Distillations in this newsletter: Illusory superiority – a lesson from behavioural economics. The most important thing I learned this month – ‘process accountability’. How quantity trumps quality. What kind of strategist are you? The six roles required for strategy development.
STRATEGY DISTILLED:
A monthly concoction of insight, learning and things you might have missed for anyone who works on strategy, works with strategy or just loves strategy.
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This month …
- Illusory superiority – one of many findings from behavioural economics we need to know about as strategists.
- Process accountability – the most important thing I learned this month.
- Snippets related to strategy you may have missed: ‘The parable of the pottery class – quantity trumps quality’ and ‘What kind of strategist are you?’
- A new model released from Goal Atlas on Creative Commons: Six roles required for strategy development.
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Lessons from behavioural economics
Illusory superiority
I learned about this one the hard way! Several years ago, and before I learned about Dunning and Kruger’s original research, I audited the digital marketing capabilities of a team within a large global organisation. As a result of the audit a significant training programme was devised and rolled out, after which the audit was repeated. How much had the training improved their capabilities? To the client’s initial horror, the results were worse after the training than they had been at the start. It wasn’t, of course, that the training had managed, in some way, to de-skill them. Rather, it had taught them about the complexities of what they were trying to achieve and made them realise how much more they had to learn. They discovered that they didn’t know what they didn’t know.
What is it? Illusory superiority is a cognitive bias that leads us to believe we are better or more capable that we actually are. One study found that 93% of US students considered themselves to have above average driving skills. In another study, 70% of respondents thought they had better than average leadership skills. 68% of university teaching staff rated themselves in the top 25% for teaching ability. Dunning and Kruger’s original research showed that people typically overestimate how good they are at social and intellectual tasks. Poor performers, in particular, grossly overestimate their abilities.
Why does it matter for strategy? Strategy is all about doing, or attempting to do, something different from business-as-usual. Something relatively unfamiliar. Something you may underestimate the difficulty or complexity of achieving. As a result, strategy often launches on a wave of optimism, before crashing into a trough of despair. Good strategists recognise this and try to soft-launch strategy initiatives:
1. what does the strategy want us to achieve and why?
2. what new ways of working do we need to adopt to achieve strategic success?
3. how can we ramp-up our knowledge to make realistic assessments of our likelihood of success?
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Process accountability – the most important thing I learned this month
I find myself talking a lot these days about the ‘strategic agility conundrum’. How can a strategy be, at the same time, a constant North Star informing and guiding decision-making whilst also adapting to changing circumstances? Or, as Adam Grant put it when interviewed by Shane Parrish, “how do you balance the need to be open to ideas with the need to be decisive?”
Here’s his answer (lightly paraphrased): This is really about the way we hold people to account in organisations. Normally people are counted as successful if they get a good result and failed if they get a bad result. But it often takes years to find out what the results were. So, it is easy for people to persist with a failing project for a long time. Research suggests we need to move to process accountability, not just outcome accountability. How do we get people to think seriously about how they know their process is a thoughtful and thorough decision process as opposed to one that is driven by whim or intuition? We need to stop rewarding good outcomes from bad processes – that’s just luck – a bone-headed decision that happened to turn out well. We need to start celebrating, or at least normalising, good processes with bad outcomes. That was an experiment worth running.
His conclusion: “I’m constantly shocked about how few people think this way.”
Brilliant! ‘Process accountability’ has got to be the way forward in the early stages of a new strategy to reconcile the need for strategy to have the consistency to guide action whilst also having the adaptability to respond to changing circumstances.
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Snippets related to strategy you may have missed …
The parable of the pottery class – quantity trumps quality
From Jeff Atwood (originally from a longer post in Kevin Kelly’s Cool Tools), comes the following cautionary tale:
“The ceramics teacher announced on opening day that he was dividing the class into two groups. All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality – they only needed to produce one pot – albeit a perfect one. At grading time, a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity. It seems that while the “quantity” group was busily churning out piles of work – and learning from their mistakes – the “quality” group had sat theorising about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.”
It always concerns me when the launch of a new strategy triggers weeks or even months of research, analysis and contemplation. Is there nothing you can just jump right into and start trying out? Sure, you are going to make lots of mistakes, but so long as they are not expensive or damaging mistakes you may end up with a better-quality outcome that if you sought perfection from the start.
What kind of strategist are you?
In a classic McKinsey article, published in 2014, authors Michael Birshan, Emma Gibbs, and Kurt Strovink identified 13 facets of strategy-related work. They then surveyed 350 senior strategists across 25 industries to see how they clustered in the practical working lives of strategists. I suspect most of us will identify with one or perhaps two of the archetypes they identified.
- The Architect – the competitive-advantage officer, the performance challenger, the business developer
- The Mobilizer – the strategic-capability builder, the performance challenger, the project deliverer
- The Visionary – the trend forecaster, the innovator, the business developer
- The Surveyor – the trend forecaster, the business developer, the government/regulatory strategist
- The Fund Manager – the portfolio optimizer, the resource reallocator, the decision-process facilitator.
Perhaps a more challenging issue, however, is whether we should be focusing more time and effort on the archetypes that don’t immediately resonate.
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A new strategy model from Goal Atlas, released on Creative Commons …
The Six Roles Required for Strategy Development
In light of the McKinsey article above, I thought I would release my own set of archetypes that I published in The Strategy Manual. These 6 roles (the Magician, the Executive, the Advocate, the Analyst, the Author and the Controller) can be used as provocations to explore the very different kinds of strategy jobs that will be needed for strategy development, and how best they might be filled by individuals and teams within your organisation.
Download the The Six Roles Required for Strategy Development as a pdf or see all 18 strategy models released by Goal Atlas so far.
Released under Creative Commons License, all our models are free for you to use in your strategy documents and presentations (attribute to Goal Atlas 2021).
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Goal Atlas runs workshops and sprints to help your strategy work better across your organisation. Get in touch if you think we might be able to help.
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