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Today's Insights: Empowering B2B Wholesalers and Importers: Mastering Strategic Decisions for Success
Table of Contents
- Introduction
- Strategic Sparring Session
- Data-Based Conversations
- Battle of Assumptions
- Making Differences Obvious
Introduction
Making decisions in a world of uncertainty is a fundamental challenge for leaders. Leaders struggling with this problem can try a strategic sparring session, an immersive, interactive discussion that can help teams see through the fog that accompanies today's expected unpredictability. Mastering just three principles can help your team agree on key assumptions, build conviction on the way forward, and inspire individual and collective change.
Senior leaders today face the unenviable task of making decisions on difficult strategic issues; issues that employees approach with preconceived notions and where data can be distorted to support pre-existing views. In helping senior leadership teams navigate disruptive change, we often encounter the question: Should they maintain their core business or create new growth businesses? Should they invest in hot new technologies or adopt a wait-and-see approach? These are complex questions that cannot be clearly answered, even in hindsight.
Strategic Sparring Session
Over the past 20 years, we have developed a tool to help leaders meet this challenge: the strategic sparring session. This is an immersive, interactive discussion designed to help teams see through the fog that comes with today's expected unpredictability. We call it a “drill meeting” because it’s a meeting designed to fully discuss ideas, challenge assumptions, and prepare for the future. These meetings help the team maintain alignment on key assumptions, build conviction on the path forward, and inspire individual and collective change.
For example, strategy meetings can be a very effective tool for discussions about “returning to the office” where anxiety is rising. As with other important strategic decisions, there is no one “right” answer in virtual, hybrid, and in-person debates. But applying three key principles can allow leadership teams to have productive discussions with key stakeholders and establish a return-to-office approach that fits the situation and needs. We used the return-to-office example as an example of how to conduct a strategy rehearsal session, but this technique can be applied to any uncertainty your company is facing or may face in the future. Here's how it works.
Data-Based Conversations
Amazon is a great example of an enterprise having data-based conversations. At Amazon, important meetings always begin with a strange sound: silence. People were busy reading a six-page memo describing the issue at hand. There are no PowerPoint slides. In fact, the author of the memo didn't want to show anything. Rather, their purpose is to facilitate a frank discussion of the issue. This white space is an important feature of strategy rehearsal sessions. It doesn't end with PowerPoint or other types of one-way messaging. It’s not even a debate of one side versus another.
Physicist David Bohm, in his book *On Dialogue*, points out that dialogue is not "a game of ping-pong, in which ideas are bounced back and forth in order to win or score points." Dialogue should be a "joint game in which people do not fight against each other, but cooperate with each other." Such dialogue brings people into the decision-making process. W. Chan Kim and Renée Mauborgne's research a generation ago pointed out that people strongly prefer "procedural" justice (fair process) rather than "distributive" justice (fair results). Inclusive dialogue keeps people engaged—even if individuals ultimately disagree with a particular outcome.
When it comes to returning to the office, research shows that 80% of employers believe their initial return-to-office policies were wrong, in part because only 7% used employee feedback to develop their strategy. Involving a wider group of people in the discussion creates much higher levels of support. We call these conversations “data-based conversations” to remind ourselves that when discussing the future, while the best available data should be presented, data is by definition incomplete.
Yes, cite the latest research on productivity, engagement, creativity, etc. in different settings, and you’re bound to see conflicting findings. Do distance policies promote or reduce participation? Just like Gina McGregor from Forbes noted in an extremely comprehensive review of research on working from home, “Studies can be cherry-picked to point to any one outcome.” But if you look closely, you may find some patterns. For example, it’s becoming increasingly clear that open offices don’t actually increase creativity. You may see ambiguity and opportunities for innovation.
As the head of HR at one of our clients said: “If you tell employees clearly which days they can work from home and which days they can’t, the emphasis is still on order and control. This is not a hybrid model. A hybrid work model should be optional." Another client has a department where every employee comes to the office for a full week every month and then has the flexibility to work the rest of the month. Client data shows that aligned expectations help with planning and create space for undistracted focus and self-directed time, resulting in increased productivity and engagement.
Battle of Assumptions
We call this a “strategy drill,” but what is the point of the confrontation? It's a "hypothesis". For example, Scott Anthony discussed with a team the strategy of opening a chain of cafes in Japan. Discussions among team members became increasingly heated. “I think we shouldn’t do it at all,” Rachel said. “We should close the store.” Another team member, Arthur, immediately objected: “I think we absolutely should keep doing it. The problem is that our goals weren’t bold enough. Radical."
"Scott, what do you think?" they all asked. Everyone looked at Scott. Rachel and Arthur were locked in a battle of beliefs. While there may be individual winners in these battles, the institution as a whole always loses. Why? Because each person develops a personal connection to their request, this means that when the winner is chosen at the end of the discussion, the loser ends up feeling unheard, discouraged, or marginalized. Harvard Business School professor and leadership expert Linda Hill said, "Without diversity and conflict, there would be no innovation." But too much personal confrontation can inhibit what Hill calls "creative abrasion," the tension between ideas. Friction inspires creativity.
When people take confrontation too personally, the sparks generated by friction will glow white hot but will not change opinions. Lowering the temperature allows creative friction to work its magic. To do this, turn your beliefs into assumptions. In this particular case, Scott stopped the discussion and reframed the discussion. He said that Rachel and Arthur should start their arguments with "The key assumption is..." rather than "I believe" or "I think."
Rachel said the key assumption behind her argument is that the average Japanese customer spends less than 1,000 yen (about $9) per order. Arthur said he actually agreed with Rachel's hypothesis. It turned out that his key hypothesis was the extent to which customers became loyal and the café became a regular place to visit. Rachel asked about comparative data from other cafes. Arthur said it was a good question and agreed to dig deeper. Everyone agreed that a more in-depth analysis of the performance of the prototype café the company had opened was necessary. We brainstormed additional experiments to increase our confidence in this key hypothesis.
In any strategy exercise session on a future of work topic, it is important to identify the key assumptions behind different approaches. Present that hypothesis specifically for you to test. Don’t accept claims like “working from home is better.” Instead, ask for information like: “Working remotely two days a week increases employee engagement scores by 10%,” or “Asking to be in the office one day a week increases feedback to engineers by 20%.” The more specific a hypothesis is, the better you can study it—and test it. Focusing on hypotheses rather than answers has two benefits. First, it keeps the discussion impersonal. In psychological terms, when you separate the person from the idea, you create creative friction. Second, it focuses on areas where you need to learn more through research or focused experiments.
Making Differences Obvious
Groups often leave meetings thinking they have more consensus than they actually do. That’s why they need to combat groupthink (in which individuals prematurely submit to emerging group opinions), class effects (individuals’ reluctance to question the opinions of higher-ups), and social loafing (also known as “bystanders”). The goal of a strategy exercise meeting is not to achieve blind consensus. Rather, it is about identifying where the greatest differences exist.
One technique we use to highlight differences is called “taking sides.” We ask a key strategic question, such as the revenue target for a new initiative, and put a piece of tape on the floor. We put up signs to represent different positions and ask employees to stand in a place that represents their views on the issue. Sometimes this is done in the moment, and sometimes we do pre-surveys to get people to take a position before they even enter the room. This event can also be conducted entirely digitally. We often let the most senior leader choose the position last (and sometimes not at all) because in many cultures team members are quick to imitate the senior leader’s actions. We then asked members to explain why they chose where they stood.
When we worked with Swisscom, the Swiss mobile phone leader, company leaders were surprised to find that they had very different visions for the company's growth trajectory over the next seven years. It is very important that everyone sees where everyone else stands, which enables a lively discussion about key assumptions and what data changes perspectives. After several rounds of discussions, the team reached a growth goal that was significantly higher than the team's initial position. One leader described the result as "a moment of joy and relaxation."
A range of back-to-office themes can benefit from a “pick a side” approach. Place a piece of tape on the floor marked from strongly disagree to strongly agree. Then have people stand in a position that represents their perspective and face prompts such as: Employee productivity (versus employee engagement) is the variable we should optimize for. Physical proximity enhances creativity. Teams that spend more time together are more productive. Mastery in sales can only be achieved through a face-to-face apprenticeship. Time to enter the office should be coordinated and enforced, rather than left to the discretion of employees. Mandatory office attendance can cause good employees to leave. Employees who do not comply with return-to-office policies should face negative consequences. Entering the office can create more learning opportunities through coaching, apprenticeships and mentorship.
Another way to let differences surface is to develop meeting rituals. For example, Scott and Natalie once provided consulting services to DBS Bank, a leading bank in Singapore. During the presentation of the bank's decision-making meeting, a slide would randomly appear with a message on it. A character named "Wreckoon" asks questions like: "What have we forgotten?" "What is the most dangerous assumption?" "What is the counter-argument?" and "What could go wrong?"
Making decisions under uncertainty is a fundamental challenge. It also creates opportunities for organizations that can think forward to outperform their competitors and stay ahead of market changes. Strategy rehearsal sessions can help organizations develop their own unique vision of the future of work—and turn tight conversations into confidently conducted experiments with clear goals.
