Hierarchy of Strategic Thinking
Business people bandy about words like strategy, innovation and culture all the time, but if you ask people to define what these words mean you’ll get very different answers. So when people repeat well-known phrases such as “culture eats strategy for breakfast” what they’re saying is that something (they can’t agree on) is more important than something else (they can’t agree on). Is it any wonder so many businesses are struggling in these uncertain times?
Confusion increases when people start talking about strategy and tactics. Due to rising uncertainty some businesses have rejected strategy entirely as they equate strategies with plans and they know plans don’t survive first contact with reality. Therefore they focus rigorously on tactics instead, which they usually understand to mean ‘doing things quicker’. But if you’re in a foreign city and trying to find your way to your hotel you don’t start running quickly in random directions hoping to get there soon – as hope is not a very good strategy. In this situation of course you’d be better off with a map.
For the world of business there is Wardley Mapping — the best approach to strategy you may not have heard of yet. At its heart sits a ‘Hierarchy of Thinking’. This states that, before you decide WHO must do WHAT by WHEN (operational decisions) you must agree HOW you’re going to do something (tactical decisions) – these might be decisions about whether to use agile or lean methods; or whether to enter a new market by yourself or in a joint venture with someone else.
However, before you decide HOW to do something you need to align around WHY you’re making this move here rather than that move there (strategic decisions) – these might be decisions about why you’re building this new product rather than something else; or why you’re entering this new market rather than entering some other. But these questions are hard to answer because they’re about the future and the future is an uncertain country. Therefore, you need one more type of thinking first — you need to identify WHERE your options for action are.
Identifying multiple WHERES — different products you can develop that will satisfy users’ needs; or various markets you could enter to satisfy your own need for surviving and thriving — enables you to compare options and more easily decide WHY these moves here make more sense than those moves there (perhaps market X is better because you have key relationships there; or product X is better because it will force you to develop new skills that will be critical in the future).
Only when you’re aligned strategically — agreeing WHY you’re making these moves and not others — should you turn to tactics (HOW to do this) and then operational decisions (WHO will do WHAT by WHEN). This is the hierarchy of thinking: WHERE before WHY before HOW before WHO, WHAT & WHEN.
Yet many companies fail by jumping straight into operational decisions (WHO will do that) or focusing only on tactics (HOW will we do that). This upside-down thinking not only makes it harder to make good decisions but also makes the entire decision-making process painful and frustrating for those involved. This is why (too) many companies end up outsourcing their strategic decision-making to whomever can answer WHY (we should do this) most confidently. But the answer all too often is “because it’s best practice!” or “it’s what Elon Musk would do!”. Organisations need better.
So, where does culture come into this? Well, any strategic decision that ‘goes against the grain’ of a business is destined to fail. If you don’t focus on what your customers really need, or develop the skills your people require to satisfy those needs, then you’re going to find yourself in trouble — no matter how quickly you do things. It’s at that point that the ‘thinkers’ (who created the strategy) start blaming the ‘doers’ for poor execution; while the ‘doers’ (rightly) start criticising the ‘thinkers’ for both ignoring what customers really need and expecting employees to implement strategies that they lack the skills or support for.
Therefore, it’s more correct to say, ‘culture eats BAD strategy for breakfast’.
To overcome this problem culture and strategy need to ‘have lunch’: People from the frontline must come together to identify the multiple WHERES in their landscape — then discuss WHY these moves make more sense than those moves. Only when there’s agreement about this should attention turn to HOW they should do this. And if you find yourselves incapable of executing a certain move you go back to your multiple WHERES and make a different set of choices (whilst simultaneously working on developing the capabilities you now know you’ll need).
This is the art of strategy in an uncertain world.