The first blog in this series talked about the strategic habit of anticipation. Anticipating what lies ahead is the first step in developing a strategic perspective. Anticipation is the critical behavior that you engage in to develop a broadly informed view of the industry and the climate that you are operating in. However, anticipation by itself is not a complete or effective tool. Once you have identified movement on the edge of your business or industry, you need to assess its impact and importance.
Strategic Habit #2
Paul Schoemaker of the Wharton School says that the second habit for strategic thinkers to use is critical thinking. According to Schoemaker, “critical thinkers question everything.” Competitor research may reveal that other firms in the industry are pursuing certain goals or markets, that they are changing technology providers, or they are restructuring their organizations…but what—if anything–does that mean for you?
Critical thinkers look objectively at data and information to weigh its relevance for their firms. Just because a competitor is doing it doesn’t mean you should, too. Reacting to every trend you see can actually distract you from your firm’s mission and dilute your competitive advantage. Instead, it’s important to look objectively and critically at what you anticipate and learn to determine how significant its impact may be as well as how it fits with your firm’s vision and mission. You may need to hold off on taking action now, but keep other firms’ moves in your line of sight so that you can take a step at the right time. Or you may think that swift action is indeed called for.
Critical thinkers, says Schoemaker:
- “Reframe problems to get to the bottom of things, in terms of root causes.
- “Challenge current beliefs and mindsets, including (their) own.
- “Uncover hypocrisy, manipulation, and bias in organizational decisions.”
Narrow, conventional thinking is a danger for any firm. Two elements to be particularly wary of are cloning among the leadership team and confirmation bias.
We tend to gravitate toward people just like us. It is not uncommon, then, for teams to share a value system, a world view, a predisposition toward risk, and a desire to stay in one another’s good graces. If everyone on the leadership team views the world in a similar way and thinks similarly, their assessments of the world at large are likely to be similar. It also means that they are likely to share the same blind spots. Altogether, that can mean that important signals are overlooked or undervalued because the leaders are viewing circumstances from the same perspective. Alternate points of view, alternate approaches, and alternate interpretations may be harder to come by, but they are necessary for a leadership team to effectively evaluate whether an event or trend is relevant for a firm.
Trouble with Like-Minded People
In addition, confirmation bias – that innate tendency to look for evidence that our current decisions are correct – reinforces conventional thinking. Wikipedia defines it this way:
“Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one’s prior beliefs or values. People display this bias when they select information that supports their views, ignoring contrary information, or when they interpret ambiguous evidence as supporting their existing attitudes.”
Confirmation bias cannot be eliminated – it served a really important role back when our ancestors were focused on day-to-day survival. We still carry it with us and we always will. It can be managed, however. One way to ensure critical thinking and reduce confirmation bias is to ensure that there is diversity on your team. People with different life experiences, varied social/cultural/ethnic backgrounds, divergent political points of view, etc. will help ensure that belief systems are challenged in a healthy way. Everyone needs to know that they can state their opinion safely, without retribution or marginalization. If you want to be committed to ensuring critical thinking is happening at your firm, then diversifying your team and reducing confirmation bias is a necessary step.
Perhaps expanding your team is not possible at the current moment. Then you can still access a diversity of thinking by creating an advisory group that includes peers, respected business professionals, and members of your team. Gather the group together at least annually to talk about what they see happening in the industry and the world, and what they think it means for you. Consider, too, seeking input from your social media “hive mind” – your LinkedIn connections, and Facebook and Twitter followers.
Seek People Who Ask Hard Questions
Critical thinking will segue us naturally into the third strategic habit, interpretation. That will be the subject of our next blog.
What are your thoughts on these topics? How do you ensure that critical thinking is alive and well in your firm? How do you combat cloning and confirmation bias to open the field of possibilities? Let’s start a conversation…