4 attributes of strategic thinking

Strategic thinking has been a side topic for the past decade whenever I taught innovation. However, last year I got an opportunity to study it more during my course at IIM Bangalore on “Strategic Management of Technology and Innovation”. In this article, I would like to present my current view of the 4 attributes of strategic thinking. It’s my way of delayering strategic thinking. To illustrate the attributes I plan to refer to Andrew Grove’s book “Only the paranoid survive”. I found it useful not only because Grove presents many examples where these attributes are exhibited but also because he was vocal about the slippery areas associated with some of these attributes.

The four attributes of strategic thinking I would like to present are challenge clarity, bright spot awareness, metaphoric thinking and hypothesis thinking. Let me try to articulate each one with an example or two.

Challenge clarity: This is arguably the most important attribute of strategic thinking. Here is an example from “Only the paranoid survive” which illustrates what challenge clarity is. By then Intel had been losing money on memories, its core business, for a long time. Andrew Grove writes, “I remember a time in the middle of 1985 when I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. I asked, ‘If we got kicked out and the board brought in a new CEO, what do you think he would do?’ Gordon answered without hesitation, ‘He would get us out of memories.’ I stared at him, numb, and said, ‘Why shouldn’t you and I walk out the door, come back and do it ourselves?’”¹

I have been facilitating the exercise of identifying the topmost challenge with many executives for over a decade. And I feel many of them felt uncomfortable or lost during this exercise. We are comfortable articulating a plateful of challenges. But to say one is the most critical needs clarity. And without that clarity strategic decision making is difficult.

Bright spot awareness: By the time Intel management took the decision of exiting its core business of memories, a viable alternative was already present within the company – microprocessors. It was a profitable business and growing but it was not considered of any strategic importance. In this case, “microprocessor business” is referred to as a bright spot – something working in the same context where many other things like memories business are not working.

We have a huge bias for dark spots (things that are not working) and we spend disproportionate energy in removing the dark spots. For example, companies spend a lot of time on exit interviews – to understand why employees are leaving. And in contrast, spend little time doing staying interviews – why employees are staying long years (bright spots). 

In the 1770s Britain lost a jewel in its empire leading to the formation of the United States of America. During this crisis period Britain decided to shift its attention to a bright spot in its empire – a series of victories by a private corporate armed force led by Robert Clive in Bengal, India. It paid handsomely over the next century. Bright spot awareness is counter-intuitive and yet extremely important.

Metaphoric thinking: It is not sufficient to know a challenge and a response. Things need to be sufficiently concrete to give direction to oneself and especially a team. This is where metaphors become important. Andrew Grove tells the story about an executive staff meeting where they were discussing Intel’s new direction as a “microcomputer company”. Their Chairman, Gordon Moore, said, “You know, if we’re really serious about this, half our executive staff had better become software types in five years’ time.” Becoming “software types” was a good metaphor for a company where almost everybody is concerned with hardware.²

Dr. Venkataswamy who founded Aravind Eye Care asked, “How do we deliver eye care with the same efficiency as McDonald's?” And Dr. Kiran Bedi asked, “How do we transform a jail into an Ashram?” Metaphoric thinking plays a crucial role in establishing direction clarity.

Hypothesis thinking: This is perhaps the toughest of the four attributes to master. Andy Grove narrates a story of an exit interview during a podcast discussion. During this exit interview, Steve, a young employee said, “Andy, if I were you, I would take microprocessors seriously. We should learn how to use microprocessors and become an expert.” Andy said, “Sure” and never paid any further attention. In fact, Andy mentions that it was inconceivable to believe Steve. Hypothesis thinking is about treating the input as a hypothesis and not rejecting it outright like Andy. 

In the book “Only the paranoid survive” Andy calls people like Steve Cassandras³. Cassandra was a princess of Troy who foretold the fall of Troy. He mentions that there are Cassandras all around us giving us useful hints about the big changes happening around us. Hypothesis thinking requires a certain quality of listening. It requires being sensitive to receiving inputs contrary to one’s belief. It requires cultivating mindfulness.

Once you begin to treat every suggestion as a hypothesis then the natural next step is experimentation. Andy Grove mentions in the book, “Resolution of strategic dissonance doesn’t come about in the form of figurative light bulb going on. It comes through experimentation.”⁴

In short the four attributes of strategic thinking we looked at are challenge clarity, bright spot awareness, metaphoric thinking and hypothesis thinking.

References from: Andrew Grove, “Only the paranoid survive”, Currency Doubleday, 1999.

1. Page 89 (Dialogue with Gordon Moore)
2. Page 143 (Gordon Moore’s metaphor of ‘software types’)
3. Page 108-109 (Listening to Cassandras)
4. Page 129-131 (Experimentation for resolving strategic dissonance)