinite growth wsill occour.
- The lone ranger; a David vs goliath story where you pit yourself against the rest of the world,
- Generations: Takes into account the new generations born and generational changes between them.
- Perpetual Transitions: Looks as change to be infinite and continuous but that adaption wiool not be uniform.
- As the name suggests these are surprises that can completely overhaul the scenario. Like a natural disaster.
- If you construct a four scenario matrix you may want to add a fith scenario with an out of the box wildcard scenario.
Tips for scenarios
- Do not simply design a high, middle and low case for your scenarios. Expand upoAn the question further.
- Avoid just designing a most likley cenario. The idea is to look at the scenario from as many viewpoints as possible.
- Avoid making too many scenarios You can get caught in a trap of just making too many small variations on a theme. Workout your biggest priority’s and build complex scenarios around those,
- Name your scenarios something memorable and catchy. This will help sell your ideas and get people to invest time into them.
Thinking about Stories and Metaphors
- Metaphors allow us to percieve the world in different ways which will help us to think strategically.
I hope you enjoyed An introduction to strategic thinking!