Breakthrough Strategy: When the Answer is the Question

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Since the birth of corporate strategy, hypothesis-driven analysis has been the primary tool by which companies evaluate opportunities, advance strategies, and pursue innovation. For example, to assess the potential of a new geography, a team may be tasked to analyze the size of the market, the competitive dynamics of the market, and the “white space” opportunities it presents–almost always with a set of hypotheses and a request to conduct analysis to prove or disprove the hypotheses. Or at least, that’s the idea.

Big surprise: these teams almost always find the data to prove the hypotheses. This occurs because the hypotheses were designed to be proven, and the analysis was then a justification exercise rather than a true exploration. What often seems to happen is that an intuitive or emotional decision has already been made and the ensuing analysis is not about learning, but rather about building a rational and data-driven business case.

This is natural for reasons recently highlighted by New York Times columnist David Brooks in his new book, The Social Animal. Brooks says humans try to project the appearance of rational decision-making but that “living is an inherently emotional business.”

This doesn’t mean we should stop accepting intuitive or emotional decisions–it just means we should acknowledge them as such, and be honest about the difference between justification-based analysis and true exploration.

If your ultimate aim is to do something new, big, and/or bold–something that will truly change the game–then the work should start with an approach that’s based on asking questions and exploring how human emotion influences decision-making. Most importantly, it’s about managing the limits and barriers we unconsciously create.

Most obstacles are invented.

Through our work in transformational strategy and innovation, we’ve observed that a critical differentiator of organizations that are successful in creating breakthroughs is that they have the courage to question known facts and to explore seemingly obvious barriers… and they do this with full integrity.

What does this mean and how do you do this? We recommend a structured process of asking simple questions and challenging facts–not for the purpose of proving them untrue, but rather to explore the barriers that emerge when those facts become “givens.” The value of this is that it makes us conscious of how quickly we invent limitations–in essence, making sure we aren’t starting an evaluation with an artificially narrowed frame of inquiry or cutting off options prematurely.

To demonstrate and help make sense of this Breakthrough Inquiry Process, let’s use a clear fact: the stock market in 2011 has been highly volatile. No one would debate this, but by exploring the implications of this fact with an open mind, we may discover some interesting things. The process starts with three simple questions:

Question 1: Is it factually valid? Answer: The facts, analysts, and pundits say “yes.”

Question 2: How do we react when we use this fact to guide our thinking? Answer: We get cautious. We assume that there will be many unknowns in the future. We may begin to lose confidence in the accuracy of our forecasts. We decide it is unwise to make large capital investments. We might even begin making up rules or guidelines of what we should and should not do in a volatile market environment – as discussed earlier, these guidelines are simply emotional responses that, if allowed to go unquestioned, can quickly calcify into limiting beliefs.

Question 3: How would we react or what would we do if we didn’t accept this fact? (Note: Herein lies the potential for breakthrough thinking. It’s from this question that we give permission to suspend belief and create space to consider a different reality in which new thinking, ideas, and actions can emerge.) Answer: We might gain confidence in our forecasts and spend less time questioning them – we might even begin to see how much fear is created by emphasizing the notion of volatility… and begin to understand that our reaction to volatility is the problem, not the volatility itself. We might begin to think about large capital investments knowing that the likely conservatism of our competitors will lead them away from such investments – if we began to explore that possibility, we might find ourselves suddenly looking at other ways to leapfrog our competitors through other investments.

When this flow of possibility starts, breakthroughs occur… but that flow would never have started without honest inquiry. At a minimum, we at least become aware of the limitations or barriers that we are accepting, and put them under the light of inquiry where many of them prove less powerful than we had earlier thought.

Don’t believe us? Just look to history – almost every breakthrough, from the automobile to the cell phone, has been characterized at some level by an innovator’s suspension of belief… by their willingness to at least explore actions that would be available only if the accepted facts weren’t accepted.

What happens when we don’t take the time to question what appear to be clear facts? Well, that’s when you get McKinsey & Company’s 1980 study for AT&T that saw no great future for cell phones. The analysis concluded that high cost, clunky size, spotty coverage, and short battery life were real obstacles and likely proved an ingoing hypothesis that the consumer market was too small to support a robust cellular business. Can you imagine what would have occurred if AT&T had not accepted all of those limitations, or if it had at least questioned those facts and acted out of inquiry?

Inquiry is a muscle that gets stronger over time.

The beauty of this simple Breakthrough Inquiry Process is that it leverages the same kind of logic that hypothesis-based analysis leverages: the power of the mind to logically and systematically explore thinking and assumptions. The difference is that logic opens up new possibilities rather than limiting them by focusing on building water-tight arguments. We open up the aperture, and with that wider view, we see all sorts of options. At the highest level, this is about interrupting the patterns that emerge from contracted thinking.

To be sure, inquiry around known facts is a bit counter-intuitive. But the same can be said of any true innovation process. Importantly, our experience teaches us that capability grows with practice and time – at the individual and organizational levels.

Socrates really was thinking big with his famous statement, “The unexamined life is not worth living.” We might extend this statement further by saying “The unexamined fact is not worth accepting.”

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