With Strategy In Mind: It's Time We Look Inside

People wouldn’t write so much about strategy if it was easy. It’s not. In fact, strategic decision making is likely the most difficult and complex mental activity in all of business, war and politics. This difficulty was articulated some two hundred years ago in Carl von Clausewitz’ strategic masterpiece On War: “Clausewitz's approach is profoundly realistic in that it describes the complex and uncertain manner in which real-world events unfold, taking into account both the frailties of human nature and the complexity of the physical and psychological world.” (http://www.clausewitz.com/).

Recently McKinsey Quarterly (Strategic decisions: When can you trust your gut? March, 2010 )  published a series of interesting strategy articles that touch upon some important aspects of the psychological world – the human mental processes that influence and shape strategic decisions in business. In this Clarion Insights article we look to advance the thinking. Evolving research in neuroscience is revealing more and more about the underlying mysteries of our brains. This knowledge -- combined with a certain degree of self awareness -- offers the potential for new insights that could help cultivate coveted leadership capacities in strategy. Like Clausewitz, our “purpose is to develop our human capital—i.e., to help the reader develop his or her own strategic judgment in order to deal with the ever-changing strategic environment.” (http://www.clausewitz.com/)

Building on the Articles Published

The McKinsey articles in part tell us that the decision making process of the human mind is limited by biases, a slew of them actually, which inconveniently makes for poor business strategy. But what is equally troubling is what one of the contributors (psychologist and Nobel Laureate in Economics, Daniel Kahneman) points to as the overconfidence of persuasive, charismatic executives. Natural bias in the brain ( + ) combined with overconfidence ( + ) combined with reliance on personal intuition or “gut feel” ( = ) is a powerful source of illusion amidst mission critical leadership decision making.

As Kahneman reminds us, CEOs are often hired for these very qualities, namely, a strong dose of confidence and decisiveness. As a result, the articles suggest a number of countermeasures or practices that business leaders would be wise to adopt, ones that aim to “assure multiple perspectives and objective fact finding”. Such practices help keep personal intuitions of individual leaders in check so that they are not allowed to run herd over the “quality and independence of information.”

Our interest in advancing this thinking is not a criticism of the recommended practices: the tools and frameworks mentioned in the articles include many that we find very effective and use often in our role as advisors and strategic planning facilitators. But the articles express a lack of optimism in leaders’ abilities to see their own biases and question their own intuitions. We wish to challenge the paradigm of thinking here.

Optimistic or not, we believe a distinguishing factor of high performing leaders is their willingness and capacity for self awareness. Recognition that the human mental process is fraught with bias is only the tip of the neurological iceberg. Success at the highest levels of leadership requires a willingness from each of us to look more astutely beneath the surface of our own brains. Perhaps this is a discipline not meant for the many, but we see enough evidence to suggest it is a particular mark of brilliance in a few.

Image fMRI cutaway.  www.mindhacks.com