Wednesday, 17 September 2008

Binoculars in the mist

My good colleague at the London Business School, Professor Don Sull – master of the analogy – often shows his classroom a picture of a sailor looking through his binoculars, saying “this is our traditional view of how we regard making strategy”: someone who is able to look into the future, and make a detailed plan of how to proceed towards a chosen destination.


However, the reality of strategy-making is quite different; it is more – according to Don – like you’re driving a car in heavy fog, peering through the window, trying to navigate around unexpected things that suddenly appear in your way.

I like and agree with his analogy. In pretty much all businesses, although you may know where you’re headed, the route is fraught with uncertainties and unexpected events. Technological developments, market demand, competitor actions, entrants, changing consumer preferences, the macro economy, etc.; nobody can discern with any certainty what lies ahead of us.

I’d like to extend Don’s analogy, of driving in heavy fog. Because we’re likely not alone on this road. We have competitors. And what do most of us do, when we’re sharing the road with other users in heavy fog? We concentrate on the lights of the car ahead of us, because it gives us some guidance, and we can rely a bit on the faith of the fella in front of us.

But, although it may make us feel more secure, is that really such a good idea? It’s only human I guess, but it sometimes also seduces us to drive faster than we otherwise would have done, just to keep up with the advancing lights. And, if the fog is heavy enough, it seduces us to drive closer to the guy than we may deem wise if we’d think about it. Of course, a multiple collision in the mist is quite common; we’re following the car in front of us, but that doesn’t mean that we can brake in time if he goes of a cliff, smashes into a tree or another car on the road.

That’s often how it goes in business as well. Competition is a race, but it’s also a race in the mist. Often, everybody ends up following the quickest competitor, bidding for 3G licenses, entering China, merging with IT companies, etc. But sometimes, everybody ends up with a big bump on the head.

However, of course, if you slow down, you might lose the race. So, what do you do, confronted with fast-moving competition? Well, do what you do when you’re driving in the mist. First of all, keep a healthy distance between you and the car in front of you. If he crashes, you still want to have time to stop. Secondly, if that car is driving faster than you’re comfortable with; slow down. He may get there faster than you, but he may also not get there at all. And sometimes that’s just not worth the risk.

Finally, don’t use binoculars. They will blind you. Rigidly executing a detailed long-term strategy won’t allow you to see anything unexpected in your way. You won’t be able to navigate around – let alone take advantage of – the opportunities and obstacles that suddenly appear on the road ahead.

7 comments:

Chengwei said...

This article, like others, is brilliant! The ending is particularly entertaining!

This article focuses much on looking forward. I think it would be useful to also think about looking backward and looking inward.

Looking backward here refers to learning from experience - what you experienced last time you drove in a heavy fog would have some implications on your current actions; Looking inward here refers to one behaves according to who one thinks him/herself is - you may well drive a path less traveled and encounter something serendipitously.

I believe that most managers choose, and should choose among these three perspectives situatedly in making their decisions.

Best,

Chengwei from Cambridge

Hazel said...

Interesting. It reminds very much of my mother who was a home-based philosopher. One of her favourite sayings was about the bugger who digs a pit at your feet while you're concentrating on the hurdles ahead!

Wally Bock said...

True, we often define strategy as a grand plan. I like your analogies, but it seems to me like the most important strategic question is: "Where are we going?"

Wally Bock said...

After I posted my last comment, I remembered an excellent post by Erika Andersen on this topic. The post is titled "Growing Great Gardens." You'll find it at

http://thesimplestthing.typepad.com/erikas_blog/2008/09/growing-great-gardens.html

Gerald Nanninga said...

I just recently came across your blog. I love it! Of course that may be because it is so similar to my own blog. This entry reminded me of one I wrote awhile back on applying the rules of driving to strategy: http://planninga-from-nanninga.blogspot.com/2008/06/analogy-189-driving-for-success.html.

Freek said...

Thanks for all the kind words and - indeed - very appropriate analogies and stories. I might have to plagiarise some of them! :-)

Sildenafil Citrate said...

well I can see why you say that Don Sull is a master of the analogy, the two images are very similar and that is not easy to find and relate it to the other one, excellent post!